Thread: Carnival Files 10-K, releases findings on Costa Concordia losses

Carnival Cruise Lines released their first 10K SEC filing since the Costa Concordia tragedy on January 30, 2012.

They've made some statements regarding the Costa Concordia and the losses they expect to subsume. I know many of you are interested investors and Carnival Cruise Lines, Plc represents a stock many of you are either fond of or track.

The ex-analyst in me wanted to do some digging and see what we could find. Below are some excerpts. You can read the full document here: http://sec.gov/Archives/edgar/data/8...254914d10k.htm

II.

Recent Development

On January 13, 2012, Costa Concordia, a cruise ship owned and operated by Costa, grounded off the coast of Isola del Giglio, Italy and sustained significant damage. Tragically, there were 16 casualties, a number of injuries and 16 people remain missing, as of January 26, 2012. The ship remains grounded and partially submerged off the coast. The cause of the accident is currently under investigation by the Italian authorities.
We are deeply saddened by this tragic event and our hearts go out to everyone affected, and especially to the families and loved ones of those who lost their lives or were injured. They will remain in our thoughts. We are committed to providing full support to the passengers, crew and families of those affected by the accident. We are also working to secure the vessel and continue to use our best efforts to ensure there is no environmental impact.
Following the tragic accident, we announced a comprehensive audit and review of all safety and emergency response procedures across all of our brands to identify lessons learned and best practices to further ensure the safety of all of our passengers and crew. Additionally, the Health, Environment, Safety & Security Committees of the Boards of Directors (“HESS Committees�) are engaging outside industry-leading experts in the fields of emergency response, organization, training and implementation to conduct an audit of all of our emergency response and safety procedures and to conduct a thorough review of the accident.
A damage assessment review of the ship is being undertaken to determine whether the ship can be repaired and what the total cost would be. If the ship is repairable, it is expected to be out-of-service for the remainder of fiscal 2012 if not longer.
The net carrying value of this euro-denominated ship, including ship improvements, at December 31, 2011 was $490 million (at the December 31, 2011 exchange rate or €379 million). We have euro-denominated insurance coverage of $510 million (at the December 31, 2011 exchange rate or €395 million) for damage to the ship with a potential deductible of approximately $30 million as well as insurance for third party personal injury liability subject to an additional deductible of approximately $10 million for this incident. We self-insure for loss of use of the ship.

Item 3.

Legal Proceedings.

On January 13, 2012, Costa Concordia grounded off the coast of Isola del Giglio, Italy and sustained significant damage. There were 16 casualties, a number of injuries and 16 people remain missing, as of January 26, 2012. The ship remains grounded and partially submerged off the coast. The cause of the accident is currently under investigation by the Italian authorities. As a result of this accident, litigation claims, enforcement actions and regulatory actions and investigations, including but not limited to those arising from personal injury, loss of life, loss of or damage to personal property, business interruption losses or environmental damage to any affected coastal waters and the surrounding area, may be asserted or brought against various parties including us.
On January 26, 2012, a purported class action was filed by Gary Lobaton in the United States District Court for the Northern District of Illinois (Eastern Division) naming as defendants Costa Crociere, S.p.A., Carnival Corporation and Carnival plc (Gary Lobaton v Carnival Corporation, Carnival plc and Costa Crociere S.p.A. et. al., No. 12-cv-00598). The plaintiff purports to represent an alleged class of the passengers and crew of Costa Concordia who were onboard the ship on January 13, 2012. The complaint alleges that the defendants violated the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea, breached contracts with employees and passengers and acted negligently. The plaintiff also alleges unjust enrichment. The complaint seeks unspecified monetary and punitive damages, interests and costs, among other things.