Carnival 10-Q 2023-02-28

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2023

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: 001-9610												Commission file number: 001-15136
Carnival Corporation												Carnival plc
(Exact name of registrant as specified in its charter)									(Exact name of registrant as specified in its charter)
Republic of Panama									England and Wales
(State or other jurisdiction of incorporation or organization)									(State or other jurisdiction of incorporation or organization)
59-1562976									98-0357772
(I.R.S. Employer Identification No.)									(I.R.S. Employer Identification No.)
3655 N.W. 87th Avenue									Carnival House, 100 Harbour Parade
Miami,			Florida			33178-2428			Southampton			SO15 1ST			United Kingdom
(Address of principal executive offices) (Zip Code)									(Address of principal executive offices) (Zip Code)

(305)			599-2600						011			44 23 8065 5000
(Registrant’s telephone number, including area code)									(Registrant’s telephone number, including area code)
None									None
(Former name, former address and former fiscal year, if changed since last report)									(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common Stock ($0.01 par value)			CCL			New York Stock Exchange, Inc.
Ordinary Shares each represented by American Depository Shares ($1.66 par value), Special Voting Share, GBP 1.00 par value and Trust Shares of beneficial interest in the P&O Princess Special Voting Trust			CUK			New York Stock Exchange, Inc.
1.000% Senior Notes due 2029			CUK29			New York Stock Exchange LLC

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrants are large accelerated filers, accelerated filers, non-accelerated filers, smaller reporting companies, or emerging growth companies. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filers			☑			Accelerated filers			☐			Non-accelerated filers			☐			Smaller reporting companies			☐			Emerging growth companies			☐

If emerging growth companies, indicate by check mark if the registrants have elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

At March 22, 2023, Carnival Corporation had outstanding 1,116,014,127 shares of Common Stock, $0.01 par value.						At March 22, 2023, Carnival plc had outstanding 186,806,263 Ordinary Shares $1.66 par value, one Special Voting Share, GBP 1.00 par value and 1,116,014,127 Trust Shares of beneficial interest in the P&O Princess Special Voting Trust.

CARNIVAL CORPORATION & PLC

TABLE OF CONTENTS

									Page
PART I - FINANCIAL INFORMATION
Item 1.			Financial Statements						4
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations						23
Item 3.			Quantitative and Qualitative Disclosures About Market Risk						29
Item 4.			Controls and Procedures						30
PART II - OTHER INFORMATION
Item 1.			Legal Proceedings						31
Item 1A.			Risk Factors						31
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds						31
Item 6.			Exhibits						32
SIGNATURES									34

PART I - FINANCIAL INFORMATION

CARNIVAL CORPORATION & PLC

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(UNAUDITED)

(in millions, except per share data)

			Three Months Ended February 28,
			2023						2022
Revenues
Passenger ticket			$	2,870					$	873
Onboard and other			1,563						750
			4,432						1,623
Operating Expenses
Commissions, transportation and other			655						251
Onboard and other			484						209
Payroll and related			582						506
Fuel			535						365
Food			311						136
Ship and other impairments			—						8
Other operating			743						557
Cruise and tour operating expenses			3,311						2,030
Selling and administrative			712						530
Depreciation and amortization			582						554
			4,604						3,114
Operating Income (Loss)			(172)						(1,491)
Nonoperating Income (Expense)
Interest income			56						3
Interest expense, net of capitalized interest			(539)						(368)
Other income (expense), net			(30)						(32)
			(514)						(397)
Income (Loss) Before Income Taxes			(686)						(1,888)
Income Tax Benefit (Expense), Net			(7)						(3)
Net Income (Loss)			$	(693)					$	(1,891)
Earnings Per Share
Basic			$	(0.55)					$	(1.66)
Diluted			$	(0.55)					$	(1.66)

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

CARNIVAL CORPORATION & PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(in millions)

			Three Months Ended February 28,
			2023						2022
Net Income (Loss)			$	(693)					$	(1,891)
Items Included in Other Comprehensive Income (Loss)
Change in foreign currency translation adjustment			(3)						13
Other			14						2
Other Comprehensive Income (Loss)			11						16
Total Comprehensive Income (Loss)			$	(682)					$	(1,876)

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

CARNIVAL CORPORATION & PLC

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in millions, except par values)

			February 28, 2023						November 30, 2022
ASSETS
Current Assets
Cash and cash equivalents			$	5,455					$	4,029
Restricted cash			15						1,988
Trade and other receivables, net			514						395
Inventories			448						428
Prepaid expenses and other			710						652
Total current assets			7,144						7,492
Property and Equipment, Net			39,359						38,687
Operating Lease Right-of-Use Assets			1,246						1,274
Goodwill			579						579
Other Intangibles			1,158						1,156
Other Assets			2,501						2,515
			$	51,985					$	51,703
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Short-term borrowings			$	200					$	200
Current portion of long-term debt			2,264						2,393
Current portion of operating lease liabilities			156						146
Accounts payable			1,022						1,050
Accrued liabilities and other			1,951						1,942
Customer deposits			5,495						4,874
Total current liabilities			11,088						10,605
Long-Term Debt			32,672						31,953
Long-Term Operating Lease Liabilities			1,148						1,189
Other Long-Term Liabilities			908						891
Contingencies and Commitments
Shareholders’ Equity
Carnival Corporation common stock, $0.01 par value; 1,960 shares authorized; 1,246 shares at 2023 and 1,244 shares at 2022 issued			12						12
Carnival plc ordinary shares, $1.66 par value; 217 shares at 2023 and 2022 issued			361						361
Additional paid-in capital			16,635						16,872
Retained earnings (accumulated deficit)			(434)						269
Accumulated other comprehensive income (loss) (“AOCI”)			(1,972)						(1,982)
Treasury stock, 130 shares at 2023 and 2022 of Carnival Corporation and 71 shares at 2023 and 72 shares at 2022 of Carnival plc, at cost			(8,433)						(8,468)
Total shareholders’ equity			6,170						7,065
			$	51,985					$	51,703

The accomp

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Cautionary Note Concerning Factors That May Affect Future Results

Some of the statements, estimates or projections contained in this document are “forward-looking statements” that involve risks, uncertainties and assumptions with respect to us, including some statements concerning future results, operations, outlooks, plans, goals, reputation, cash flows, liquidity and other events which have not yet occurred. These statements are intended to qualify for the safe harbors from liability provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts are statements that could be deemed forward-looking. These statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and the beliefs and assumptions of our management. We have tried, whenever possible, to identify these statements by using words like “will,” “may,” “could,” “should,” “would,” “believe,” “depends,” “expect,” “goal,” “aspiration,” “anticipate,” “forecast,” “project,” “future,” “intend,” “plan,” “estimate,” “target,” “indicate,” “outlook,” and similar expressions of future intent or the negative of such terms.

Forward-looking statements include those statements that relate to our outlook and financial position including, but not limited to, statements regarding:

•Pricing			•Adjusted net income (loss)
•Booking levels			•Adjusted EBITDA
•Occupancy			•Adjusted earnings per share
•Interest, tax and fuel expenses			•Adjusted free cash flow
•Currency exchange rates			•Net per diems
•Goodwill, ship and trademark fair values			•Net yields
•Liquidity and credit ratings			•Adjusted cruise costs per ALBD
•Estimates of ship depreciable lives and residual values			•Adjusted cruise costs excluding fuel per ALBD

Because forward-looking statements involve risks and uncertainties, there are many factors that could cause our actual results, performance or achievements to differ materially from those expressed or implied by our forward-looking statements. This note contains important cautionary statements of the known factors that we consider could materially affect the accuracy of our forward-looking statements and adversely affect our business, results of operations and financial position. Additionally, many of these risks and uncertainties are currently, and in the future may continue to be, amplified by our substantial debt balance as a result of the pause of our guest cruise operations. There may be additional risks that we consider immaterial or which are unknown. These factors include, but are not limited to, the following:

• Events and conditions around the world, including war and other military actions, such as the invasion of Ukraine, inflation, higher fuel prices, higher interest rates and other general concerns impacting the ability or desire of people to travel have led, and may in the future lead, to a decline in demand for cruises, impacting our operating costs and profitability.

• Pandemics have in the past and may in the future have a significant negative impact on our financial condition and operations.

• Incidents concerning our ships, guests or the cruise industry have in the past and may, in the future, negatively impact the satisfaction of our guests and crew and lead to reputational damage.

• Changes in and non-compliance with laws and regulations under which we operate, such as those relating to health, environment, safety and security, data privacy and protection, anti-corruption, economic sanctions, trade protection, labor and employment, and tax have in the past and may, in the future, lead to litigation, enforcement actions, fines, penalties and reputational damage.

• Factors associated with climate change, including evolving and increasing regulations, increasing global concern about climate change and the shift in climate conscious consumerism and stakeholder scrutiny, and increasing frequency and/or severity of adverse weather conditions could adversely affect our business.

• Inability to meet or achieve our sustainability related goals, aspirations, initiatives, and our public statements and disclosures regarding them, may expose us to risks that may adversely impact our business.

• Breaches in data security and lapses in data privacy as well as disruptions and other damages to our principal offices, information technology operations and system networks and failure to keep pace with developments in technology may adversely impact our business operations, the satisfaction of our guests and crew and may lead to reputational damage.

• The loss of key team members, our inability to recruit or retain qualified shoreside and shipboard team members and increased labor costs could have an adverse effect on our business and results of operations.

• Increases in fuel prices, changes in the types of fuel consumed and availability of fuel supply may adversely impact our scheduled itineraries and costs.

• We rely on supply chain vendors who are integral to the operations of our businesses. These vendors and service providers are also affected by COVID-19 and may be unable to deliver on their commitments which could negatively impact our business.

• Fluctuations in foreign currency exchange rates may adversely impact our financial results.

• Overcapacity and competition in the cruise and land-based vacation industry may negatively impact our cruise sales, pricing and destination options.

• Inability to implement our shipbuilding programs and ship repairs, maintenance and refurbishments may adversely impact our business operations and the satisfaction of our guests.

• Failure to successfully implement our business strategy following our resumption of guest cruise operations would negatively impact the occupancy levels and pricing of our cruises and could have a material adverse effect on our business. We require a significant amount of cash to service our debt and sustain our operations. Our ability to generate cash depends on many factors, including those beyond our control, and we may not be able to generate cash required to service our debt and sustain our operations.

The ordering of the risk factors set forth above is not intended to reflect our indication of priority or likelihood.

Forward-looking statements should not be relied upon as a prediction of actual results. Subject to any continuing obligations under applicable law or any relevant stock exchange rules, we expressly disclaim any obligation to disseminate, after the date of this document, any updates or revisions to any such forward-looking statements to reflect any change in expectations or events, conditions or circumstances on which any such statements are based.

Forward-looking and other statements in this document may also address our sustainability progress, plans and goals (including climate change and environmental-related matters). In addition, historical, current and forward-looking sustainability- and climate-related statements may be based on standards and tools for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions and predictions that are subject to change in the future and may not be generally shared.

New Accounting Pronouncements

Refer to Note 1 - “General, Accounting Pronouncements” of the consolidated financial statements for additional discussion regarding Accounting Pronouncements.

Critical Accounting Estimates

For a discussion of our critical accounting estimates, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that is included in the Form 10-K.

Seasonality

Our passenger ticket revenues are seasonal. Demand for cruises has been greatest during our third quarter, which includes the Northern Hemisphere summer months. This higher demand during the third quarter results in higher ticket prices and occupancy levels and, accordingly, the largest share of our operating income is typically earned during this period. The seasonality of our results also increases due to ships being taken out-of-service for maintenance, which we schedule during non-peak demand periods. In addition, substantially all of Holland America Princess Alaska Tours’ revenue and net income (loss) is generated from May through September in conjunction with Alaska’s cruise season.

Known Trends and Uncertainties

• We believe the increased cost of fuel and other related costs are reasonably likely to continue to impact our profitability in both the short and long-term.

• We believe inflation and higher interest rates are reasonably likely to continue to impact our profitability.

• We believe the increasing global focus on climate change, including the reduction of carbon emissions and new and evolving regulatory requirements, is reasonably likely to have a material negative impact on our future financial results. The full impact of climate change to our business is not yet known.

Statistical Information

			Three Months Ended February 28,
			2023						2022
Passenger Cruise Days (“PCDs”) (in millions) (a)			20.2						7.2
Available Lower Berth Days (“ALBDs”) (in millions) (b)			22.1						13.3
Occupancy percentage (c)			91		%				54		%
Passengers carried (in millions)			2.7						1.0
Fuel consumption in metric tons (in millions)			0.7						0.6
Fuel consumption in metric tons per thousand ALBDs			33.4						42.5
Fuel cost per metric ton consumed			$	730					$	648
Currencies (USD to 1)
AUD			$	0.69					$	0.72
CAD			$	0.74					$	0.79
EUR			$	1.07					$	1.13
GBP			$	1.22					$	1.35

Notes to Statistical Information

(a)PCD represents the number of cruise passengers on a voyage multiplied by the number of revenue-producing ship operating days for that voyage.

(b)ALBD is a standard measure of passenger capacity for the period that we use to approximate rate and capacity variances, based on consistently applied formulas that we use to perform analyses to determine the main non-capacity driven factors that cause our cruise revenues and expenses to vary. ALBDs assume that each cabin we offer for sale accommodates two passengers and is computed by multiplying passenger capacity by revenue-producing ship operating days in the period.

(c)Occupancy, in accordance with cruise industry practice, is calculated using a numerator of PCDs and a denominator of ALBDs, which assumes two passengers per cabin even though some cabins can accommodate three or more passengers. Percentages in excess of 100% indicate that on average more than two passengers occupied some cabins.

Results of Operations

Consolidated
			Three Months Ended February 28,
(in millions)			2023						2022						Change
Revenues
Passenger ticket			$	2,870					$	873					$	1,997
Onboard and other			1,563						750						812
			4,432						1,623						2,809
Operating Costs and Expenses
Commissions, transportation and other			655						251						404
Onboard and other			484						209						275
Payroll and related			582						506						77
Fuel			535						365						170
Food			311						136						175
Ship and other impairments			—						8						(8)
Other operating			743						557						187
Cruise and tour operating expenses			3,311						2,030						1,280
Selling and administrative			712						530						182
Depreciation and amortization			582						554						28
			4,604						3,114						1,490
Operating Income (Loss)			(172)						(1,491)						1,320
Nonoperating Income (Expense)
Interest income			56						3						52
Interest expense, net of capitalized interest			(539)						(368)						(171)
Other income (expense), net			(30)						(32)						2
			(514)						(397)						(117)
Income (Loss) Before Income Taxes			$	(686)					$	(1,888)					$	1,203

NAA
			Three Months Ended February 28,
(in millions)			2023						2022						Change
Revenues
Passenger ticket			$	1,892					$	586					$	1,306
Onboard and other			1,187						540						647
			3,078						1,126						1,953
Operating Costs and Expenses			2,189						1,288						901
Selling and administrative			440						344						96
Depreciation and amortization			363						334						29
			2,993						1,966						1,027
Operating Income (Loss)			$	86					$	(840)					$	926

Europe
			Three Months Ended February 28,
(in millions)			2023						2022						Change
Revenues
Passenger ticket			$	992					$	341					$	650
Onboard and other			302						116						187
			1,294						457						837
Operating Costs and Expenses			1,078						698						380
Selling and administrative			213						176						37
Depreciation and amortization			169						181						(12)
			1,460						1,055						406
Operating Income (Loss)			$	(166)					$	(598)					$	431

The effects of the pause in guest cruise operations in March 2020 and subsequent resumption of our guest cruise operations, inflation, higher fuel prices, higher interest rates and fluctuations in foreign currency rates are collectively having a material negative impact on all aspects of our business, including our results of operations, liquidity and financial position. We have a substantial debt balance and require a significant amount of cash to service our debt and sustain our operations. Our ability to generate cash will be affected by our ability to successfully implement our business strategy, which includes increasing our occupancy levels and pricing of our cruises, as well as general macroeconomic, financial, geopolitical, competitive, regulatory and other factors beyond our control. The full extent of these impacts is uncertain and may be amplified by our substantial debt balance.

Three Months Ended February 28, 2023 (“2023”) Compared to Three Months Ended February 28, 2022 (“2022”)

Revenues

Consolidated

Cruise passenger ticket revenues made up 65% of our total revenues in 2023 while onboard and other revenues made up 35%. Revenues in 2023 increased by $2.8 billion to $4.4 billion from $1.6 billion in 2022 due to the ongoing resumption of guest cruise operations, including the significant increase of ships in service and higher occupancy. As of February 28, 2023, 96% of our capacity was serving guests, compared to 71% as of February 28, 2022. ALBDs increased to 22.1 million in 2023 as compared to 13.3 million in 2022. Occupancy for 2023 was 91% compared to 54% in 2022.

NAA Segment

Cruise passenger ticket revenues made up 61% of our NAA segment’s total revenues in 2023 while onboard and other cruise revenues made up 39%. NAA segment revenues in 2023 increased by $2.0 billion to $3.1 billion from $1.1 billion in 2022 due to the ongoing resumption of guest cruise operations, including the significant increase of ships in service and higher occupancy. Our NAA segment’s full fleet was serving guests as of February 28, 2023, compared to 69% as of February 28, 2022. ALBDs increased to 13.9 million in 2023 as compared to 8.7 million in 2022. Occupancy for 2023 was 98% compared to 59% in 2022.

Europe Segment

Cruise passenger ticket revenues made up 77% of our Europe segment’s total revenues in 2023 while onboard and other cruise revenues made up 23%. Europe segment revenues in 2023 increased by $0.8 billion to $1.3 billion from $0.5 billion in 2022 due to the ongoing resumption of guest cruise operations, including the significant increase of ships in service and higher occupancy. Our Europe segment had 93% of its capacity serving guests as of February 28, 2023, compared to 73% as of February 28, 2022. ALBDs increased to 8.2 million in 2023 as compared to 4.6 million in 2022. Occupancy for 2023 was 80% compared to 45% in 2022.

Operating Cost and Expenses

Consolidated

Operating costs and expenses increased by $1.3 billion to $3.3 billion in 2023 from $2.0 billion in 2022. These increases were driven by our resumption of guest cruise operations and an increase in ships in service.

Fuel costs increased by $170 million to $535 million in 2023 from $365 million in 2022. $110 million of this increase was driven by higher fuel consumption of 0.2 million metric tons, due to the resumption of guest cruise operations, and $60 million was driven by a combination of increases in fuel prices and changes in fuel mix of $81 per metric ton consumed in 2023 compared to 2022.

Selling and administrative expenses increased by $182 million to $712 million in 2023 from $530 million in 2022. The increase was caused by increased administrative expenses and advertising costs incurred as part of our resumption of guest cruise operations.

The drivers in changes in costs and expenses for our NAA and Europe segments are the same as those described for our consolidated results.

Nonoperating Income (Expense)

Interest expense, net of capitalized interest, increased by $171 million to $539 million in 2023 from $368 million in 2022. The increase was caused by a higher average interest rate and a higher average debt balance in 2023 compared to 2022.

Liquidity, Financial Condition and Capital Resources

As of February 28, 2023, we had $8.1 billion of liquidity including cash and cash equivalents and borrowings available under our Revolving Facility. We will continue to pursue various opportunities to refinance future debt maturities and/or to extend the maturity dates associated with our existing indebtedness and obtain relevant financial covenant amendments or waivers, if needed.

We had a working capital deficit of $3.9 billion as of February 28, 2023 compared to working capital deficit of $3.1 billion as of November 30, 2022. The increase in working capital deficit was caused by an increase in customer deposits and an overall decrease in cash and cash equivalents and restricted cash. We operate with a substantial working capital deficit. This deficit is mainly attributable to the fact that, under our business model, substantially all of our passenger ticket receipts are collected in advance of the applicable sailing date. These advance passenger receipts generally remain a current liability until the sailing date. The cash generated from these advance receipts is used interchangeably with cash on hand from other sources, such as our borrowings and other cash from operations. The cash received as advanced receipts can be used to fund operating expenses, pay down our debt, make long-term investments or any other use of cash. Included within our working capital are $5.5 billion and $4.9 billion of customer deposits as of February 28, 2023 and November 30, 2022, respectively. We have agreements with a number of credit card processors that transact customer deposits related to our cruise vacations. Certain of these agreements allow the credit card processors to request, under certain circumstances, that we provide a reserve fund in cash. In addition, we have a relatively low level of accounts receivable and limited investment in inventories.

Refer to Note 1 - “General, Liquidity and Management’s Plans” of the consolidated financial statements for additional discussion regarding our liquidity.

Sources and Uses of Cash

Operating Activities

Our business provided $0.4 billion of net cash flows in operating activities during the three months ended February 28, 2023, an increase of $1.6 billion, compared to $1.2 billion used for the same period in 2022. This was driven by a decrease in the net loss compared to the same period in 2022 and an increase in customer deposits.

Investing Activities

During the three months ended February 28, 2023, net cash used in investing activities was $1.0 billion. This was driven by:

• Capital expenditures of $0.8 billion for our ongoing new shipbuilding program

• Capital expenditures of $243 million for ship improvements and replacements, information technology and buildings and improvements

• Proceeds from sale of ships of $23 million

During the three months ended February 28, 2022, net cash used in investing activities was $3.0 billion. This was driven by:

• Capital expenditures of $2.5 billion for our ongoing new shipbuilding program

• Capital expenditures of $221 million for ship improvements and replacements, information technology and buildings and improvements

• Proceeds from sale of ships and other of $18 million

• Purchases of short-term investments of $315 million

Financing Activities

During the three months ended February 28, 2023, net cash provided by financing activities of $0.1 billion was caused by:

• Issuances of $0.8 billion of long-term debt

• Repayments of $0.7 billion of long-term debt

• Payments of $40 million related to debt issuance costs

During the three months ended February 28, 2022, net cash provided by financing activities of $1.7 billion was caused by:

• Issuances of $2.3 billion of long-term debt

• Repayments of $503 million of long-term debt

• Payments of $85 million related to debt issuance costs

• Net repayments of short-term borrowings of $48 million

• Purchases of $23 million of Carnival plc ordinary shares and issuances of $27 million of Carnival Corporation common stock under our Stock Swap Program

Funding Sources

As of February 28, 2023, we had $8.1 billion of liquidity including $5.5 billion of cash and cash equivalents and $2.6 billion of borrowings available under our Revolving Facility, which matures in 2024. In February 2023, Carnival Holdings II entered into the New Revolving Facility, which may be utilized beginning in August 2024, at which date it will replace our existing Revolving Facility. Refer to Note 3 - “Debt” of the consolidated financial statements for additional discussion. In addition, we had $3.2 billion of undrawn export credit facilities to fund ship deliveries planned through 2025. We plan to use existing liquidity and future cash flows from operations to fund our cash requirements including capital expenditures not funded by our export credit facilities. We seek to manage our credit risk exposures, including counterparty nonperformance associated with our cash and cash equivalents, and future financing facilities by conducting business with well-established financial institutions, and export credit agencies and diversifying our counterparties.

(in billions)						2023						2024						2025
Future export credit facilities at February 28, 2023						$	316					$	2,165					$	716

Our export credit facilities contain various financial covenants as described in Note 3 - “Debt”. At February 28, 2023, we were in compliance with the applicable covenants under our debt agreements.

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 consolidated financial statements.

For a discussion of our hedging strategies and market risks, see the discussion below and Note 10 - “Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks” in our consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations within our Form 10-K.

Interest Rate Risks

The composition of our debt, interest rate swaps and cross currency swaps, was as follows:

			February 28, 2023
Fixed rate			59		%
EUR fixed rate			16		%
Floating rate			9		%
EUR floating rate			15		%
GBP floating rate			1		%

A. Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported, within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in our reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

Our President, Chief Executive Officer and Chief Climate Officer and our Chief Financial Officer and Chief Accounting Officer have evaluated our disclosure controls and procedures and have concluded, as of February 28, 2023, that they are effective at a reasonable level of assurance, as described above.

B. Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended February 28, 2023 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings**.**

The legal proceedings described in Note 4 – “Contingencies and Commitments” of our consolidated financial statements, including those described under “COVID-19 Actions” and “Regulatory or Governmental Inquiries and Investigations,” are incorporated in this “Legal Proceedings” section by reference. Additionally, SEC rules require disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that we believe may exceed $1 million.

On June 20, 2022, Princess Cruises notified the Australian Maritime Safety Authorization (“AMSA”) and the flag state, Bermuda, regarding approximately six cubic meters of comminuted food waste (liquid biodigester effluent) inadvertently discharged by Coral Princess inside the Great Barrier Reef Marine Park. On June 23, 2022, the UK P&I Club N.V. provided a letter of undertaking for approximately $1.9 million (being the estimated maximum combined penalty). We believe the ultimate outcome will not have a material impact on our consolidated financial statements.

The risk factors in this Form 10-Q below should be carefully considered, including the risk factors discussed in “Risk Factors” and other risks discussed in our Form 10-K. These risks could materially and adversely affect our results, operations, outlooks, plans, goals, growth, reputation, cash flows, liquidity, and stock price. Our business also could be affected by risks that we are not presently aware of or that we currently consider immaterial to our operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds**.**

**A.**Stock Swap Program

We have a program that allows us to realize a net cash benefit when Carnival Corporation common stock is trading at a premium to the price of Carnival plc ordinary shares. Under the Stock Swap Program, we may elect to offer and sell shares of Carnival Corporation common stock at prevailing market prices in ordinary brokers’ transactions and repurchase an equivalent number of Carnival plc ordinary shares in the UK market.

Under the Stock Swap Program effective as of June 2021, the Board of Directors authorized the sale of up to $500 million shares of Carnival Corporation common stock in the U.S. market and the purchase of Carnival plc ordinary shares on at least an equivalent basis.

We may in the future implement a program to allow us to obtain a net cash benefit when Carnival plc ordinary shares are trading at a premium to the price of Carnival Corporation common stock.

Any sales of Carnival Corporation common stock and Carnival plc ordinary shares have been or will be registered under the Securities Act of 1933, as amended. During the three months ended February 28, 2023, there were no sales or repurchases under the Stock Swap Program. Since the beginning of the Stock Swap Program, first authorized in June 2021, we have sold 14.9 million shares of Carnival Corporation common stock and repurchased the same amount of Carnival plc ordinary shares, resulting in net proceeds of $27 million. No ordinary shares of Carnival plc were purchased outside of publicly announced plans or programs.

B. Repurchases

No shares of Carnival Corporation common stock and Carnival plc ordinary shares were purchased outside of publicly announced plans or programs.

INDEX TO EXHIBITS
												Incorporated by Reference																		Filed/ Furnished Herewith
Exhibit Number						Exhibit Description						Form						Exhibit						Filing Date
Articles of incorporation and by-laws
3.1						Third Amended and Restated Articles of Incorporation of Carnival Corporation.						8-K						3.1						4/17/2003
3.2						Third Amended and Restated By-Laws of Carnival Corporation.						8-K						3.1						4/20/2009
3.3						Articles of Association of Carnival plc.						8-K						3.3						4/20/2009
Material Contracts
10.1						Form of 2022 Performance-Based Restricted Stock Unit Agreement for the Carnival Corporation 2020 Stock Plan.																								X
10.2						Form of 2022 Performance-Based Restricted Share Unit Grant Agreement for the Carnival plc 2014 Employee Share Plan.																								X
10.3						Form of 2022 Management Incentive Plan Tied Restricted Stock Unit Agreement for the Carnival Corporation 2020 Stock Plan.																								X
10.4						Form of 2022 Management Incentive Plan Tied Restricted Share Unit Grant Agreement for the Carnival plc 2014 Employee Share Plan.																								X
10.5						Facilities Agreement, dated as of February 28, 2023, among Carnival Holdings (Bermuda) II Limited, as borrower, Carnival Corporation, Carnival plc, the other guarantors party thereto, the lender parties thereto and J.P. Morgan SE, as facilities agent.																								X
Rule 13a-14(a)/15d-14(a) certifications
31.1						Certification of President, Chief Executive Officer and Chief Climate Officer of Carnival Corporation pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.																								X
31.2						Certification of Chief Financial Officer and Chief Accounting Officer of Carnival Corporation pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.																								X
31.3						Certification of President, Chief Executive Officer and Chief Climate Officer of Carnival plc pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.																								X
31.4						Certification of Chief Financial Officer and Chief Accounting Officer of Carnival plc pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.																								X
Section 1350 certifications
32.1*						Certification of President, Chief Executive Officer and Chief Climate Officer of Carnival Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.																								X
32.2*						Certification of Chief Financial Officer and Chief Accounting Officer of Carnival Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.																								X

INDEX TO EXHIBITS
												Incorporated by Reference																		Filed/ Furnished Herewith
Exhibit Number						Exhibit Description						Form						Exhibit						Filing Date
32.3*						Certification of President, Chief Executive Officer and Chief Climate Officer of Carnival plc pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.																								X
32.4*						Certification of Chief Financial Officer and Chief Accounting Officer of Carnival plc pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.																								X
Interactive Data File
101						The consolidated financial statements from Carnival Corporation & plc’s joint Quarterly Report on Form 10-Q for the quarter ended February 28, 2023, as filed with the Securities and Exchange Commission on March 29, 2023, formatted in Inline XBRL, are as follows:
						(i) the Consolidated Statements of Income (Loss) for the three months ended February 28, 2023 and 2022;																								X
						(ii) the Consolidated Statements of Comprehensive Income (Loss) for the three months ended February 28, 2023 and 2022;																								X
						(iii) the Consolidated Balance Sheets at February 28, 2023 and November 30, 2022;																								X
						(iv) the Consolidated Statements of Cash Flows for the three months ended February 28, 2023 and 2022;																								X
						(v) the Consolidated Statements of Shareholders’ Equity for the three months ended February 28, 2023 and 2022;																								X
						(vi) the notes to the consolidated financial statements, tagged in summary and detail.																								X
104						The cover page from Carnival Corporation & plc’s joint Quarterly Report on Form 10-Q for the quarter ended February 28, 2023, as filed with the Securities and Exchange Commission on March 29, 2023, formatted in Inline XBRL (included as Exhibit 101).

*			These items are furnished and not filed.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			CARNIVAL CORPORATION									CARNIVAL PLC
By:			/s/ Josh Weinstein						By:			/s/ Josh Weinstein
			Josh Weinstein									Josh Weinstein
			President, Chief Executive Officer and Chief Climate Officer									President, Chief Executive Officer and Chief Climate Officer
By:			/s/ David Bernstein						By:			/s/ David Bernstein
			David Bernstein									David Bernstein
			Chief Financial Officer and Chief Accounting Officer									Chief Financial Officer and Chief Accounting Officer
			Date: March 29, 2023									Date: March 29, 2023