UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                 FORM 10-K/A
                               AMENDMENT NO. 3

    (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, 2002

                                     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

                            CARNIVAL CORPORATION
           (Exact name of registrant as specified in its charter)

         Republic of Panama                            59-1562976
        (State or other jurisdiction of             (I.R.S. Employer
         incorporation or organization)              Identification No.)

      3655 N.W. 87th Avenue, Miami, Florida             33178-2428
     (Address of principal executive offices)           (Zip Code)

     Registrant's telephone number, including area code (305) 599-2600

    Securities registered pursuant to Section 12(b) of the Act:
                                                      Name of exchange on
           Title of each class                        which registered
           Common Stock                               New York Stock
         ($.01 par value)                             Exchange, Inc.

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

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has 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 registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ ]

     Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act).  Yes  X  No___

     The aggregate market value of the voting stock held by non-affiliates
of the Registrant is approximately $7.1 billion based upon the closing
market price on February 10, 2003 of a share of common stock on the New York
Stock Exchange as reported by the Wall Street Journal.

     At February 10, 2003 the Registrant had outstanding 586,969,154 shares
of its common stock, $.01 par value.



                                    PART IV

Item 15.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

     (a) (1)(2) Financial Statements and Schedules

     The financial statements shown in Exhibit 13 are amended in their
entirety to comply with Securities and Exchange Commission Regulation G and
to reclassify our segment information in Note 12 to the financial statements
to conform to our fiscal 2003 presentation, and are incorporated herein by
reference.



                                 SIGNATURES

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


CARNIVAL CORPORATION


/s/ Micky Arison          Chairman of the Board of         May 5, 2003
Micky Arison              Directors and Chief Executive
                          Officer



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



/s/ Micky Arison          Chairman of the Board of         May 5, 2003
Micky Arison              Directors and Chief Executive
                          Officer

/s/ Howard S. Frank       Vice Chairman of the Board of    May 5, 2003
Howard S. Frank           Directors and Chief Operating
                          Officer

/s/ Gerald R. Cahill      Senior Vice President-Finance    May 5, 2003
Gerald R. Cahill          and Chief Financial and
                          Accounting Officer

/s/ Richard G. Capen, Jr. Director                         May 5, 2003
Richard G. Capen, Jr.

/s/ Robert H. Dickinson   Director                         May 5, 2003
Robert H. Dickinson

/s/ Arnold W. Donald      Director                         May 5, 2003
Arnold W. Donald

- ---------------------     Director                         May 5, 2003
Pier Luigi Foschi

- ---------------------     Director                         May 5, 2003
Baroness Hogg

/s/ A. Kirk Lanterman     Director                         May 5, 2003
A. Kirk Lanterman

/s/ Modesto A. Maidique   Director                         May 5, 2003
Modesto A. Maidique

- ---------------------     Director                         May 5, 2003
Sir John Parker

- ---------------------     Director                         May 5, 2003
Peter Ratcliffe

/s/ Stuart Subotnick      Director                         May 5, 2003
Stuart Subotnick

/s/ Uzi Zucker            Director                         May 5, 2003
Uzi Zucker



                                CERTIFICATIONS

I, Micky Arison, certify that:

1. I have reviewed this annual report on Form 10-K/A of Carnival
Corporation;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

(a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and

(c) Presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors:

(a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.


Date: May 5, 2003

                                        /s/ Micky Arison
                                        Micky Arison
                                        Chairman of the Board of Directors
                                        and Chief Executive Officer




I, Howard S. Frank, certify that:

1. I have reviewed this annual report on Form 10-K/A of Carnival
Corporation;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

(a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and

(c) Presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors:

(a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.


Date: May 5, 2003

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




I, Gerald R. Cahill, certify that:

1. I have reviewed this annual report on Form 10-K/A of Carnival
Corporation;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

(a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and

(c) Presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors:

(a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.


Date: May 5, 2003

                                        /s/ Gerald R. Cahill
                                        Gerald R. Cahill
                                        Senior Vice President-Finance
                                        and Chief Financial and
                                        Accounting Officer







                                                           EXHIBIT 13


                           CARNIVAL CORPORATION
                 CONSOLIDATED STATEMENTS OF OPERATIONS
                (in thousands, except earnings per share)




                                                Years Ended November 30,
                                             2002        2001        2000


Revenues                                  $4,368,269  $4,535,751 $3,778,542

Costs and Expenses
  Operating                                2,311,919  2,468,730   2,058,342
  Selling and administrative                 611,948    618,664     487,403
  Depreciation and amortization              382,343    372,224     287,667
  Impairment charge                           20,000    140,378
  Loss (income) from affiliated
    operations, net                                      44,024     (37,828)
                                           3,326,210  3,644,020   2,795,584

Operating Income                           1,042,059    891,731     982,958

Nonoperating (Expense) Income
  Interest income                             32,140     34,255      16,506
  Interest expense, net of
    capitalized interest                    (110,740)  (120,692)    (41,372)
  Other (expense) income, net                 (4,080)   108,649       8,460
                                             (82,680)    22,212     (16,406)

Income Before Income Taxes                   959,379    913,943     966,552

Income Tax Benefit (Expense), Net             56,562     12,257      (1,094)

Net Income                                $1,015,941  $ 926,200  $  965,458

Earnings Per Share
  Basic                                        $1.73      $1.58       $1.61
  Diluted                                      $1.73      $1.58       $1.60


The accompanying notes are an integral part of these consolidated financial
statements.



                              CARNIVAL CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except par value)


                                                          November 30,
ASSETS                                                 2002         2001

Current Assets
  Cash and cash equivalents                      $   666,700    $ 1,421,300
  Short-term investments                              39,005         36,784
  Accounts receivable, net                           108,327         90,763
  Inventories                                         91,310         91,996
  Prepaid expenses and other                         148,420        113,798
  Fair value of hedged firm commitments               78,390        204,347
    Total current assets                           1,132,152      1,958,988

Property and Equipment, Net                       10,115,404      8,390,230

Goodwill                                             681,056        651,814

Other Assets                                         297,175        188,915

Fair Value of Hedged Firm Commitments                109,061        373,605
                                                 $12,334,848    $11,563,552

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
  Current portion of long-term debt              $   148,642    $    21,764
  Accounts payable                                   268,687        269,467
  Accrued liabilities                                290,391        298,032
  Customer deposits                                  770,637        627,698
  Dividends payable                                   61,612         61,548
  Fair value of derivative contracts                  79,837        201,731
    Total current liabilities                      1,619,806      1,480,240

Long-Term Debt                                     3,011,969      2,954,854

Deferred Income and Other Long-Term Liabilities      170,814        157,998

Fair Value of Derivative Contracts                   114,356        379,683

Commitments and Contingencies (Notes 7 and 8)

Shareholders' Equity
  Common stock; $.01 par value; 960,000 shares
    authorized; 586,788 shares issued and
    outstanding at 2002 (620,019 shares issued
    at 2001)                                           5,868          6,200
  Additional paid-in capital                       1,089,125      1,805,248
  Retained earnings                                6,325,850      5,556,296
  Unearned stock compensation                        (11,181)       (12,398)
  Accumulated other comprehensive income (loss)        8,241        (36,932)
  Treasury stock; 33,848 shares at cost                            (727,637)
    Total shareholders' equity                     7,417,903      6,590,777
                                                 $12,334,848    $11,563,552

The accompanying notes are an integral part of these consolidated financial
statements


                                        CARNIVAL CORPORATION
                               CONSOLIDATED STATEMENTS OF CASH FLOWS
                                            (in thousands)


                                                             Years Ended November 30,
                                                        2002            2001           2000
                                                                                
OPERATING ACTIVITIES
Net income                                          $ 1,015,941    $  926,200      $  965,458
Adjustments to reconcile net income to
  net cash provided by operating activities
    Depreciation and amortization                       382,343       372,224         287,667
    Impairment charge                                    20,000       140,378
    Gain on sale of investments in affiliates, net                   (116,698)
    Loss (income) from affiliated operations
      and dividends received                                           56,910         (21,362)
    Accretion of original issue discount                 19,294         2,174             199
    Other                                                14,664        19,025         (14,888)
Changes in operating assets and liabilities,
  excluding businesses acquired and consolidated
    (Increase) decrease in
      Receivables                                        (5,452)       (7,134)        (15,132)
      Inventories                                         1,667         8,455          (8,205)
      Prepaid expenses and other                        (80,593)       43,691         (21,972)
    (Decrease) increase in
      Accounts payable                                  (12,011)      (63,227)         58,133
      Accrued and other liabilities                     (28,380)         (335)         (5,977)
      Customer deposits                                 141,559      (142,727)         55,614
        Net cash provided by operating activities     1,469,032     1,238,936       1,279,535

INVESTING ACTIVITIES
Additions to property and equipment, net             (1,986,482)     (826,568)     (1,003,348)
Proceeds from sale of investments
  in affiliates                                                       531,225
Proceeds from sale of property and equipment              4,071        15,000          51,350
Acquisition of consolidated subsidiary, net                                          (383,640)
Sale (purchase) of
  short-term investments, net                             2,213       (33,395)         22,170
Other, net                                              (39,855)      (28,178)         21,441
        Net cash used in investing activities        (2,020,053)     (341,916)     (1,292,027)

FINANCING ACTIVITIES
Proceeds from issuance of long-term debt                231,940     2,574,281       1,020,091
Purchase of treasury stock                                                           (705,137)
Principal repayments of long-term debt                 (189,678)   (1,971,026)       (388,429)
Dividends paid                                         (246,323)     (245,844)       (254,333)
Proceeds from issuance of common stock, net               7,240         5,274           7,811
Other, principally debt issuance costs                   (1,544)      (25,531)
        Net cash (used in) provided by
          financing activities                         (198,365)      337,154        (319,997)
Effect of exchange rate changes on cash and
  cash equivalents                                       (5,214)       (2,156)
        Net (decrease) increase in cash and
          cash equivalents                             (754,600)    1,232,018        (332,489)
Cash and cash equivalents at beginning
  of year                                             1,421,300       189,282         521,771
Cash and cash equivalents at end of year             $  666,700    $1,421,300      $  189,282

The accompanying notes are an integral part of these consolidated financial statements.





                                          CARNIVAL CORPORATION
                             CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                             (in thousands)



                                                           Unearned  Accumulated             Total
                          Compre-       Additional          stock      other                 share-
                          hensive Common paid-in  Retained  compen-  comprehensive Treasury  holders'
                          income  stock  capital  earnings  sation   income (loss)  stock    equity
                                                     C>                   

Balances at
  November 30, 1999            $6,170 $1,757,408    $4,176,498  $(9,945) $  1,116        $5,931,247
  Comprehensive income:
    Net income         $  965,458                      965,458                              965,458
    Foreign currency
      translation
      adjustment          (73,943)                                        (73,943)          (73,943)
    Unrealized losses on
      marketable
      securities, net      (2,232)                                         (2,232)           (2,232)
      Total comprehensive
      income           $  889,283
  Cash dividends                                      (250,923)                            (250,923)
  Issuance of stock under
    stock plans                     6     15,489                 (5,977)                      9,518
  Amortization of unearned stock
    compensation                                                  3,639                       3,639
  Effect of conforming Costa's
    reporting period                                    (7,010)                              (7,010)
  Purchase of treasury stock                                                     (705,137) (705,137)
Balances at
  November 30, 2000             6,176  1,772,897     4,884,023  (12,283) (75,059)(705,137)5,870,617
  Comprehensive income:
    Net income         $  926,200                      926,200                              926,200
    Foreign currency
      translation
      adjustment, net      45,781                                          45,781            45,781
    Unrealized gains on
      marketable
      securities, net       6,411                                           6,411             6,411
    Minimum pension
      liability adjustment (5,521)                                         (5,521)           (5,521)
    Changes related to cash
      flow derivative
      hedges, net          (4,330)                                         (4,330)           (4,330)
    Transition adjustment
      for cash flow
      derivative hedges    (4,214)                                         (4,214)           (4,214)
      Total comprehensive
      income           $  964,327
  Cash dividends                                    (246,021)                              (246,021)
  Issuance of stock under
    stock plans                    24     32,351                (4,601)           (22,500)    5,274
  Amortization of unearned stock
    compensation                                                 4,486                        4,486
  Effect of conforming Airtours'
    reporting period                                  (7,906)                                (7,906)
Balances at
   November 30, 2001            6,200  1,805,248   5,556,296   (12,398) (36,932) (727,637)6,590,777
  Comprehensive income:
    Net income         $1,015,941                  1,015,941                              1,015,941
    Foreign currency
      translation
      adjustment           51,294                                        51,294              51,294
    Minimum pension liability
      adjustment           (9,166)                                       (9,166)             (9,166)
    Unrealized gains on
      marketable
      securities, net       2,579                                         2,579               2,579
    Changes related to
    cash flow derivative
    hedges, net               466                                           466                 466
      Total
      comprehensive
      income           $1,061,114
  Cash dividends                                   (246,387)                               (246,387)
  Issuance of stock under
    stock plans                    6      11,176                (3,942)                       7,240
  Retirement of
    treasury stock              (338)   (727,299)                                727,637
  Amortization of unearned stock
    compensation                                                 5,159                        5,159
Balances at November
   30, 2002                   $5,868  $1,089,125  $6,325,850  $(11,181) $  8,241 $       $7,417,903


The accompanying notes are an integral part of these consolidated financial statements.





                             CARNIVAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - General

     Description of Business

     Carnival Corporation is a Panamanian corporation and, together with its
consolidated subsidiaries, is referred to collectively in these consolidated
financial statements and elsewhere in this 2002 Annual Report as "our," "us"
and "we."  We are a global cruise vacation and leisure travel provider that
operates six cruise lines under the brand names Carnival Cruise Lines
("CCL"), Costa Cruises ("Costa"), Cunard Line ("Cunard"), Holland America
Line ("Holland America"), Seabourn Cruise Line ("Seabourn") and Windstar
Cruises ("Windstar") and a tour business, Holland America Tours ("Tours").
CCL operates eighteen cruise ships with destinations primarily to the
Caribbean, the Bahamas and the Mexican Riviera. Holland America operates
eleven cruise ships with destinations primarily to Alaska, the Caribbean and
Europe.  Costa operates eight cruise ships with destinations primarily to
Europe, the Caribbean and South America.  Cunard operates two premium/luxury
cruise ships and Seabourn and Windstar each operate three luxury cruise
ships with destinations to the Caribbean, Europe, Central America, Tahiti
and other worldwide destinations.  Our current fleet of 45 ships has a
passenger capacity of 67,282 lower berths.  Tours is a leading cruise/tour
operator in Alaska and the Canadian Yukon.  Tours also markets sightseeing
packages, both separately and as a part of our cruise/tour packages.

     Preparation of Financial Statements

     The preparation of our consolidated financial statements in accordance
with accounting principles generally accepted in the United States of
America requires us to make estimates and assumptions that affect the
amounts reported and disclosed in our financial statements. Actual results
could differ from these estimates.  All material intercompany accounts,
transactions and unrealized profits and losses on transactions within our
consolidated group and with affiliates are eliminated in consolidation.


NOTE 2 - Summary Of Significant Accounting Policies

     Basis of Presentation

     We consolidate subsidiaries over which we have control, as typically
evidenced by a direct ownership interest of greater than 50%.  For
affiliates where significant influence over financial and operating policies
exists, as typically evidenced by a direct ownership interest from 20% to
50%, the investment is accounted for using the equity method.  See Note 5.

     Prior to our acquisition of Costa in late fiscal 2000, we accounted for
our 50% interest in Costa using the equity method and recorded our portion
of Costa's operating results as earnings from affiliated operations on a
two-month lag basis. As of November 30, 2000, we changed how we report
Costa's operating results from a two-month lag basis to reporting on Costa's
current month's results. Accordingly, our November 30, 2000 consolidated
balance sheet included Costa's November 30, 2000 balance sheet.  The impact
of conforming Costa's reporting period on our fiscal 2000 revenues,
operating income and net income was not material.  Commencing in fiscal
2001, Costa's results of operations were also consolidated on a current
month basis in the same manner as our other wholly-owned subsidiaries.  See
Note 17.

     Cash and Cash Equivalents and Short-Term Investments

     Cash and cash equivalents include investments with original maturities
of three months or less are stated at cost. At November 30, 2002 and 2001,
cash and cash equivalents included $616 million and $1.38 billion of
investments, respectively, primarily comprised of strong investment grade
asset-backed debt obligations and money market funds.

     Short-term investments are comprised of marketable debt and equity
securities which are categorized as available for sale and, accordingly, are
stated at their fair values.  Unrealized gains and losses are included as a
component of accumulated other comprehensive income (loss) ("AOCI") within
shareholders' equity until realized.  The specific identification method is
used to determine realized gains or losses.

     Inventories

     Inventories consist primarily of provisions, spare parts, supplies and
fuel carried at the lower of cost or market.  Cost is determined using the
weighted average or first-in, first-out method.

     Property and Equipment

     Property and equipment are stated at cost.  Depreciation and
amortization was computed using the straight-line method over our estimates
of average useful lives and residual values, as a percentage of original
cost, as follows:



                                            Residual
                                             Values        Years

      Ships                                      15%         30
      Buildings and improvements               0-10%        5-40
      Transportation equipment and other       0-25%        2-20
      Leasehold improvements,
        including port facilities                    Shorter of lease term
                                                     or related asset life


     We review our long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of these assets
may not be fully recoverable.  The assessment of possible impairment is
based on our ability to recover the carrying value of our asset based on our
estimate of its undiscounted future cash flows.  If these estimated
undiscounted future cash flows are less than the carrying value of the
asset, an impairment charge is recognized for the excess, if any, of the
assets carrying value over its estimated fair value (see Notes 4 and 16).

     Dry-dock costs are included in prepaid expenses and are amortized to
operating expenses using the straight-line method generally over one year.

     Ship improvement costs that we believe add value to our ships are
capitalized to the ships, and depreciated over the improvements' estimated
useful lives, while costs of repairs and maintenance are charged to expense
as incurred.  We capitalize interest on ships and other capital projects
during their construction period.  Upon the replacement or refurbishment of
previously capitalized ship components, these assets' estimated cost and
accumulated depreciation are written-off and any resulting gain or loss is
recognized in our results of operations. No such material gains or losses
were recognized in fiscal 2002, 2001 or 2000.  See Note 3.

     Gains or losses on the sale of property and equipment are classified as
nonoperating other income or expense.  In fiscal 2002, we realized an $8
million loss on the sale of the former Nieuw Amsterdam.

     Goodwill

     Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill
and Other Intangible Assets" requires companies to stop amortizing goodwill
and requires an annual, or when events or circumstances dictate a more
frequent, impairment review of goodwill. Accordingly, upon adoption of SFAS
No. 142 on December 1, 2001, we ceased amortizing our goodwill, all of which
has been allocated to our Costa, Cunard and Holland America reportable
units, which are all part of  our reportable cruise segment.  We completed
the transitional and annual impairment tests of these reporting units'
existing goodwill as of December 1, 2001 and July 31, 2002, respectively,
and determined that their goodwill was not impaired.  There has been no
change to our goodwill carrying amount since November 30, 2001, other than
the change resulting from using a different foreign currency translation
rate at November 30, 2002 compared to November 30, 2001.  If goodwill
amortization, including goodwill expensed as part of our loss or income from
affiliated operations, had not been recorded for fiscal 2001 and 2000 our
adjusted net income and adjusted basic and diluted earnings per share would
have been as follows (in thousands, except per share amounts):

                                                2001           2000

                  Net income                  $926,200       $965,458
                  Goodwill amortization         25,480         23,046
                  Adjusted net income         $951,680       $988,504

                  Adjusted earnings per share
                    Basic                        $1.63          $1.65
                    Diluted                      $1.62          $1.64

     The SFAS No. 142 goodwill impairment review consists of a two-step
process of first determining the fair value of the reporting unit and
comparing it to the carrying value of the net assets allocated to the
reporting unit.  Fair values of our reporting units were determined based on
our estimates of comparable market price or discounted future cash flows.
If this fair value exceeds the carrying value, which was the case for our
reporting units, no further analysis or goodwill write-down is required.  If
the fair value of the reporting unit is less than the carrying value of the
net assets, the implied fair value of the reporting unit is allocated to all
the underlying assets and liabilities, including both recognized and
unrecognized tangible and intangible assets, based on their fair value. If
necessary, goodwill is then written-down to its implied fair value.

     Prior to fiscal 2002, our goodwill was reviewed for impairment pursuant
to the same policy as our other long-lived assets as discussed above (see
Note 4) and our goodwill was amortized over 40 years using the straight-line
method. In addition, accumulated goodwill amortization at November 30, 2001
was $118 million.

     Derivative Instruments and Hedging Activities

     We utilize derivative instruments, such as forward foreign currency
contracts to limit our exposure to fluctuations in foreign currency exchange
rates and interest rate swaps to manage our interest rate exposure and to
achieve a desired proportion of variable and fixed rate debt (see Note 11).

     Our most significant contracts to buy foreign currency are forward
contracts entered into to fix the cost in United States ("U.S.") dollars of
seven of our foreign currency denominated shipbuilding commitments (see Note
7).  If our shipbuilding contract is denominated in the functional currency
of the cruise line that is expected to be operating the ship, we have not
entered into a forward foreign currency contract to hedge that commitment.

     Effective December 1, 2000, we adopted SFAS No. 133, as amended,
"Accounting for Derivative Instruments and Hedging Activities," which
requires that all derivative instruments be recorded on our balance sheet at
their fair values.  Derivatives that are not hedges must be recorded at fair
value and the changes in fair value must be immediately included in
earnings.  If a derivative is a fair value hedge, then changes in the fair
value of the derivative are offset against the changes in the fair value of
the underlying hedged firm commitment.  If a derivative is a cash flow
hedge, then changes in the fair value of the derivative are recognized as a
component of AOCI until the underlying hedged item is recognized in
earnings.  The ineffective portion of a hedge derivative's change in fair
value is immediately recognized in earnings. We formally document all
relationships between hedging instruments and hedged items, as well as our
risk management objectives and strategies for undertaking our hedge
transactions. Upon adoption, we recorded an adjustment of $4.2 million in
AOCI to record the unrealized net losses from our cash flow hedges that
existed on December 1, 2000.

     The total $187 million and $578 million of current and long-term fair
value of hedged firm commitment assets on our November 30, 2002 and 2001
balance sheets, respectively, includes $178 million and $567 million,
respectively, of unrealized gains on our shipbuilding commitments
denominated in foreign currencies because of the strengthening of the dollar
compared to the euro.  In addition, the total $194 million and $581 million
of fair value of derivative contract liabilities on our November 30, 2002
and 2001 balance sheets, respectively, includes $178 million and $567
million of unrealized losses on our forward foreign currency contracts
relating to those same shipbuilding commitments, which are used to fix the
cost of our shipbuilding commitments in U.S. dollars, and effectively
offsets the related hedged firm commitment assets.

     We classify the fair value of our derivative contracts and the fair
value of our offsetting hedged firm commitments as either current or long-
term liabilities and assets depending on whether the maturity date of the
derivative contract is within or beyond one year from our balance sheet
dates, respectively.  The cash flows from derivatives treated as hedges are
classified in our statements of cash flows in the same category as the item
being hedged.

     Derivative gains and losses included in AOCI are reclassified into
earnings at the same time the underlying hedged transaction is recorded in
earnings.  During fiscal 2002 and 2001, all net changes in the fair value of
both our fair value hedges and the offsetting hedged firm commitments and
our cash flow hedges were immaterial, as were any ineffective portions of
these hedges.  No fair value hedges or cash flow hedges were derecognized or
discontinued in fiscal 2002 and 2001, and the amount of estimated unrealized
net losses which are expected to be reclassified to earnings in the next
twelve months is not material.  At November 30, 2002 and 2001, AOCI included
$8 million and $8.5 million of unrealized net losses, respectively, from
cash flow hedge derivatives, which were substantially all variable to fixed
interest rate swap agreements.

     Finally, if any of the three shipyards with which we have contracted to
build our ships is unable to perform, we would still be required to perform
under our foreign currency forward contracts related to that shipyard's
shipbuilding contracts.  Accordingly, based upon the circumstances, we may
have to discontinue the accounting for those forward contracts as hedges, if
the shipyard cannot perform.

     Prior to fiscal 2001, changes in the fair values of and any discounts
or premiums on, our shipbuilding forward foreign currency contract hedges
were recorded at maturity, which coincided with the dates when the related
foreign currency payments were to be made, with any resulting gains or
losses recorded as a decrease or increase, respectively, to the cost paid
for our ships.

     Revenue and Expense Recognition

     Guest cruise deposits represent unearned revenues and are initially
recorded as customer deposit liabilities on our balance sheet when received.
Customer deposits are subsequently recognized as cruise revenues, together
with revenues from onboard activities and all associated direct costs of a
voyage, generally upon completion of voyages with durations of ten days or
less and on a pro rata basis for voyages in excess of ten days.  Future
travel discount vouchers issued to guests are recorded as a reduction of
revenues when such vouchers are utilized. Revenues and expenses from our
tour and related services are recognized at the time the services are
performed or expenses are incurred.

      Advertising Costs

     Substantially all of our advertising costs are charged to expense as
incurred, except costs which result in tangible assets, such as brochures,
which are recorded as prepaid expenses and charged to expense as consumed.
Media production costs are also recorded as prepaid expenses and charged to
expense upon the first airing of the advertisement.  Advertising expenses
totaled $208 million, $214 million and $181 million in fiscal 2002, 2001 and
2000, respectively.  At November 30, 2002 and 2001, the amount of
advertising costs included in prepaid expenses was not material.

     Foreign Currency Translations and Transactions

     For our foreign subsidiaries and affiliates using the local currency as
their functional currency, assets and liabilities are translated at exchange
rates in effect at the balance sheet dates.  Translation adjustments
resulting from this process are reported in AOCI.  Revenues and expenses of
these foreign subsidiaries and affiliates are translated at weighted-average
exchange rates for the period.  Exchange gains and losses arising from
transactions denominated in a currency other than the functional currency of
the entity involved are immediately included in our earnings.

     Earnings Per Share

     Basic earnings per share is computed by dividing net income by the
weighted average number of shares of common stock outstanding during each
period. Diluted earnings per share is computed by dividing net income by the
weighted-average number of shares of common stock, common stock equivalents
and other potentially dilutive securities outstanding during each period.
See Note 14.

     Stock-Based Compensation

     Pursuant to SFAS No. 123, "Accounting for Stock-Based Compensation," we
elected to use the intrinsic value method of accounting for our employee and
director stock-based compensation awards.  Accordingly, we have not
recognized compensation expense for our noncompensatory employee and
director stock option awards.  Our pro forma net income and earnings per
share for fiscal 2002 and 2001, had we elected to adopt the fair value
approach of SFAS No. 123, which charges earnings for the estimated fair
value of stock options, would have been $991 million and $904 million and
$1.69 and $1.54, respectively, and would not have been materially different
from reported net income and earnings per share for fiscal 2000.

     As determined below, the weighted-average fair values of options we
granted during fiscal 2002, 2001 and 2000 were $12.16, $12.67 and $13.31 per
share, respectively, at the dates of grant. As recommended by SFAS No. 123,
the fair values of options were estimated using the Black-Scholes option
pricing model with the following weighted-average assumptions for fiscal
2002, 2001 and 2000, respectively; expected dividend yields of 1.23%, 1.16%
and 1.17%; expected volatility of 48.0%, 50.0% and 28.9%; risk free interest
rates of 4.3%, 4.5% and 6.4%; and expected option life of six years for all
periods.

    The Black-Scholes option-pricing model was developed for use in
estimating the fair value of traded options that have no vesting or trading
restrictions and are fully transferable. In addition, option-pricing models
require the input of subjective assumptions, including expected stock price
volatility. Because our options have characteristics different from those of
traded options, the existing models do not necessarily provide a reliable
single measure of the fair value of our options.

     Concentrations of Credit Risk

     As part of our ongoing control procedures, we monitor concentrations of
credit risk associated with financial and other institutions with which we
conduct significant business.  Credit risk, including counterparty
nonperformance under derivative instruments, contingent obligations and new
ship progress payment guarantees, is considered minimal, as we primarily
conduct business with large, well-established financial institutions who
have long-term credit ratings of A or above and we seek to diversify our
counterparties.  In addition, we have established guidelines regarding
credit ratings and investment maturities that we follow to maintain safety
and liquidity.  We do not anticipate nonperformance by any of our
significant counterparties.

     We also monitor the creditworthiness of our customers to which we grant
credit terms in the normal course of our business.  Concentrations of credit
risk associated with these receivables are considered minimal primarily due
to their short maturities.  We have experienced only minimal credit losses
on our trade receivables.  We do not normally require collateral or other
security to support normal credit sales.  However, we do normally require
collateral and/or guarantees to support notes receivable on significant
asset sales and new ship progress payments to shipyards.

     Reclassifications

     Reclassifications have been made to prior year amounts to conform to
the current year presentation.


NOTE 3 - Property and Equipment

     Property and equipment consisted of the following (in thousands):


                                                        November 30,
                                                    2002            2001


Ships                                           $10,665,958     $ 8,892,412
Ships under construction                            712,447         592,781
                                                 11,378,405       9,485,193
Land, buildings and improvements,
  and port facilities                               314,448         264,294
Transportation equipment and other                  409,310         349,188
Total property and equipment                     12,102,163      10,098,675
Less accumulated depreciation and amortization   (1,986,759)     (1,708,445)
                                                $10,115,404     $ 8,390,230

     Capitalized interest, primarily on our ships under construction,
amounted to $39 million, $29 million and $41 million in fiscal 2002, 2001
and 2000, respectively.  Ships under construction include progress payments
for the construction of the ship, as well as design and engineering fees,
capitalized interest, construction oversight costs and various owner
supplied items.  At November 30, 2002, two ships with an aggregate net book
value of $623 million were pledged as collateral pursuant to a $119 million
note and a $463 million contingent obligation (see Notes 6 and 8).

     Maintenance and repair expenses and dry-dock amortization were $175
million, $160 million and $132 million in fiscal 2002, 2001 and 2000,
respectively.

NOTE 4 - Impairment Charge

     During fiscal 2002 and 2001 we reviewed our long-lived assets and
goodwill for which there were indications of possible impairment or as
required annually pursuant to SFAS No. 142.  As a result of these reviews,
in fiscal 2002 we reduced the carrying value of one of our ships by
recording an impairment charge of $20 million.  In fiscal 2001, we recorded
an impairment charge of $140 million, which consisted principally of a $71
million reduction in the carrying value of ships, a $36 million write-off of
Seabourn goodwill, a $15 million write-down of a Holland America note
receivable and a $11 million loss on the sale of the Seabourn Goddess I and
II.  The impaired ships' and note receivable fair values were based on third
party appraisals, negotiations with unrelated third parties or other
available evidence, and the fair value of the impaired goodwill was based on
our estimates of discounted future cash flows.

NOTE 5 - Investments In and Advances To Affiliates

     On June 1, 2001, we sold our investment in Airtours plc, which resulted
in a nonoperating net gain of $101 million and net cash proceeds of $492
million.  Cumulative foreign currency translation losses of $59 million were
reclassified from AOCI and included in determining this 2001 net gain.  We
also recorded a direct charge of $8 million to our retained earnings in
fiscal 2001, which represented our share of Airtours' losses for April and
May 2001, since Airtours results were reported on a two-month lag.

     In fiscal 2001, we sold our interest in CRC Holdings, Inc. ("CRC") to
an unrelated third party, which resulted in a nonoperating net gain of $16
million and net cash proceeds of $39 million.  One of the members of our
Board of Directors was a principal shareholder in CRC.

     Dividends received from affiliates were $13 million and $16 million in
fiscal 2001 and 2000, respectively, which reduced the carrying value of our
investments in affiliates in accordance with the equity method of
accounting.

     Income statement and segment information for fiscal 2000 for our
affiliated companies accounted for using the equity method, including
Airtours and Costa, was as follows:  revenues - $6.7 billion, gross margin -
$1.3 billion, operating income - $5 million, depreciation and amortization -
$152 million, net income - $20 million and capital expenditures - $650
million. Since we sold our interest in Airtours and CRC during fiscal 2001,
no data has been presented for fiscal 2002 and 2001.


NOTE 6 - Long-Term Debt

     Long-term debt consisted of the following (in thousands):


                                                           November 30,
                                                      2002 (a)     2001 (a)

Euro floating rate note, collateralized by
  one Costa ship, bearing interest
  at euribor plus 0.5% (4.0% and 4.8%
  at November 30, 2002 and 2001,
  respectively), due through 2008                  $  118,727   $  125,770
Unsecured fixed rate notes, bearing interest
  at rates ranging from 6.15% to 7.7%, due
  through 2028(b)                                     848,900      848,779
Unsecured floating rate euro notes, bearing interest
  at rates ranging from euribor plus 0.35% to
  euribor plus 0.53% (3.6% to 4.0% and 3.9% to 4.9%
  at November 30, 2002 and 2001, respectively),
  due 2005 and 2006                                   680,377      604,068
Unsecured fixed rate euro notes, bearing interest
  at 5.57%, due in 2006                               297,195      266,223
Unsecured $1.4 billion revolving credit facility,
  bearing interest at libor plus 0.17% (1.6% at
  November 30, 2002), due in 2006                      50,000
Other                                                  44,468       29,833
Unsecured 2% convertible notes, due in 2021           600,000      600,000
Unsecured zero-coupon convertible notes, net of
  discount, with a face value of $1.05 billion,
  due in 2021                                         520,944      501,945
                                                    3,160,611    2,976,618
Less portion due within one year                     (148,642)     (21,764)
                                                   $3,011,969   $2,954,854

(a) All borrowings are in U.S. dollars unless otherwise noted. Euro
    denominated notes have been translated to U.S. dollars at the period end
    exchange rates.  At November 30, 2002 and 2001, 65% and 66% of our debt
    was U.S. dollar denominated and 35% and 34% was euro denominated,
    respectively.
(b) These notes are not redeemable prior to maturity.

     Our unsecured 2% convertible notes ("2% Notes") and our zero-coupon
convertible notes ("Zero-Coupon Notes") are convertible into 15.3 million
shares and 17.4 million shares, respectively, of our common stock.  Our 2%
Notes are convertible at a conversion price of $39.14 per share, subject to
adjustment, during any fiscal quarter for which the closing price of our
common stock is greater than $43.05 per share for a defined duration of
time.  Our Zero-Coupon Notes have a 3.75% yield to maturity and are
convertible during any fiscal quarter for which the closing price of our
common stock reaches certain targeted levels for a defined duration of time.
These levels commenced at a low of $31.94 per share for the first quarter of
fiscal 2002 and increase at an annual rate of 3.75% thereafter, until
maturity. The conditions for conversion of our 2% Notes or Zero-Coupon Notes
were not met during fiscal 2002 and 2001.

     Subsequent to April 14, 2008, we may redeem all or a portion of our 2%
Notes at their face value plus any unpaid accrued interest, and subsequent
to October 23, 2008, we may redeem all or a portion of our Zero-Coupon Notes
at their accreted value.

     In addition, on April 15 of 2005, 2008 and 2011 our 2% Noteholders and
on October 24 of 2006, 2008, 2011 and 2016 our Zero-Coupon Noteholders may
require us to repurchase all or a portion of the outstanding 2% Notes at
their face value plus any unpaid accrued interest and the Zero-Coupon Notes
at their accreted value.

     Upon conversion, redemption or repurchase of our 2% Notes and Zero-
Coupon Notes we may choose to deliver common stock, cash or a combination of
cash and common stock with a total value equal to the value of the
consideration otherwise deliverable. If our 2% Notes and Zero-Coupon Notes
were to be put back to us, we expect to settle them for cash and,
accordingly, they are not included in our diluted earnings per share common
stock calculations.  However, no assurance can be given that we will have
sufficient liquidity to make such cash payments. See Note 14.

     In May 2001, Costa entered into a five-year 257.5 million euro (255.6
million U.S. dollars at the November 30, 2002 exchange rate) unsecured
floating rate euro denominated revolving credit facility, of which $145
million was available at November 30, 2002.

     Our $1.4 billion unsecured multi-currency revolving credit facility
matures in June 2006. This facility currently bears interest at
libor/euribor plus 17 basis points ("BPS"), which interest rate spread over
libor/euribor will vary based on changes to our senior unsecured debt
ratings, and provides for an undrawn facility fee of eight BPS.  Our
commercial paper program is supported by this revolving credit facility and,
accordingly, any amounts outstanding under our commercial paper program,
none at November 30, 2002 and 2001, reduce the aggregate amount available
under this facility. At November 30, 2002, $1.35 billion of this facility
was available.  This facility and other of our loan agreements contain
covenants that require us, among other things, to maintain a minimum debt
service coverage and limits our debt to tangible capital ratio and the
amount of our secured indebtedness.  In addition, our ability to draw upon
the then available portion of our $1.4 billion credit facility could be
terminated and we could also be required to repay the amounts outstanding
under our one collateralized and three unsecured euro notes, which amounted
to $722 million at November 30, 2002, if our business suffers a material
adverse change.  At November 30, 2002, we were in compliance with all of our
debt covenants.


     At November 30, 2002, the scheduled annual maturities of our long-term
debt was as follows (in thousands):

                         Fiscal

                         2003        $  148,642
                         2004           127,985
                         2005           907,648(a)
                         2006         1,387,209(a)
                         2007            22,833
                         Thereafter     566,294
                                     $3,160,611

(a) Includes $600 million of our 2% Notes in 2005 and $521 million of our
    Zero-Coupon Notes in 2006 based on the date of the noteholders first put
    option.

     Debt issuance costs are generally amortized to interest expense using
the straight-line method over the term of the notes or to the noteholders
first put option date, whichever is earlier.  In addition, all loan issue
discounts are amortized to interest expense using the effective interest
method over the term of the notes.


NOTE 7 - Commitments

     Ship Commitments

     A description of our ships under contract for construction at November
30, 2002 was as follows (in millions, except passenger capacity data):


                      Expected                                  Estimated
                      Service                     Passenger       Total
Ship                   Date(1)    Shipyard        Capacity(2)     Cost(3)

CCL
Carnival Glory           7/03    Fincantieri        2,974          $  510
Carnival Miracle         3/04    Masa-Yards (4)     2,124             375
Carnival Valor          11/04    Fincantieri(4)     2,974             510
Newbuild                 1/06    Fincantieri        2,974             460
  Total CCL                                        11,046           1,855
Holland America
Oosterdam                7/03    Fincantieri(4)     1,848             410
Westerdam                5/04    Fincantieri(4)     1,848             410
Newbuild                11/05    Fincantieri(4)     1,848             410
Newbuild                 6/06    Fincantieri        1,848             390
  Total Holland America                             7,392           1,620
Costa
Costa Mediterranea       6/03    Masa-Yards (5)     2,114             360
Costa Fortuna           12/03    Fincantieri(5)     2,720             440
Costa Magica            11/04    Fincantieri(5)     2,720             460
  Total Costa                                       7,554           1,260
Cunard
Queen Mary 2             1/04    Chantiers de
                                   l'Atlantique(4)  2,620             780
Newbuild                 2/05    Fincantieri(4)     1,968             410
  Total Cunard                                      4,588           1,190

    Total                                          30,580          $5,925

(1) The expected service date is the date the ship is currently expected to
    begin its first revenue generating cruise.
(2) 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.
(3) Estimated total cost of the completed ship includes the contract price
    with the shipyard, design and engineering fees, capitalized interest,
    construction oversight costs and various owner supplied items.
(4) These construction contracts are denominated in euros and have been
    fixed into U.S. dollars through the utilization of forward foreign
    currency contracts.  The $178 million of unrealized losses from these
    forward contracts has been recorded as fair value of derivative contract
    liabilities on our November 30, 2002 balance sheet and are also included
    in the above estimated total cost of these construction contracts.
(5) These construction contracts are denominated in euros, which is Costa's
    functional currency.  The estimated total costs have been translated
    into U.S. dollars using the November 30, 2002 exchange rate.

     In connection with our ships under contract for construction, we have
paid approximately $712 million through November 30, 2002 and anticipate
paying the remaining estimated total cost as follows (in millions):

                            Fiscal

                             2003           $1,630
                             2004            2,110
                             2005            1,140
                             2006              330
                                            $5,210

     Proposed Dual-Listed Company Transaction with P&O Princess Cruises plc
       ("P&O Princess")

     After a series of preconditional offers made to the shareholders of P&O
Princess by us, commencing in December 2001, on January 8, 2003 we entered
into an agreement with P&O Princess, the world's third largest cruise
company, providing for a combination of both companies (the "Combined
Group") under a dual-listed company ("DLC") structure.

     If the DLC transaction is completed, it would create a combination of
the two companies through a number of contracts and certain amendments to
our Articles of Incorporation and By-Laws and to P&O Princess' Memorandum
and Articles of Association. The two companies would retain their separate
legal identities and each company's shares would continue to be publicly
traded on the New York Stock Exchange for us and the London Stock Exchange
for P&O Princess.  However, both companies would operate as if they were a
single economic enterprise. The contracts governing the DLC structure would
provide that the boards of directors of the two companies would be
identical, the companies would be managed by a unified senior management
team and that, as far as possible, P&O Princess' and our shareholders would
be placed in substantially the same economic position as if they held shares
in a single enterprise which owned all of the assets of both companies. The
net effect of the DLC transaction would be that our existing shareholders
would own an economic interest equal to approximately 74% of the Combined
Group and the existing shareholders of P&O Princess would own an economic
interest equal to approximately 26% of the Combined Group.  Also in
connection with the DLC transaction, we will be making a Partial Share Offer
("PSO") for 20% of P&O Princess' shares, which will enable P&O Princess
shareholders to exchange P&O Princess shares for our shares on the basis of
0.3004 of our shares for each P&O Princess share up to, in aggregate, a
maximum of 20% of P&O Princess issued share capital. If the maximum number
of P&O Princess' shares are exchanged under the PSO, holders of our shares,
including our new shareholders who exchanged their P&O Princess shares for
our shares under the PSO, would own an economic interest equal to
approximately 79% of the Combined Group and holders of P&O Princess shares
would own an economic interest equal to approximately 21% of the Combined
Group. The PSO is conditional on, among other things, the closing of the DLC
transaction.  Upon completion of the DLC transaction, P&O Princess will
reorganize and consolidate its share capital so that one share of P&O
Princess will have the same economic and voting interest as one of our
shares.

     The completion of the DLC transaction between P&O Princess and us is
subject to approval by P&O Princess' shareholders and our shareholders. No
assurance can be given that the DLC transaction will be completed and, if it
is completed, when completion will take place.  If the DLC transaction is
not completed by September 30, 2003, either party can terminate the
agreement if it is not in material breach of its obligations. We have
incurred $30 million of transaction costs as of November 30, 2002, and
continue to incur costs, which have been or will be deferred in connection
with the DLC transaction.  In the event a transaction with P&O Princess is
not consummated, we would be required to write off the above $30 million
plus all costs incurred and deferred subsequent to November 30, 2002,
resulting in an estimated total write-off of approximately $45 million to
$50 million. If the DLC transaction or another transaction with P&O Princess
is completed by us, these deferred costs, together with any additional
direct costs, which may be incurred, would be capitalized as part of the
transaction.

     If our agreement with P&O Princess is terminated under certain
circumstances, we would be required to pay P&O Princess a break fee of $49
million.  These circumstances include, among other things, our board of
directors withdrawing or adversely modifying its recommendation to
shareholders to approve the DLC transaction, our board of directors
recommending an alternative acquisition proposal to shareholders, or our
shareholders failing to approve the DLC transaction if a third-party
acquisition proposal exists at the time of our meeting or if we breach our
exclusivity covenant and a third party acquisition proposal with respect to
us is completed prior to July 2004. Similarly, P&O Princess would be
obligated to pay us a break fee of $49 million upon the occurrence of
reciprocal circumstances.

     If the DLC transaction is completed, we expect to account for it as an
acquisition of P&O Princess by us, which will be accounted for using the
purchase method.


     Operating Leases

     Rent expense under our operating leases, primarily for office and
warehouse space, was $15 million, $13 million and $10 million in fiscal
2002, 2001 and 2000, respectively.  At November 30, 2002, minimum annual
rentals for our operating leases, with initial or remaining terms in excess
of one year, were as follows (in thousands):

                             Fiscal

                             2003          $10,700
                             2004            9,300
                             2005            9,100
                             2006            9,100
                             2007            6,000
                             Thereafter     25,300
                                           $69,500

     Port Facilities and Other

     At November 30, 2002, we had commitments through 2027, with initial or
remaining terms in excess of one year, to pay minimum amounts for our annual
usage of port facilities and other contractual commitments as follows (in
thousands):

                            Fiscal
                             2003         $ 52,100
                             2004           38,800
                             2005           25,300
                             2006           25,800
                             2007           27,100
                             Thereafter    179,600
                                          $348,700

     Travel Vouchers

     Pursuant to CCL's and Holland America's settlement of litigation,
travel vouchers with face values of $10 to $55 were required to be issued to
qualified past passengers.  As of November 30, 2002, approximately $123
million of these travel vouchers are available to be used for future travel
prior to their expiration, principally in fiscal 2005.


NOTE 8 - Contingencies

     Litigation

     Several actions (collectively, the "ADA Complaints") have been filed
against Costa, Cunard and Tours alleging that they violated the Americans
with Disabilities Act by failing to make certain cruise ships accessible to
individuals with disabilities.  The plaintiffs seek injunctive relief to
require modifications to certain vessels to increase accessibility to
disabled passengers and fees and costs.  Costa and the plaintiffs have
agreed to settle this action, subject to court approval.  Cunard and Tours
are in ongoing settlement negotiations with the plaintiffs.

     Three actions (collectively, the "Facsimile Complaints") were filed
against us on behalf of purported classes of persons who received
unsolicited advertisements via facsimile, alleging that we and other
defendants distributed unsolicited advertisements via facsimile in
contravention of the U.S. Telephone Consumer Protection Act.  The plaintiffs
seek to enjoin the sending of unsolicited facsimile advertisements and
statutory damages.  The advertisements referred to in the Facsimile
Complaints were not sent by us, but rather were distributed by a
professional faxing company at the behest of travel agencies that referenced
a CCL product.  We do not advertise directly to the traveling public through
the use of facsimile transmission.

     The ultimate outcome of the pending ADA and Facsimile Complaints cannot
be determined at this time.  We believe that we have meritorious defenses to
these claims and, accordingly, we intend to vigorously defend against these
actions.

     Several actions filed in the U.S. District Court for the Southern
District of Florida against us and four of our executive officers on behalf
of a purported class of persons who purchased our common stock were
consolidated into one action in Florida (the "Stock Purchaser Complaint").
The plaintiffs have claimed that statements we made in public filings
violated federal securities laws and seek unspecified compensatory damages
and attorney and expert fees and costs.   Recently, a magistrate judge
recommended that our motion to dismiss the Stock Purchaser Complaint be
granted and that the plaintiffs' amended complaint be dismissed without
prejudice.  However, because it was dismissed without prejudice, the
plaintiffs may file a new amended complaint. Nevertheless, the parties have
entered into a memorandum of understanding settling the case pending
confirmatory discovery and judicial approval.  A substantial portion of the
$3.4 million settlement amount, which includes plaintiff's attorneys fees,
will be covered by insurance.

     In February 2001, Holland America Line-USA, Inc. ("HAL-USA"), our
wholly-owned subsidiary, received a grand jury subpoena requesting that it
produce documents and records relating to the air emissions from Holland
America ships in Alaska.  HAL-USA responded to the subpoena.  The ultimate
outcome of this matter cannot be determined at this time.

     On August 17, 2002, an incident occurred in Juneau, Alaska onboard
Holland America's Ryndam involving a wastewater discharge from the ship.  As
a result of this incident, various Ryndam ship officers have received grand
jury subpoenas from the Office of the U.S. Attorney in Anchorage, Alaska
requesting that they appear before a grand jury.  One of the subpoenas also
requests the production of Holland America documents, which Holland America
is producing. If the investigation results in charges being filed, a
judgment could include, among other forms of relief, fines and debarment
from federal contracting, which would prohibit operations in Glacier Bay
National Park and Preserve during the period of debarment.  The State of
Alaska is separately investigating this incident.  The ultimate outcome of
these matters cannot be determined at this time.

     Costa has 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.
Costa has also given notice of termination of the contract.  It is now
expected that the arbitration tribunal's decision will be made in mid-2004
at the earliest.  In the event that an award is given in favor of Cammell
Laird, the amount of damages, which Costa will have to pay, if any, is not
currently determinable. The ultimate outcome of this matter cannot be
determined at this time.

     In the normal course of our business, various other claims and lawsuits
have been filed or are pending against us.  Most of these claims and
lawsuits are covered by insurance.  We are not able to estimate the impact
or the ultimate outcome of any such actions, which are not covered by
insurance.

     Contingent Obligations

     At November 30, 2002, we had contingent obligations totaling $1.05
billion to participants in lease out and lease back type transactions for
three of our ships.  At the inception of the leases, the entire amount of
the contingent obligations was paid by us to major financial institutions to
enable them to directly pay these obligations.  Accordingly, these
obligations were considered extinguished, and neither funds nor the
contingent obligations have been included on our balance sheets.  We would
only be required to make any payments under these lease contingent
obligations in the remote event of nonperformance by these financial
institutions, all of which have long-term credit ratings of AAA or AA.  In
addition, we obtained a direct guarantee from another AAA rated financial
institution for $285 million of the above noted contingent obligations,
thereby reducing even the remote exposure to this portion of the contingent
obligations.  If the major financial institutions' credit ratings fall below
AA-, we would be required to move a majority of the funds from these
financial institutions to other highly-rated financial institutions.  If our
credit rating falls below BBB, we would be required to provide a standby
letter of credit for $91 million, or alternatively provide mortgages in the
aggregate amount of $91 million on two of our ships.

     In the unlikely event that we were to terminate the three lease
agreements early or default on our obligations, we would, as of November 30,
2002 have to pay a total of $180 million in stipulated damages.  As of
November 30, 2002, $148 million of standby letters of credit have been
issued by a major financial institution in order to provide further security
for the payment of these contingent stipulated damages.  An additional $40
million of standby letters of credit would be required to be issued if our
three credit ratings fall below A-/A3.  Between 2017 and 2022, we have the
right to exercise options that would terminate these transactions at no cost
to us.  We entered into these three transactions in order to receive $67
million, which was recorded as deferred income on our balance sheets and is
being amortized to nonoperating income through 2022.  In the event we were
to default under our $1.4 billion revolving credit facility, we would be
required to post cash collateral to support the stipulated damages standby
letters of credit.

NOTE 9 - Income and Other Taxes

     We believe that substantially all of our income, with the exception of
our U.S. source income from the transportation, hotel and tour businesses of
Tours, is exempt from U.S. federal income taxes. If we were found not to
qualify for exemption pursuant to applicable income tax treaties or under
the Internal Revenue Code or if the income tax treaties or Internal Revenue
Code were to be changed in a manner adverse to us, a portion of our income
would become subject to taxation by the U.S. at higher than normal corporate
tax rates.

     Some of our subsidiaries, including Costa and Tours, are subject to
foreign and/or U.S. income taxes.  In fiscal 2002, we recognized a net $57
million income tax benefit primarily due to a new Italian investment
incentive law, which allowed Costa to receive a $51 million income tax
benefit based on contractual expenditures during 2002 on the construction of
new ships. At November 30, 2002, Costa had a remaining net deferred tax
asset of approximately $45 million relating to the tax benefit of the net
operating loss carryforwards arising from this incentive law, which expire
in 2007.  In fiscal 2001, we recognized a $9 million income tax benefit from
Costa primarily due to changes in Italian tax law.

     We do not expect to incur income taxes on future distributions of
undistributed earnings of foreign subsidiaries and, accordingly, no deferred
income taxes have been provided for the distribution of these earnings.

     In addition to or in place of income taxes, virtually all jurisdictions
where our ships call, impose taxes based on passenger counts, ship tonnage
or some other measure.  These taxes, other than those directly charged to
and collected from passengers by us, are recorded as operating expenses in
the accompanying statements of operations.

NOTE 10 - Shareholders' Equity

     Our Articles of Incorporation authorize our Board of Directors, at
their discretion, to issue up to 40 million shares of our preferred stock.
At November 30, 2002 and 2001, no preferred stock had been issued.

     In February 2000, our Board of Directors authorized the repurchase of
up to $1 billion of our common stock.  As of November 30, 2001, we had
repurchased 33.1 million shares of our common stock at a cost of $705
million pursuant to this authorization.  In addition in 2001, we received
761,000 shares of our common stock from our chief executive officer valued
at its quoted market price of $23 million, which we recorded as treasury
stock, in payment of the exercise price for two million shares of our common
stock issued to him pursuant to a stock option plan (see Note 13).  In
fiscal 2002, we retired all of our treasury stock.

    At November 30, 2002, there were 77.5 million shares of our common stock
reserved for issuance pursuant to our convertible notes and our stock
option, employee stock purchase, restricted stock and dividend reinvestment
plans.  During fiscal 2002, 2001 and 2000 we declared cash dividends
aggregating $0.42 per share for each year.

     At November 30, 2002 and 2001, AOCI included cumulative foreign
currency translation adjustments which increased shareholders' equity by $29
million and decreased shareholders' equity by $22 million, respectively.

NOTE 11 - Financial Instruments

     We estimated the fair value of our financial instruments through the
use of public market prices, quotes from financial institutions and other
available information.  Considerable judgment is required in interpreting
data to develop estimates of fair value and, accordingly, amounts are not
necessarily indicative of the amounts that we could realize in a current
market exchange.  Our financial instruments are not held for trading or
other speculative purposes.

     Cash and Cash Equivalents

     The carrying amounts of our cash and cash equivalents approximate their
fair values due to their short maturities.

     Other Assets

     At November 30, 2002 and 2001, long-term other assets included
marketable securities held in rabbi trusts for certain of our nonqualified
benefit plans and notes and other receivables, principally collateralized by
a ship, the former Nieuw Amsterdam. These assets had carrying and fair
values of $173 million at November 30, 2002 and $143 million at November 30,
2001. Fair values were based on public market prices, estimated discounted
future cash flows or estimated fair value of collateral.

     Long-Term Debt

     At November 30, 2002 and 2001, the fair value of our long-term debt,
including the current portion, was $3.33 billion and $2.95 billion,
respectively, which was $166 million greater than and $26 million less than
its carrying value on those respective dates. The net difference between the
fair value of our long-term debt and its carrying value was due primarily to
our issuance of debt obligations at fixed interest rates that are below or
above market interest rates in existence at the measurement dates.  The fair
values of our unsecured fixed rate notes, convertible notes and unsecured
5.57% euro notes were based on their public market prices.  The fair values
of our other long-term debt were estimated based on appropriate market
interest rates being applied to this debt.

     Foreign Currency Contracts

     We have forward foreign currency contracts, designated as foreign
currency fair value hedges, for seven of our euro denominated shipbuilding
contracts (see Note 7).  At November 30, 2002 and 2001, the fair value of
these forward contracts was an unrealized loss of $178 million and $567
million, respectively.  These forward contracts mature through 2005.  The
fair values of our forward contracts were estimated based on prices quoted
by financial institutions for these instruments.

     Interest Rate Swaps

     We have interest rate swap agreements designated as fair value hedges
whereby we receive fixed interest rate payments in exchange for making
variable interest rate payments.  At November 30, 2002 and 2001, these
interest rate swap agreements effectively changed $225 million of fixed rate
debt with a weighted-average fixed interest rate of 6.8% to Libor-based
floating rate debt.

     In addition, we also have interest rate swap agreements designated as
cash flow hedges whereby we receive variable interest rate payments in
exchange for making fixed interest rate payments.  At November 30, 2002 and
2001, these interest rate swap agreements effectively changed $468 million
and $637 million, respectively, of euribor floating rate debt to fixed rate
debt with a weighted-average fixed interest rate of 5.5% and 5.3%,
respectively.

     These interest rate swap agreements mature through 2006.  At November
30, 2002 and 2001, the fair value of our interest rate swaps was a net
unrealized loss of $0.1 million and $3.3 million, respectively.  The fair
values of our interest rate swap agreements were estimated based on
appropriate market interest rates being applied to these instruments.

NOTE 12 - Segment Information

     Our cruise segment included six cruise brands (five, excluding Costa,
prior to fiscal 2001), which have been aggregated as a single reportable
segment based on the similarity of their economic and other characteristics.
Cruise revenues are comprised of sales of passenger cruise tickets, which
includes accommodations, meals and most onboard activities, in some cases
the sale of air transportation to and from our cruise ships, and the sale of
certain onboard activities and other services. The tour segment represents
the transportation, hotel and tour operations of Tours.

     The significant accounting policies of the segments are the same as
those described in Note 2 - "Summary of Significant Accounting Policies."
Cruise revenues included intersegment revenues, which primarily represent
billings to the tour segment for the cruise portion of a tour when a cruise
is sold as a part of a tour package.  In addition, cruise and tour operating
expenses included a cost allocation of certain corporate and other expenses.
Information for the cruise and tour segments for fiscal 2002, 2001 and 2000
was as follows (in thousands)



                            Operating     Depreciation
                             income           and         Capital         Total
                Revenues      (loss)      amortization  expenditures      assets
2002
                                                            
Cruise (b)     $4,229,124  $1,055,460 (a)  $   370,998  $  1,949,680   $12,120,443
Tour              175,831     (13,401)          11,345        36,802       214,405(c)
Intersegment
  elimination     (36,686)
               $4,368,269  $1,042,059      $   382,343   $ 1,986,482   $12,334,848

2001
Cruise (b)     $4,357,942  $  946,112 (a)  $   360,750    $  801,460   $11,375,256
Tour              229,483     (10,357)(a)       11,474        25,108       188,296(c)
Affiliated
  operations(d)               (44,024)
Intersegment
  elimination     (51,674)
               $4,535,751  $  891,731      $   372,224    $  826,568   $11,563,552

2000
Cruise (b)     $3,578,372  $  937,466      $   276,842    $  973,219   $ 9,194,207
Tour              259,662       7,664           10,825        30,129       199,722(c)
Affiliated
  operations                   37,828(b)                                   437,391
Intersegment
  elimination     (59,492)
               $3,778,542  $  982,958       $  287,667    $1,003,348   $ 9,831,320



(a) Cruise operating income included impairment charges of $20 million in
    2002 and $134 million in 2001 and Tour operating loss included $6
    million in 2001 (see Note 4).
(b) In 2002 and 2001, the cruise segment information included Costa.  At
    November 30, 2000, Costa's total assets were included in the cruise
    segment, but its 2000 results of operations were included in the
    affiliated operations segment (See Notes 2 and 17). In addition, in 2003
    we commenced allocating all corporate expenses to our cruise segment.
    Accordingly, the presentations for fiscal 2002, 2001 and 2000 have been
    reclassified to allocate, the previously unallocated, 2002, 2001 and
    2000 corporate expenses to our cruise segment.
(c) Tour assets primarily included hotels in Alaska and the Canadian Yukon,
    luxury dayboats offering tours to the glaciers of Alaska and the Yukon
    River, motor coaches used for sightseeing and charters in the states of
    Washington and Alaska, British Columbia, Canada and the Canadian Yukon
    and private, domed rail cars, which are run on the Alaska Railroad
    between Anchorage and Fairbanks.
(d) On June 1, 2001, we sold our investment in Airtours.  Accordingly, we
    did not record any equity in the earnings or losses from the affiliated
    operations of Airtours after our quarter ended May 31, 2001.

     See Note 5 for affiliated operations segment information, which were
not included in our consolidated operations.

     Foreign revenues for our cruise brands, excluding Costa in 2000,
represent sales generated from outside the U.S. primarily by foreign tour
operators and foreign travel agencies.  The majority of these foreign
revenues are from Italy, Canada, United Kingdom, France, Germany and Spain.
Substantially all of our long-lived assets are located outside of the U.S.
and consist principally of our goodwill, ships and ships under construction.

Revenue information by geographic area for fiscal 2002, 2001 and 2000 was as
follows (in thousands):

                                      2002         2001         2000


                U.S.            $ 3,292,533   $ 3,489,913   $3,180,667
                Foreign           1,075,736     1,045,838      597,875
                                $ 4,368,269   $ 4,535,751   $3,778,542

NOTE 13 - Benefit Plans

     Stock Option Plans

     We have stock option plans primarily for supervisory and management
level employees and members of our Board of Directors.  The plans are
administered by a committee of three of our directors (the "Committee")
which determines who is eligible to participate, the number of shares for
which options are to be granted and the amounts that may be exercised within
a specified term.  The option exercise price is generally set by the
Committee at 100% of the fair market value of the common stock on the date
the option is granted. Substantially all options granted during fiscal 2002,
2001 and 2000 were granted at an exercise price per share equal to the fair
market value of our common stock on the date of grant.  Employee options
generally have vested evenly over five years and have a ten year term and
director options granted prior to fiscal 2001 have vested immediately and
have a five or ten year term.  Director options granted subsequent to fiscal
2000 will vest evenly over five years and have a ten year term.  At November
30, 2002, options for 40.7 million shares were available for future grants
under the above plans.  A summary of the activity and status of our stock
option plans was as follows:






                             Weighted
                      Average Exercise Price                 Number of Options
                             Per Share                   Years Ended November 30,
                       2002    2001    2000           2002        2001         2000
                                                       
Outstanding options-
  beginning of year   $28.95  $26.80  $22.70     12,774,293     8,840,793    6,517,168
Options granted       $26.54  $26.44  $35.92         33,000     6,580,250    2,910,575
Options exercised     $14.35  $11.70  $13.43       (404,615)   (2,218,075)    (244,850)
Options canceled      $32.80  $35.15  $35.91       (573,720)     (428,675)    (342,100)
Outstanding options-
  end of year         $29.26  $28.95  $26.80     11,828,958    12,774,293    8,840,793
Options exercisable-
  end of year         $28.71  $25.96  $15.82      4,775,894     2,972,498    4,042,452


Information with respect to outstanding and exercisable stock options at November 30,
2002 was as follows:


                              Options Outstanding               Options Exercisable
                                    Weighted      Weighted                 Weighted
                                    Average       Average                  Average
Exercise                           Remaining      Exercise                 Exercise
Price Range              Shares    Life (Years)    Price        Shares      Price

$ 1.94-$ 2.25            32,980         (a)        $ 2.06        32,980     $ 2.06
$ 6.94-$10.31            17,300        0.7         $ 9.76        17,300     $ 9.76
$10.59-$15.00           666,050        2.3         $11.32       666,050     $11.32
$16.28-$22.57         3,901,084        8.1         $21.66     1,236,830     $20.75
$24.63-$27.78         1,182,894        6.3         $26.24       667,294     $26.35
$28.21-$34.88         3,070,500        8.1         $30.05       673,100     $30.47
$36.72-$41.34           102,000        5.8         $38.09        77,200     $38.05
$43.56-$48.56         2,856,150        6.7         $44.36     1,405,140     $44.57

Total                11,828,958        7.2         $29.26     4,775,894     $28.71




                                                       Payments Due by Fiscal
Contractual Cash
  Obligations (a)      Total       2003        2004        2005        2006        2007   Thereafter
                                                                        
Shipbuilding        $5,210,000  $1,630,000  $2,110,000  $1,140,000  $  330,000    $        $
Long-term debt       3,160,611     148,642     127,985     907,648   1,387,209     22,833   566,294
Port and other
  commitments          348,700      52,100      38,800      25,300      25,800     27,100   179,600
Operating leases        69,500      10,700       9,300       9,100       9,100      6,000    25,300

Total contractual
  cash obligations  $8,788,811  $1,841,442  $2,286,085  $2,082,048  $1,752,109   $ 55,933  $771,194




(a) See Notes 6 and 7 in the accompanying financial statements for
    additional information regarding our debt and these commitments.

     In addition, see Note 7, "Contingent Obligations" and Note 6, "Proposed
Dual-Listed Company Transaction with P&O Princess" and "Travel Vouchers" in
the accompanying financial statements for a discussion of our contingent
obligations related to our three lease-type ship transactions and our DLC
transaction and travel voucher commitments, respectively.

     At November 30, 2002, we had liquidity of $2.2 billion, which consisted
of $706 million of cash, cash equivalents and short-term investments and
$1.5 billion available for borrowing under our revolving credit facilities
obtained through a group of banks, which have strong credit ratings.  Our
revolving credit facilities mature in 2006.  A key to our access to
liquidity is the maintenance of our strong credit ratings.  The proposed
combination with P&O Princess under a DLC structure, if completed, may
result in our debt being downgraded from our current ratings.  A downgrade
would increase our cost-of-borrowing, although we believe our senior
unsecured debt will retain a strong investment grade rating.

     We believe that our existing liquidity, together with our forecasted
cash flow from future operations, will be sufficient to fund most of our
capital projects, debt service requirements, dividend payments and working
capital needs. Our forecasted cash flow from future operations, as well as
our credit ratings, may be adversely affected by various factors, including,
but not limited to, declines in customer demand, increased competition and
overcapacity, the deterioration in general economic and business conditions,
the international political and economic climate, accidents and other
incidents at sea, adverse publicity and increases in fuel prices, as well as
other factors noted under "Cautionary Note Concerning Factors That May
Affect Future Results."  To the extent that we are required, or choose, to
fund future cash requirements, including our future shipbuilding
commitments, from sources other than as discussed above, we believe that we
will be able to secure such financing from banks or through the offering of
debt and/or equity securities in the public or private markets. No assurance
can be given that our future operating cash flow will be sufficient to fund
future obligations or that we will be able to obtain additional financing,
if necessary.

     Although no assurance can be given, we expect to complete our DLC
transaction with P&O Princess in the second quarter of fiscal 2003.  As a
result of the DLC transaction, the Combined Group's outstanding long-term
debt will be approximately $5.7 billion and its shipbuilding commitments for
18 new cruise ships and two river boats will be approximately $7.0 billion,
which is a substantial increase over our existing obligations and
commitments. However, we believe that the Combined Group's liquidity,
including cash and committed financings, and cash flows from future
operations will be sufficient to fund the expected capital projects, debt
service requirements, dividend payments, working capital and other firm
commitments through at least the next twelve months.

Off-Balance Sheet Arrangements

     We are not a party to any off-balance sheet arrangements, including
guarantee contracts, retained or contingent interests, certain derivative
instruments and variable interest entities, that either have, or are
reasonably likely to have, a current or future material effect on our
financial statements.

Other Matter

     Market Risks

     We are principally exposed to market risks from fluctuations in foreign
currency exchange rates, bunker fuel prices and interest rates. We seek to
minimize foreign currency and interest rate risks through our normal
operating and financing activities, including netting certain exposures to
take advantage of any natural offsets, through our long-term investment and
debt portfolio strategies and, when considered appropriate, through the use
of derivative financial instruments.  The financial impacts of these hedging
instruments are offset by corresponding changes in the underlying exposures
being hedged.  Our policy is to not use financial instruments for trading or
other speculative purposes.

     Exposure to Foreign Currency Exchange Rates

     Our primary foreign currency exchange risk was related to our
outstanding commitments under ship construction contracts denominated in a
currency other than the functional currency of the cruise brand that is
expected to be operating the ship.  These non-functional currency
commitments are affected by fluctuations in the value of the functional
currency as compared to the currency in which the shipbuilding contract is
denominated.  Foreign currency forward contracts are generally used to
manage this risk (see Notes 2 and 11 in the accompanying financial
statements). Accordingly, increases and decreases in the fair value of these
foreign currency forward contracts offset changes in the fair value of the
hedged non-functional foreign currency denominated ship construction
commitments, thus resulting in the elimination of such risk.

     We have forward foreign currency contracts for seven of our euro
denominated shipbuilding contracts (see Note 7 in the accompanying financial
statement).  At November 30, 2002, the fair value of these forward contracts
was an unrealized loss of $178 million which is recorded, along with an
offsetting $178 million fair value asset related to our shipbuilding firm
commitments, on our accompanying 2002 balance sheet.  These foreign currency
forward contracts mature through 2005.  Based upon a 10% strengthening or
weakening of the U.S. dollar compared to the euro as of November 30, 2002,
assuming no changes in comparative interest rates, the estimated fair value
of these contracts would decrease or increase by $235 million, which would
be offset by a decrease or increase of $235 million in the U.S. dollar value
of the related foreign currency ship construction commitments resulting in
no net dollar impact to us.

     The cost of shipbuilding orders, which we may place in the future may
be affected by foreign currency exchange rate fluctuations.  Should the U.S.
dollar weaken relative to the euro, future orders for new ship construction
in European shipyards may be at higher prices relative to the U.S. dollar.

     Additionally, our investments in foreign subsidiaries subjects us to
foreign currency exchange rate risk.  We consider our investments in foreign
subsidiaries to be denominated in relatively stable currencies and/or of a
long-term nature and, accordingly, do not typically manage our related
foreign currency exchange rate risk through the use of derivative financial
instruments.  However, when we paid the Costa acquisition price, we utilized
debt denominated in euros, the functional currency of Costa, to reduce a
portion of this risk.

     Finally, we sell cruises and incur cruise expenses in foreign
currencies which subjects us to foreign currency exchange risk.  The primary
currencies for which we have exchange rate exposure are the U.S. dollar
versus both the euro and the UK Sterling.  We do not expect that the impact
of fluctuations in the foreign currency exchange rate on our foreign
currency denominated cruise revenues and expenses to materially affect our
results of operations due primarily to the natural hedges, which are
expected to exist within our operations, including interest expense on euro
denominated borrowings, and the relative stability of the foreign
currencies.  However, we will continue to monitor such items to determine if
any actions, such as the issuance of additional foreign currency denominated
debt or use of other financial instruments, would be warranted to reduce
such risk.

     Exposure to Bunker Fuel Prices

     Cruise ship operating expenses are impacted by changes in bunker fuel
prices.  Bunker fuel consumed over the past three fiscal years ranged from
approximately 4.2% in fiscal 2002 to 4.0% in fiscal 2001 and 2000 of our
gross cruise revenues.  We have typically not used financial instruments to
hedge our exposure to the bunker fuel price market risk.

     Based upon a 10% hypothetical increase or decrease in the November 30,
2002 bunker fuel price, we estimate that our fiscal 2003 bunker fuel cost
would increase or decrease by approximately $19 million compared to fiscal
2002.  See "Outlook For Fiscal 2003."

     Exposure to Interest Rates

     In order to limit our exposure to interest rate fluctuations, we have
entered into a substantial number of fixed rate debt instruments. We
continuously evaluate our debt portfolio, including interest rate swap
agreements, and make periodic adjustments to the mix of floating rate and
fixed rate debt based on our view of interest rate movements.  Accordingly
in 2001, we entered into fixed to variable interest rate swap agreements,
which lowered our fiscal 2002 and 2001 interest costs and are also expected
to lower our fiscal 2003 interest costs.  At November 30, 2002, 81% of the
interest cost on our debt was effectively fixed and 19% was variable.

     At November 30, 2002, our long-term debt had a carrying value of $3.16
billion.  At November 30, 2002, our swap agreements effectively changed $225
million of fixed rate debt with a weighted-average fixed interest rate of
6.8% to Libor-based floating rate debt.  In addition, interest rate swaps at
November 30, 2002, effectively changed $468 million of euribor floating rate
debt to fixed rate debt with a weighted-average fixed interest rate of 5.5%.
These interest rate swaps mature through 2006.  The fair value of our debt
and swaps at November 30, 2002 was $3.33 billion.  Based upon a hypothetical
10% decrease or increase in the November 30, 2002 market interest rates, the
fair value of our debt and swaps would increase or decrease by $55 million.
In addition, based upon a hypothetical 10% decrease or increase in our
November 30, 2002 common stock price, the fair value of our convertible
notes would increase or decrease by approximately $26 million.

     These hypothetical amounts are determined by considering the impact of
the hypothetical interest rates and common stock price on our existing debt
and interest rate swaps.  This analysis does not consider the effects of the
changes in the level of overall economic activity that could exist in such
environments or any relationships which may exist between interest rate and
stock price movements.  Furthermore, since substantially all of our fixed
rate debt cannot currently be called or prepaid and a majority of our
variable rate debt is subject to interest rate swaps which effectively fix
the interest rate in the short-term, it is unlikely we would be able to take
any significant steps in the short-term to mitigate our exposure in the
event of a significant decrease in market interest rates.


Selected Financial Data

     The selected consolidated financial data presented below for fiscal
1998 through 2002 and as of the end of each such fiscal year, are derived
from our audited financial statements and should be read in conjunction with
those financial statements and the related notes.





                                                Years Ended November 30,
                               2002          2001          2000        1999        1998
                                   (in thousands, except per share data and percentages)
Statement of Operations
  and Other Data (a)
                                                                      

Revenues                 $4,368,269    $4,535,751    $3,778,542  $3,497,470  $3,009,306
Operating income         $1,042,059    $  891,731    $  982,958  $1,019,699  $  896,524
Net income(b)            $1,015,941(c) $  926,200(c) $  965,458  $1,027,240  $  835,885
   Earnings per share (b)
  Basic                  $     1.73    $     1.58    $     1.61  $     1.68  $     1.40(d)
  Diluted                $     1.73    $     1.58    $     1.60  $     1.66  $     1.40(d)
Dividends declared
  per share              $     .420    $     .420    $     .420  $     .375  $     .315(d)
Cash from operations     $1,469,032    $1,238,936    $1,279,535  $1,329,724  $1,091,840
Capital expenditures     $1,986,482    $  826,568    $1,003,348  $  872,984  $1,150,413
Available lower berth
  days(e)                    21,436        20,685        15,888      14,336      12,237
Passengers carried            3,549         3,385         2,669       2,366       2,045
Occupancy percentages (f)     105.2%        104.7%        105.4%      104.3%      106.3%


                                                   As of November 30,
                               2002 (a)      2001 (a)      2000(a)     1999        1998
                                         (in thousands, except percentages)
Balance Sheet and Other
  Data

Total assets              $12,334,848(g) $11,563,552(g)  $9,831,320  $8,286,355  $7,179,323
Long-term debt, excluding
  current portion         $ 3,011,969    $ 2,954,854     $2,099,077  $  867,515  $1,563,014
Total shareholders'
  equity                  $ 7,417,903    $ 6,590,777     $5,870,617  $5,931,247  $4,285,476
Debt to capital(h)               29.9%          31.1%          28.6%       15.3%       27.6%





(a) From June 1997 through September 28, 2000, we owned 50% of Costa.  On
    September 29, 2000, we completed the acquisition of the remaining 50%
    interest in Costa.  We accounted for this transaction using the purchase
    accounting method.  Prior to the fiscal 2000 acquisition, we accounted
    for our 50% interest in Costa using the equity method.  Commencing in
    fiscal 2001, Costa's results of operations have been consolidated in the
    same manner as our other wholly-owned subsidiaries.  Our November 30,
    2000 and subsequent consolidated balance sheets include Costa's balance
    sheet.  All statistical information prior to 2001 does not include
    Costa.  See Notes 5 and 17 in the accompanying financial statements.
(b) Effective December 1, 2001, we adopted SFAS No. 142, which requires us
    to stop amortizing goodwill and requires an annual, or when events or
    circumstances dictate a more frequent, impairment review of goodwill.
    Accordingly, as of December 1, 2001, we no longer amortize our goodwill.
    If goodwill had not been recorded for periods prior to December 1, 2001,
    our adjusted net income and adjusted basic and diluted earnings per
    share would have been as follows (dollars in thousands, except per share
    data):

                                        Years Ended November 30,
                                 2001      2000        1999      1998

    Net income                 $926,200  $965,458  $1,027,240  $835,885
    Goodwill amortization        25,480    23,046      20,666    17,074

    Adjusted net income        $951,680  $988,504  $1,047,906  $852,959

    Adjusted earnings per share
      Basic                       $1.63     $1.65       $1.71     $1.43
      Diluted                     $1.62     $1.64       $1.70     $1.43

(c) Our net income for fiscal 2002 and 2001 includes an impairment charge of
    $20 million and $140 million, respectively, and fiscal 2001 includes a
    nonoperating net gain of $101 million from the sale of our investment in
    Airtours.  In addition, fiscal 2002 includes a $51 million income tax
    benefit as a result of a new Italian investment incentive, which allows
    Costa to receive an income tax benefit based on contractual expenditures
    during 2002 on construction of new ships. See Notes 4, 5 and 9 in the
    accompanying financial statements.
(d) The 1998 per share amounts have been adjusted to reflect a two-for-one
    stock split effective June 12, 1998.
(e) Represents the total annual passenger capacity, assuming two passengers
    per cabin, that our ships offered for sale, which is computed by
    multiplying passenger capacity by ship operating days.
(f) In accordance with cruise industry practice, occupancy percentage is
    calculated based upon two passengers per cabin even though some cabins
    can accommodate three or more passengers. The percentages in excess of
    100% indicate that more than two passengers occupied some cabins.
(g) Effective December 1, 2000, we adopted SFAS No. 133, which requires that
    all derivative instruments be recorded on our balance sheet.  Total 2002
    and 2001 assets include $178 million and $567 million, respectively,
    which represents the fair value of hedged firm commitments. See Note 2
    in the accompanying financial statements.
(h) Represents the percentage of total debt to the sum of total debt and
    shareholders' equity.

Market Price for Common Stock

     Our common stock is traded on the New York Stock Exchange under the
symbol CCL.  Our intra-day high and low common stock sales prices for the
periods indicated were as follows:


                                 High              Low
Fiscal 2002:
       First Quarter           $28.62            $25.05
       Second Quarter          $34.64            $27.40
       Third Quarter           $30.90            $22.81
       Fourth Quarter          $29.78            $22.07

Fiscal 2001:
       First Quarter           $34.94            $21.94
       Second Quarter          $33.40            $23.60
       Third Quarter           $33.74            $25.89
       Fourth Quarter          $31.47            $16.95

     As of January 29, 2003, there were approximately 4,556 holders of
record of our common stock.  The Republic of Panama does not currently have
tax treaties with any other country. Under current law, we believe that
distributions to our shareholders, other than residents of Panama or other
business entities conducting business in Panama, are not subject to taxation
under the laws of the Republic of Panama.  Dividends that we pay to U.S.
citizens, residents, corporations and to foreign corporations doing business
in the U.S., to the extent treated as "effectively connected" income, will
be taxable as ordinary income for U.S. federal income tax purposes to the
extent of our current or accumulated earnings and profits, but generally
will not qualify for any dividends-received deduction.



Selected Quarterly Financial Data (Unaudited)

       Quarterly financial results for fiscal 2002 were as follows:


                                                Quarters Ended
                              February 28      May 31      August 31     November 30
                                        (in thousands, except per share data)
                                                              
Revenues                     $  905,776   $  989,157    $1,437,655     $1,035,681
Gross profit                 $  387,611   $  455,702    $  755,412     $  457,625
Operating income             $  145,812   $  220,411    $  488,424(a)  $  187,412(a)
Net income                   $  129,640   $  194,201    $  500,764     $  191,336
Earnings per share
  Basic                      $      .22   $      .33    $      .85     $      .33
  Diluted                    $      .22   $      .33    $      .85     $      .33
Dividends declared
  per share                  $     .105   $     .105    $     .105     $     .105

 (a) Includes a $17 million and a $34 million income tax benefit in the August 31 and
     November 30 quarters, respectively, from Costa, resulting from a new Italian
     investment incentive law.  In addition, the August 31 quarter includes a $20
     million impairment charge.


   Quarterly financial results for fiscal 2001 were as follows:

                                               Quarters Ended
                              February 28      May 31       August 31    November 30
                                        (in thousands, except per share data)


Revenues                    $1,007,606      $1,079,125    $1,489,918    $959,102
Gross profit                $  407,486      $  477,791    $  770,540    $411,204
Operating income            $  138,941      $  207,907    $  425,346    $119,537
Net income                  $  127,950(a)   $  186,963(b) $  494,975(c) $116,312(d)
Earnings per share
  Basic                     $      .22      $      .32    $      .84    $    .20
  Diluted                   $      .22      $      .32    $      .84    $    .20
Dividends declared
  per share                 $     .105      $     .105    $     .105    $   .105