Item 1. Financial Statements.

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Item 1. Financial Statements.

CARNIVAL CORPORATION & PLC

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(UNAUDITED)

(in millions, except per share data)


	Three Months Ended May 31,				Six Months Ended May 31,
	2024		2023		2024		2023
Revenues
Passenger ticket	$	3,754	$	3,141	$	7,370	$	6,011
Onboard and other	2,027		1,770		3,817		3,332
	5,781		4,911		11,187		9,343
Operating Expenses
Commissions, transportation and other	732		619		1,552		1,274
Onboard and other	628		549		1,178		1,033
Payroll and related	614		601		1,237		1,183
Fuel	525		489		1,030		1,024
Food	360		325		706		636

Other operating	938		875		1,800		1,619
Cruise and tour operating expenses	3,798		3,457		7,502		6,768
Selling and administrative	789		736		1,603		1,448
Depreciation and amortization	634		597		1,247		1,179

	5,221		4,791		10,352		9,394
Operating Income (Loss)	560		120		836		(52)
Nonoperating Income (Expense)
Interest income	25		69		58		124
Interest expense, net of capitalized interest	(450)		(542)		(921)		(1,082)
Debt extinguishment and modification costs	(33)		(31)		(66)		(31)
Other income (expense), net	(7)		(17)		(25)		(47)
	(464)		(522)		(953)		(1,036)
Income (Loss) Before Income Taxes	96		(402)		(118)		(1,087)
Income Tax Benefit (Expense), Net	(5)		(5)		(5)		(13)
Net Income (Loss)	$	92	$	(407)	$	(123)	$	(1,100)
Earnings Per Share
Basic	$	0.07	$	(0.32)	$	(0.10)	$	(0.87)
Diluted	$	0.07	$	(0.32)	$	(0.10)	$	(0.87)

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

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CARNIVAL CORPORATION & PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(in millions)


	Three Months Ended May 31,				Six Months Ended May 31,
	2024		2023		2024		2023
Net Income (Loss)	$	92	$	(407)	$	(123)	$	(1,100)
Items Included in Other Comprehensive Income (Loss)
Change in foreign currency translation adjustment	7		102		7		99
Other	11		(33)		12		(19)
Other Comprehensive Income (Loss)	18		69		19		79
Total Comprehensive Income (Loss)	$	110	$	(338)	$	(104)	$	(1,021)

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

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CARNIVAL CORPORATION & PLC

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in millions, except par values)


	May 31, 2024		November 30, 2023
ASSETS
Current Assets
Cash and cash equivalents	$	1,646	$	2,415
Trade and other receivables, net	494		556
Inventories	509		528
Prepaid expenses and other	1,118		1,767
Total current assets	3,768		5,266
Property and Equipment, Net	42,105		40,116
Operating Lease Right-of-Use Assets, Net	1,282		1,265
Goodwill	579		579
Other Intangibles	1,167		1,169
Other Assets	702		725
	$	49,603	$	49,120
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities

Current portion of long-term debt	$	2,181	$	2,089
Current portion of operating lease liabilities	144		149
Accounts payable	1,063		1,168
Accrued liabilities and other	2,114		2,003
Customer deposits	7,883		6,072
Total current liabilities	13,385		11,481
Long-Term Debt	27,154		28,483
Long-Term Operating Lease Liabilities	1,174		1,170
Other Long-Term Liabilities	1,075		1,105
Contingencies and Commitments
Shareholders’ Equity
Carnival Corporation common stock, $0.01 par value; 1,960 shares authorized; 1,253 shares issued at 2024 and 1,250 shares issued at 2023	13		12
Carnival plc ordinary shares, $1.66 par value; 217 shares issued at 2024 and 2023	361		361
Additional paid-in capital	16,701		16,712
Retained earnings	62		185
Accumulated other comprehensive income (loss) (“AOCI”)	(1,919)		(1,939)
Treasury stock, 130 shares at 2024 and 2023 of Carnival Corporation and 73 shares at 2024 and 2023 of Carnival plc, at cost	(8,404)		(8,449)
Total shareholders’ equity	6,814		6,882
	$	49,603	$	49,120

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

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CARNIVAL CORPORATION & PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in millions)


	Six Months Ended May 31,
	2024		2023
OPERATING ACTIVITIES
Net income (loss)	$	(123)	$	(1,100)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation and amortization	1,247		1,179

(Gain) loss on debt extinguishment	63		31
(Income) loss from equity-method investments	7		27
Share-based compensation	30		31
Amortization of discounts and debt issue costs	72		85
Noncash lease expense	67		72

Other	55		(9)
	1,417		316
Changes in operating assets and liabilities
Receivables	38		(55)
Inventories	14		(6)
Prepaid expenses and other assets	449		(805)
Accounts payable	(52)		(23)
Accrued liabilities and other	(30)		69
Customer deposits	1,971		2,029
Net cash provided by (used in) operating activities	3,807		1,525
INVESTING ACTIVITIES
Purchases of property and equipment	(3,457)		(1,772)
Proceeds from sales of ships	—		255



Other	72		8
Net cash provided by (used in) investing activities	(3,384)		(1,509)
FINANCING ACTIVITIES
Repayments of short-term borrowings	—		(200)
Principal repayments of long-term debt	(4,072)		(2,294)
Debt issuance costs	(117)		(94)
Debt extinguishment costs	(41)		—
Proceeds from issuance of long-term debt	3,048		1,016
Proceeds from issuance of common stock	—		5
Proceeds from issuance of common stock under the Stock Swap Program	—		22
Purchase of treasury stock under the Stock Swap Program	—		(20)
Other	(1)		13
Net cash provided by (used in) financing activities	(1,183)		(1,552)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(6)		6
Net increase (decrease) in cash, cash equivalents and restricted cash	(767)		(1,530)
Cash, cash equivalents and restricted cash at beginning of period	2,436		6,037
Cash, cash equivalents and restricted cash at end of period	$	1,669	$	4,507

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

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CARNIVAL CORPORATION & PLC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

(in millions)


	Three Months Ended
	Common stock		Ordinary shares		Additional paid-in capital		Retained earnings (accumulated deficit)		AOCI		Treasury stock		Total shareholders’ equity
At February 29, 2024	$	13	$	361	$	16,679	$	(29)	$	(1,938)	$	(8,404)	$	6,682
Net income (loss)	—		—		—		92		—		—		92
Other comprehensive income (loss)	—		—		—		—		18		—		18




Share-based compensation and other	—		—		22		—		—		—		22
At May 31, 2024	$	13	$	361	$	16,701	$	62	$	(1,919)	$	(8,404)	$	6,814

At February 28, 2023	$	12	$	361	$	16,635	$	(434)	$	(1,972)	$	(8,433)	$	6,170

Net income (loss)	—		—		—		(407)		—		—		(407)
Other comprehensive income (loss)	—		—		—		—		69		—		69
Issuances of common stock, net	—		—		5		—		—		—		5
Conversion of Convertible Notes	—		—		3		—		—		—		3
Purchases and issuances under the Stock Swap program, net	—		—		22		—		—		(20)		2
Issuance of treasury shares for vested share-based awards	—		—		(5)		—		—		5		—
Share-based compensation and other	—		—		24		—		—		(1)		23
At May 31, 2023	$	12	$	361	$	16,684	$	(841)	$	(1,903)	$	(8,449)	$	5,865

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	Six Months Ended
	Common stock		Ordinary shares		Additional paid-in capital		Retained earnings (accumulated deficit)		AOCI		Treasury stock		Total shareholders’ equity
At November 30, 2023	$	12	$	361	$	16,712	$	185	$	(1,939)	$	(8,449)	$	6,882
Net income (loss)	—		—		—		(123)		—		—		(123)
Other comprehensive income (loss)	—		—		—		—		19		—		19



Issuance of treasury shares for vested share-based awards	—		—		(47)		—		—		47		—
Share-based compensation and other	—		—		36		—		—		(2)		35
At May 31, 2024	$	13	$	361	$	16,701	$	62	$	(1,919)	$	(8,404)	$	6,814

At November 30, 2022	$	12	$	361	$	16,872	$	269	$	(1,982)	$	(8,468)	$	7,065
Change in accounting principle (a)	—		—		(229)		(10)		—		—		(239)
Net income (loss)	—		—		—		(1,100)		—		—		(1,100)
Other comprehensive income (loss)	—		—		—		—		79		—		79
Issuances of common stock, net	—		—		5		—		—		—		5
Conversion of Convertible Notes	—		—		3		—		—		—		3
Purchases and issuances under the Stock Swap program, net	—		—		22		—		—		(20)		2
Issuance of treasury shares for vested share-based awards	—		—		(41)		—		—		41		—
Share-based compensation and other	—		—		52		—		—		(2)		50
At May 31, 2023	$	12	$	361	$	16,684	$	(841)	$	(1,903)	$	(8,449)	$	5,865

(a)We adopted the provisions of Debt - Debt with Conversion and Other Options and Derivative and Hedging - Contracts in Entity’s Own Equity on December 1, 2022.

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

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CARNIVAL CORPORATION & PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 – General

The consolidated financial statements include the accounts of Carnival Corporation and Carnival plc and their respective subsidiaries. Together with their consolidated subsidiaries, they are referred to collectively in these consolidated financial statements and elsewhere in this joint Quarterly Report on Form 10-Q as “Carnival Corporation & plc,” “our,” “us” and “we.”

Basis of Presentation

The accompanying consolidated financial statements are unaudited and, in the opinion of our management, contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted as permitted by such Securities and Exchange Commission rules and regulations. The preparation of our interim consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported and disclosed. We have made reasonable estimates and judgments of such items within our financial statements and there may be changes to those estimates in future periods. Our operations are seasonal and results for interim periods are not necessarily indicative of the results for the entire year.

Our interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in the Carnival Corporation & plc 2023 joint Annual Report on Form 10-K (“Form 10-K”) filed with the U.S. Securities and Exchange Commission (“SEC”) on January 26, 2024.

For 2023, we reclassified $11 million from restricted cash to prepaid expenses and other in the Consolidated Balance Sheets and $94 million from other financing activities to debt issuance costs in the Consolidated Statements of Cash Flows to conform to the current year presentation.

Accounting Pronouncements

In September 2022, the Financial Accounting Standards Board (“FASB”) issued guidance, Liabilities-Supplier Finance Programs - Disclosure of Supplier Finance Program Obligations. This guidance requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. On December 1, 2023, we adopted this guidance using the retrospective method for each period presented. The adoption of this guidance had no impact on our consolidated financial statements and disclosures.

In November 2023, the FASB issued guidance, Improvements to Reportable Segment Disclosures. This guidance requires annual and interim disclosure of significant segment expenses that are provided to the chief operating decision maker (“CODM”) as well as interim disclosures for all reportable segments’ profit or loss and assets. This guidance also requires disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources. This guidance is required to be adopted by us in 2025. We are currently evaluating the impact this guidance will have on our consolidated financial statements and disclosures.

In December 2023, the FASB issued guidance, Improvements to Income Tax Disclosures. This guidance requires disaggregation of rate reconciliation categories and income taxes paid by jurisdiction, as well as other amendments relating to income tax disclosures. This guidance is required to be adopted by us in 2026. We are currently evaluating the impact this guidance will have on our consolidated financial statements and disclosures.

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Regulatory Updates

We became subject to the EU Emissions Trading Scheme (“ETS”) on January 1, 2024, which includes a three-year phase-in period. The ETS regulates emissions through a “cap and trade” principle, where a cap is set on the total amount of certain emissions that can be emitted and requires us to procure emission allowances for certain emissions inside EU waters (as defined in the ETS). We record emission allowances at cost within prepaid expenses and other or other assets, based on the timing of when they are required to be surrendered. We record expense for emissions inside EU waters within fuel expense in the period incurred. As of May 31, 2024, the cost of allowances purchased was $49 million. For the three and six months ended May 31, 2024, expense for ETS emissions were not material.

NOTE 2 – Revenue and Expense Recognition

Guest cruise deposits and advance onboard purchases are initially included in customer deposits when received. Customer deposits are subsequently recognized as cruise revenues, together with revenues from onboard and other activities, and all associated direct costs and expenses of a voyage are recognized as cruise costs and expenses, upon completion of voyages with durations of ten nights or less and on a pro rata basis for voyages in excess of ten nights. The impact of recognizing these shorter duration cruise revenues and costs and expenses on a completed voyage basis versus on a pro rata basis is not material. Certain of our product offerings are bundled and we allocate the value of the bundled services and goods between passenger ticket revenues and onboard and other revenues based upon the estimated standalone selling prices of those goods and services. Guest cancellation fees, when applicable, are recognized in passenger ticket revenues at the time of cancellation.

Our sales to guests of air and other transportation to and from airports near the home ports of our ships are included in passenger ticket revenues, and the related costs of these services are included in prepaid expenses and other when paid prior to the start of a voyage and are subsequently recognized in transportation costs at the time of revenue recognition. The cost of prepaid air and other transportation costs at May 31, 2024 and November 30, 2023 were $282 million and $253 million. The proceeds that we collect from the sales of third-party shore excursions are included in onboard and other revenues and the related costs are included in onboard and other costs. The amounts collected on behalf of our onboard concessionaires, net of the amounts remitted to them, are included in onboard and other revenues as concession revenues. All of these amounts are recognized on a completed voyage or pro rata basis as discussed above.

Passenger ticket revenues include fees, taxes and charges collected by us from our guests. The fees, taxes and charges that vary with guest head counts are expensed in commissions, transportation and other costs when the corresponding revenues are recognized. The remaining portion of fees, taxes and charges are generally expensed in other operating expenses when the corresponding revenues are recognized.

Revenues and expenses from our hotel and transportation operations, which are included in our Tour and Other segment, are recognized at the time the services are performed.

Customer Deposits

Our payment terms generally require an initial deposit to confirm a reservation, with the balance due prior to the voyage. Cash received from guests in advance of the cruise is recorded in customer deposits and in other long-term liabilities on our Consolidated Balance Sheets. These amounts include refundable deposits. In certain situations, we have provided flexibility to guests by allowing guests to rebook at a future date, receive future cruise credits (“FCCs”) or elect to receive refunds in cash. We record a liability for FCCs to the extent we have received and not refunded cash from guests for cancelled bookings. We had total customer deposits of $8.3 billion as of May 31, 2024 and $6.4 billion as of November 30, 2023, which includes approximately $60 million of unredeemed FCCs as of May 31, 2024, of which approximately $36 million are refundable. At November 30, 2023, we had approximately $134 million of unredeemed FCCs, of which $111 million were refundable. During the six months ended May 31, 2024 and 2023, we recognized revenues of $4.7 billion and $3.6 billion related to our customer deposits as of November 30, 2023 and 2022. Our customer deposits balance changes due to the seasonal nature of cash collections, which typically results from higher ticket prices and occupancy levels during the third quarter, the recognition of revenue, refunds of customer deposits and foreign currency changes.

Trade and Other Receivables

Although we generally require full payment from our customers prior to or concurrently with their cruise, we grant credit terms to a relatively small portion of our revenue source. We have receivables from credit card merchants and travel agents for cruise

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ticket purchases and onboard revenue. These receivables are included within trade and other receivables, net and are less allowances for expected credit losses.

Contract Costs

We recognize incremental travel agent commissions and credit and debit card fees incurred as a result of obtaining the ticket contract as assets when paid prior to the start of a voyage. We record these amounts within prepaid expenses and other and subsequently recognize these amounts as commissions, transportation and other at the time of revenue recognition or at the time of voyage cancellation. We had incremental costs of obtaining contracts with customers recognized as assets of $434 million as of May 31, 2024 and $294 million as of November 30, 2023.

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NOTE 3 – Debt


			May 31,		November 30,
(in millions)	Maturity	Rate (a) (b)	2024		2023
Secured Subsidiary Guaranteed
Notes
Notes	Jun 2027	7.9%	$	192	$	192
Notes (c)	Aug 2027	9.9%	—		623
Notes	Aug 2028	4.0%	2,406		2,406
Notes	Aug 2029	7.0%	500		500
Loans
EUR floating rate (c)	Jun 2025	EURIBOR + 3.8%	—		851
Floating rate	Aug 2027 - Oct 2028	SOFR + 2.8% (d)	2,749		3,567
Total Secured Subsidiary Guaranteed			5,847		8,138
Senior Priority Subsidiary Guaranteed
Notes	May 2028	10.4%	2,030		2,030
Unsecured Subsidiary Guaranteed


Notes
Convertible Notes	Oct 2024	5.8%	426		426
Notes	Mar 2026	7.6%	1,351		1,351
EUR Notes (c)	Mar 2026	7.6%	—		550
Notes (c)	Mar 2027	5.8%	2,725		3,100
Convertible Notes	Dec 2027	5.8%	1,131		1,131
Notes	May 2029	6.0%	2,000		2,000
EUR Notes	Jan 2030	5.8%	540		—
Notes	Jun 2030	10.5%	1,000		1,000
Loans
EUR floating rate (e)	Apr 2025 - Mar 2026	EURIBOR + 2.4 - 3.3%	576		678
Export Credit Facilities
Floating rate	Dec 2031	SOFR + 1.2% (f)	549		583
Fixed rate	Aug 2027 - Dec 2032	2.4 - 3.4%	2,563		2,756
EUR floating rate	Mar 2025 - Nov 2034	EURIBOR + 0.2 - 0.8%	2,835		3,086
EUR fixed rate	Feb 2031 - Jul 2037	1.1 - 4.0%	5,734		3,652
Total Unsecured Subsidiary Guaranteed			21,429		20,312
Unsecured Notes (No Subsidiary Guarantee)
Notes	Jan 2028	6.7%	200		200
EUR Notes	Oct 2029	1.0%	648		659
Total Unsecured Notes (No Subsidiary Guarantee)			848		859
Total Debt			30,154		31,339
Less: unamortized debt issuance costs and discounts			(820)		(768)
Total Debt, net of unamortized debt issuance costs and discounts			29,334		30,572

Less: current portion of long-term debt			(2,181)		(2,089)
Long-Term Debt			$	27,154	$	28,483

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(a)The reference rates, together with any applicable credit adjustment spread, for substantially all of our variable debt have 0.0% to 0.75% floors.

(b)The above debt table excludes the impact of any outstanding derivative contracts.

(c)See “Debt Prepayments” below.

(d)As part of the repricing of our senior secured term loans, we amended the loans’ margin from 3.0% – 3.4% (inclusive of credit adjustment spread) to 2.8%. See “Repricing of senior secured term loans” below.

(e)The maturity of the principal amount of $216 million was extended from April 2024 to April 2025.

(f)Includes applicable credit adjustment spread.

Carnival Corporation and/or Carnival plc is the primary obligor of all our outstanding debt excluding the following:

$2.0 billion of senior priority notes (the “2028 Senior Priority Notes”), issued by Carnival Holdings (Bermuda) Limited (“Carnival Holdings”), a subsidiary of Carnival Corporation
$0.4 billion under a term loan facility of Costa Crociere S.p.A. (“Costa”), a subsidiary of Carnival plc
$0.9 billion under an export credit facility of Sun Princess Limited, a subsidiary of Carnival Corporation
$0.1 billion under an export credit facility of Sun Princess II Limited, a subsidiary of Carnival Corporation

In addition, Carnival Holdings (Bermuda) II Limited (“Carnival Holdings II”) will be the primary obligor under a $2.5 billion multi-currency revolving facility (“New Revolving Facility”) when the New Revolving Facility replaces our Revolving Facility upon its maturity in August 2024. See “Revolving Facilities.”

All of our outstanding debt is issued or guaranteed by substantially the same entities with the exception of the following:

Up to $250 million of the Costa term loan facility, which is guaranteed by certain subsidiaries of Carnival plc and Costa that do not guarantee our other outstanding debt
Our 2028 Senior Priority Notes, issued by Carnival Holdings, which does not guarantee our other outstanding debt
The export credit facilities of Sun Princess Limited and Sun Princess II Limited, which do not guarantee our other outstanding debt

As of May 31, 2024, the scheduled maturities of our debt are as follows:


(in millions)
Year	Principal Payments
Remainder of 2024	$	1,195
2025	1,744
2026	2,790
2027	5,212
2028	8,741
Thereafter	10,472
Total	$	30,154

Revolving Facilities

We had $3.0 billion available for borrowing under our Revolving Facility as of May 31, 2024. We may continue to borrow or otherwise utilize available amounts under the Revolving Facility through August 2024, subject to satisfaction of the conditions in the facility.

Carnival Holdings II has a $2.5 billion New Revolving Facility which may be utilized from August 2024 through August 2027, replacing our Revolving Facility upon its maturity in August 2024. The New Revolving Facility was extended from 2025 to 2027 and contains an accordion feature, which Carnival Holdings II partially exercised in 2024 to increase commitments from $2.1 billion to $2.5 billion. The accordion feature allows for further additional commitments not to exceed the aggregate commitments under our Revolving Facility.

Repricing of Senior Secured Term Loans

In April 2024, we entered into amendments with the lender syndicate to reprice $1.7 billion of our first-priority senior secured term loan facility maturing in 2028 and $1.0 billion of our senior secured term loan facility maturing in 2027, which are included within the total Secured Subsidiary Guaranteed Loans balance in the debt table above.

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2030 Senior Unsecured Notes

In April 2024, we issued $535 million aggregate principal amount of 5.8% senior unsecured notes due 2030. We used the net proceeds from the issuance, together with cash on hand, to redeem the outstanding principal amount of the 7.6% senior unsecured notes due 2026.

Debt Prepayments

During the six months ended May 31, 2024, we made prepayments for the following debt instruments:

Euro-denominated tranche of our first-priority senior secured term loan facility maturing in 2025
First-priority senior secured term loan facilities maturing in 2027 and 2028
9.9% second-priority secured notes due 2027
7.6% senior unsecured notes due 2026
5.8% senior unsecured notes due 2027

The aggregate amount of these prepayments was $3.2 billion.

Export Credit Facility Borrowings

During the six months ended May 31, 2024, we borrowed $2.3 billion under export credit facilities due in semi-annual installments through 2036. As of May 31, 2024, the net book value of the vessels subject to negative pledges was $18.8 billion.

Collateral and Priority Pool

As of May 31, 2024, the net book value of our ships and ship improvements, excluding ships under construction, is $40.0 billion. Our secured debt is secured on a first-priority basis by certain collateral, which includes vessels and certain assets related to those vessels and material intellectual property (combined net book value of approximately $22.8 billion, including $21.1 billion related to vessels and certain assets related to those vessels) as of May 31, 2024 and certain other assets.

As of May 31, 2024, $8.1 billion in net book value of our ships and ship improvements relate to the priority pool vessels included in the priority pool of 12 unencumbered vessels (the “Senior Priority Notes Subject Vessels”) for our 2028 Senior Priority Notes and $2.9 billion in net book value of our ship and ship improvements relate to the priority pool vessels included in the priority pool of three unencumbered vessels (the “New Revolving Facility Subject Vessels”) for our New Revolving Facility. As of May 31, 2024, there was no change in the identity of the Senior Priority Notes Subject Vessels or the New Revolving Facility Subject Vessels.

Covenant Compliance

As of May 31, 2024, our Revolving Facility, New Revolving Facility, unsecured loans and export credit facilities contain certain covenants listed below:

Maintain minimum interest coverage (adjusted EBITDA to consolidated net interest charges, as defined in the agreements) (the “Interest Coverage Covenant”) as follows:

◦For certain of our unsecured loans and our New Revolving Facility, from the end of each fiscal quarter from August 31, 2024, at a ratio of not less than 2.0 to 1.0 for each testing date occurring from August 31, 2024 until May 31, 2025, at a ratio of not less than 2.5 to 1.0 for the August 31, 2025 and November 30, 2025 testing dates, and at a ratio of not less than 3.0 to 1.0 for the February 28, 2026 testing date onwards and as applicable through their respective maturity dates.

◦For our export credit facilities, from the end of each fiscal quarter from May 31, 2024, at a ratio of not less than 2.0 to 1.0 for each testing date occurring from May 31, 2024 until May 31, 2025, at a ratio of not less than 2.5 to 1.0 for the August 31, 2025 and November 30, 2025 testing dates, and at a ratio of not less than 3.0 to 1.0 for the February 28, 2026 testing date onwards.

For certain of our unsecured loans and export credit facilities, maintain minimum issued capital and consolidated reserves (as defined in the agreements) of $5.0 billion.
Limit our debt to capital (as defined in the agreements) percentage to a percentage not to exceed 65%.
Maintain minimum liquidity of $1.5 billion.
Adhere to certain restrictive covenants through August 2027 (subject to such covenants terminating if the Company reaches an investment grade credit rating in accordance with the agreement governing the New Revolving Facility).
Limit the amounts of our secured assets as well as secured and other indebtedness.

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At May 31, 2024, we were in compliance with the applicable covenants under our debt agreements. Generally, if an event of default under any debt agreement occurs, then, pursuant to cross-default and/or cross-acceleration clauses therein, substantially all of our outstanding debt and derivative contract payables could become due, and our debt and derivative contracts could be terminated. Any financial covenant amendment may lead to increased costs, increased interest rates, additional restrictive covenants and other available lender protections that would be applicable.

NOTE 4 – Contingencies and Commitments

Litigation

We are routinely involved in legal proceedings, claims, disputes, regulatory matters and governmental inspections or investigations arising in the ordinary course of or incidental to our business. We have insurance coverage for certain of these claims and actions, or any settlement of these claims and actions, and historically the maximum amount of our liability, net of any insurance recoverables, has been limited to our self-insurance retention levels.

We record provisions in the consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated.

Legal proceedings and government investigations are subject to inherent uncertainties, and unfavorable rulings or other events could occur. Unfavorable resolutions could involve substantial monetary damages. In addition, in matters for which conduct remedies are sought, unfavorable resolutions could include an injunction or other order prohibiting us from selling one or more products at all or in particular ways, precluding particular business practices or requiring other remedies. An unfavorable outcome might result in a material adverse impact on our business, results of operations, financial position or liquidity.

As previously disclosed, on May 2, 2019, the Havana Docks Corporation filed a lawsuit against Carnival Corporation in the U.S. District Court for the Southern District of Florida under Title III of the Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton Act, alleging that Carnival Corporation “trafficked” in confiscated Cuban property when certain ships docked at certain ports in Cuba, and that this alleged “trafficking” entitles the plaintiffs to treble damages. On March 21, 2022, the court granted summary judgment in favor of Havana Docks Corporation as to liability. On December 30, 2022, the court entered judgment against Carnival Corporation in the amount of $110 million plus $4 million in fees and costs. We have filed an appeal. Oral argument was held on May 17, 2024.

As of May 31, 2024, two purported class actions brought against us by former guests in the Federal Court in Australia and in Italy remain pending, as previously disclosed. These actions include claims based on a variety of theories, including negligence, gross negligence and failure to warn, physical injuries and severe emotional distress associated with being exposed to and/or contracting COVID-19 onboard our ships. On October 24, 2023, the court in the Australian matter held that we were liable for negligence and for breach of consumer protection warranties as it relates to the lead plaintiff. The court ruled that the lead plaintiff was not entitled to any pain and suffering or emotional distress damages on the negligence claim and awarded medical costs. In relation to the consumer protection warranties claim, the court found that distress and disappointment damages amounted to no more than the refund already provided to guests and therefore made no further award. Further proceedings will determine the applicability of this ruling to the remaining class participants. We continue to take actions to defend against the above claims. We believe the ultimate outcome of these matters will not have a material impact on our consolidated financial statements.

Regulatory or Governmental Inquiries and Investigations

We have been, and may continue to be, impacted by breaches in data security and lapses in data privacy, which occur from time to time. These can vary in scope and range from inadvertent events to malicious motivated attacks.

We have incurred legal and other costs in connection with cyber incidents that have impacted us. The penalties and settlements paid in connection with cyber incidents over recent years were not material. While these incidents did not have a material adverse effect on our business, results of operations, financial position or liquidity, no assurances can be given about the future and we may be subject to future attacks, incidents or litigation that could have such a material adverse effect.

On March 14, 2022, the U.S. Department of Justice and the U.S. Environmental Protection Agency notified us of potential civil penalties and injunctive relief for alleged Clean Water Act violations by owned and operated vessels covered by the 2013 Vessel General Permit. We are working with these agencies to reach a resolution of this matter. We believe the ultimate outcome will not have a material impact on our consolidated financial statements.

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Other Contingent Obligations

Some of the debt contracts we enter into include indemnification provisions obligating us to make payments to the counterparty if certain events occur. These contingencies generally relate to changes in taxes or changes in laws which increase the lender’s costs. There are no stated or notional amounts included in the indemnification clauses, and we are not able to estimate the maximum potential amount of future payments, if any, under these indemnification clauses.

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 capped reserve fund in cash. Although the agreements vary, these requirements may generally be satisfied either through a withheld percentage of customer payments or providing cash funds directly to the credit card processor.

As of May 31, 2024 and November 30, 2023, we had $25 million and $844 million in reserve funds. Additionally, as of May 31, 2024 and November 30, 2023, we had $51 million and $158 million in compensating deposits we are required to maintain. These balances are included within other assets as of May 31, 2024.

Ship Commitments

As of May 31, 2024, our new ship growth capital commitments were $0.1 billion for the remainder of 2024 and $0.9 billion, $0.3 billion, $1.2 billion and $1.0 billion for the years ending November 30, 2025, 2026, 2027 and 2028.

NOTE 5 – Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks

Fair Value Measurements

Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and is measured using inputs in one of the following three categories:

Level 1 measurements are based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.
Level 2 measurements are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or market data other than quoted prices that are observable for the assets or liabilities.
Level 3 measurements are based on unobservable data that are supported by little or no market activity and are significant to the fair value of the assets or liabilities.

Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, certain estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized in a current or future market exchange.

Financial Instruments that are not Measured at Fair Value on a Recurring Basis


	May 31, 2024												November 30, 2023
	Carrying Value			Fair Value									Carrying Value			Fair Value
(in millions)			Level 1			Level 2			Level 3			Level 1			Level 2			Level 3
Liabilities
Fixed rate debt (a)	$	23,445		$	—		$	22,919		$	—		$	22,575		$	—		$	21,503	$	—
Floating rate debt (a)	6,709			—			6,516			—			8,764			—			8,225		—
Total	$	30,154		$	—		$	29,435		$	—		$	31,339		$	—		$	29,728	$	—

(a)The debt amounts above do not include the impact of interest rate swaps or debt issuance costs and discounts. The fair values of our publicly-traded notes were based on their unadjusted quoted market prices in markets that are not sufficiently active to be Level 1 and, accordingly, are considered Level 2. The fair values of our other debt were estimated based on current market interest rates being applied to this debt.

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Financial Instruments that are Measured at Fair Value on a Recurring Basis


	May 31, 2024						November 30, 2023
(in millions)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Cash equivalents (a)	$	769	$	—	$	—	$	1,021	$	—	$	—


Derivative financial instruments	—		24		—		—		22		—
Total	$	769	$	24	$	—	$	1,021	$	22	$	—
Liabilities
Derivative financial instruments	$	—	$	—	$	—	$	—	$	28	$	—
Total	$	—	$	—	$	—	$	—	$	28	$	—

(a)Consists of money market funds and cash investments with original maturities of less than 90 days.

Nonfinancial Instruments that are Measured at Fair Value on a Nonrecurring Basis

Valuation of Goodwill and Trademarks

As of May 31, 2024 and November 30, 2023, goodwill for our North America and Australia (“NAA”) segment was $579 million.


	Trademarks
(in millions)	NAA Segment		Europe Segment		Total
November 30, 2023	$	927	$	237	$	1,164
Exchange movements	—		(1)		(1)
May 31, 2024	$	927	$	236	$	1,163

Derivative Instruments and Hedging Activities


(in millions)	Balance Sheet Location	May 31, 2024		November 30, 2023
Derivative assets
Derivatives designated as hedging instruments
Interest rate swaps (a)	Prepaid expenses and other	$	19	$	—
	Other assets	4		22
Derivatives not designated as hedging instruments
Interest rate swaps (a)	Prepaid expenses and other	—		1

Total derivative assets		$	24	$	22
Derivative liabilities
Derivatives designated as hedging instruments
Cross currency swaps (b)	Other long-term liabilities	$	—	$	12
Interest rate swaps (a)	Other long-term liabilities	—		16
Total derivative liabilities		$	—	$	28

(a)We have interest rate swaps whereby we receive floating interest rate payments in exchange for making fixed interest rate payments. These interest rate swap agreements effectively changed $22 million at May 31, 2024 and $46 million at November 30, 2023 of EURIBOR-based floating rate euro debt to fixed rate euro debt, and $2.0 billion at May 31, 2024 of SOFR-based variable rate debt to fixed rate debt. As of May 31, 2024 and November 30, 2023, the EURIBOR-based interest rate swaps settle through 2025 and were not designated as cash flow hedges; the SOFR-based interest rate swaps settle through 2027 and were designated as cash flow hedges.

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(b)At November 30, 2023, we had a cross currency swap with a notional amount of $670 million that was designated as a hedge of our net investment in foreign operations with euro-denominated functional currencies. This cross currency swap was terminated in January 2024.

Our derivative contracts include rights of offset with our counterparties. As of May 31, 2024 and November 30, 2023, there was no netting for our derivative assets and liabilities. The amounts that were not offset in the balance sheet were not material.

The effect of our derivatives qualifying and designated as hedging instruments recognized in other comprehensive income (loss) and in net income (loss) was as follows:


	Three Months Ended May 31,				Six Months Ended May 31,
(in millions)	2024		2023		2024		2023
Gains (losses) recognized in AOCI:
Cross currency swaps – net investment hedges - included component	$	—	$	(5)	$	—	$	9
Cross currency swaps – net investment hedges - excluded component	$	—	$	—	$	—	$	(4)
Interest rate swaps – cash flow hedges	$	20	$	(33)	$	33	$	(19)
(Gains) losses reclassified from AOCI – cash flow hedges:
Interest rate swaps – Interest expense, net of capitalized interest	$	(8)	$	(9)	$	(20)	$	(10)
Foreign currency zero cost collars – Depreciation and amortization	$	—	$	—	$	1	$	(1)
Gains (losses) recognized on derivative instruments (amount excluded from effectiveness testing – net investment hedges)
Cross currency swaps – Interest expense, net of capitalized interest	$	—	$	3	$	2	$	4

The amount of gains and losses on derivatives not designated as hedging instruments recognized in earnings during the three and six months ended May 31, 2024 and estimated cash flow hedges’ unrealized gains and losses that are expected to be reclassified to earnings in the next twelve months are not material.

Financial Risks

Fuel Price Risks

We manage our exposure to fuel price risk by managing our consumption of fuel. Substantially all of our exposure to market risk for changes in fuel prices relates to the consumption of fuel on our ships. We manage fuel consumption through fleet optimization, energy efficiency, itinerary efficiency and new technologies and alternative fuels.

Foreign Currency Exchange Rate Risks

Overall Strategy

We manage our exposure to fluctuations in foreign currency exchange rates through our normal operating and financing activities, including netting certain exposures to take advantage of any natural offsets and, when considered appropriate, through the use of derivative and non-derivative financial instruments. Our primary focus is to monitor our exposure to, and manage, the economic foreign currency exchange risks faced by our operations and realized if we exchange one currency for another. We consider hedging certain of our ship commitments and net investments in foreign operations. The financial impacts of our hedging instruments generally offset the changes in the underlying exposures being hedged.

Operational Currency Risks

Our operations primarily utilize the U.S. dollar, Euro, Sterling or the Australian dollar as their functional currencies. Our operations also have revenue and expenses denominated in non-functional currencies. Movements in foreign currency exchange rates affect our financial statements.

Investment Currency Risks

We consider our investments in foreign operations to be denominated in stable currencies and of a long-term nature. We have euro-denominated debt which provides an economic offset for our operations with euro functional currency. In addition, we

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have in the past and may in the future utilize derivative financial instruments, such as cross currency swaps, to manage our exposure to investment currency risks.

Newbuild Currency Risks

Our shipbuilding contracts are typically denominated in euros. Our decision to hedge a non-functional currency ship commitment for our cruise brands is made on a case-by-case basis, considering the amount and duration of the exposure, market volatility, economic trends, our overall expected net cash flows by currency and other offsetting risks.

At May 31, 2024, our remaining newbuild currency exchange rate risk relates to euro-denominated newbuild contract payments for non-euro functional currency brands, which represent a total unhedged commitment of $2.1 billion for newbuilds scheduled to be delivered through 2027.

The cost of shipbuilding orders that we may place in the future that are denominated in a different currency than our cruise brands’ functional currency will be affected by foreign currency exchange rate fluctuations. These foreign currency exchange rate fluctuations may affect our decision to order new cruise ships.

Interest Rate Risks

We manage our exposure to fluctuations in interest rates through our debt portfolio management and investment strategies. We evaluate our debt portfolio to determine whether to make periodic adjustments to the mix of fixed and floating rate debt through the use of interest rate swaps and the issuance of new debt.

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. We seek to manage these credit risk exposures, including counterparty nonperformance primarily associated with our cash and cash equivalents, investments, notes receivables, reserve funds related to customer deposits, future financing facilities, contingent obligations, derivative instruments, insurance contracts and new ship progress payment guarantees, by:

Conducting business with well-established financial institutions, insurance companies and export credit agencies
Diversifying our counterparties
Having guidelines regarding credit ratings and investment maturities that we follow to help safeguard liquidity and minimize risk
Generally requiring collateral and/or guarantees to support notes receivable on significant asset sales and new ship progress payments to shipyards

We also monitor the creditworthiness of travel agencies and tour operators in Australia and Europe and credit and debit card providers to which we extend credit in the normal course of our business. Our credit exposure also includes contingent obligations related to cash payments received directly by travel agents and tour operators for cash collected by them on cruise sales in Australia and most of Europe where we are obligated to honor our guests’ cruise payments made by them to their travel agents and tour operators regardless of whether we have received these payments.

Concentrations of credit risk associated with trade receivables and other receivables, charter-hire agreements and contingent obligations are not considered to be material, principally due to the large number of unrelated accounts, the nature of these contingent obligations and their short maturities. Normally, we have not required collateral or other security to support normal credit sales and have not experienced significant credit losses.

NOTE 6 – Segment Information

The chief operating decision maker, who is the President, Chief Executive Officer and Chief Climate Officer of Carnival Corporation and Carnival plc assesses performance and makes decisions to allocate resources for Carnival Corporation & plc based upon review of the results across all of our segments. The operating segments within each of our reportable segments have been aggregated based on the similarity of their economic and other characteristics, including geographic guest sourcing. Our four reportable segments are comprised of (1) NAA cruise operations, (2) Europe cruise operations (“Europe”), (3) Cruise Support and (4) Tour and Other.

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Our Cruise Support segment includes our portfolio of leading port destinations and exclusive islands as well as other services, all of which are operated for the benefit of our cruise brands. Our Tour and Other segment represents the hotel and transportation operations of Holland America Princess Alaska Tours and other operations.


	Three Months Ended May 31,
(in millions)	Revenues		Operating costs and expenses		Selling and administrative		Depreciation and amortization		Operating income (loss)
2024
NAA	$	3,984	$	2,580	$	464	$	414	$	525
Europe	1,697		1,135		230		164		168
Cruise Support	63		39		90		49		(114)
Tour and Other	37		44		6		6		(19)
	$	5,781	$	3,798	$	789	$	634	$	560
2023
NAA	$	3,355	$	2,282	$	435	$	374	$	265
Europe	1,465		1,101		222		169		(27)
Cruise Support	55		29		71		48		(93)
Tour and Other	35		45		8		7		(25)
	$	4,911	$	3,457	$	736	$	597	$	120

	Six Months Ended May 31,
(in millions)	Revenues		Operating costs and expenses		Selling and administrative		Depreciation and amortization		Operating income (loss)
2024
NAA	$	7,558	$	4,982	$	966	$	813	$	797
Europe	3,466		2,386		464		328		288
Cruise Support	122		75		162		94		(210)
Tour and Other	41		59		10		12		(40)
	$	11,187	$	7,502	$	1,603	$	1,247	$	836
2023
NAA	$	6,434	$	4,471	$	875	$	738	$	351
Europe	2,759		2,179		436		338		(193)
Cruise Support	106		55		124		90		(162)
Tour and Other	44		64		14		13		(47)
	$	9,343	$	6,768	$	1,448	$	1,179	$	(52)

Revenue by geographic areas, which are based on where our guests are sourced, were as follows:


	Three Months Ended May 31,				Six Months Ended May 31,
(in millions)	2024		2023		2024		2023
North America	$	3,542	$	2,988	$	6,663	$	5,684
Europe	1,631		1,446		3,199		2,633
Australia	355		307		781		645
Other	252		169		545		380
	$	5,781	$	4,911	$	11,187	$	9,343

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NOTE 7 – Earnings Per Share


	Three Months Ended May 31,				Six Months Ended May 31,
(in millions, except per share data)	2024		2023		2024		2023
Net income (loss) for basic and diluted earnings per share	$	92	$	(407)	$	(123)	$	(1,100)
Weighted-average shares outstanding	1,267		1,263		1,265		1,261
Dilutive effect of equity awards	4		—		—		—

Diluted weighted-average shares outstanding	1,271		1,263		1,265		1,261

Basic earnings per share	$	0.07	$	(0.32)	$	(0.10)	$	(0.87)
Diluted earnings per share	$	0.07	$	(0.32)	$	(0.10)	$	(0.87)

Antidilutive shares excluded from diluted earnings per share computations were as follows:


	Three Months Ended May 31,		Six Months Ended May 31,
(in millions)	2024	2023	2024	2023
Equity awards	—	1	5	1
Convertible Notes	127	130	127	134
Total antidilutive securities	127	131	132	134

NOTE 8 – Supplemental Cash Flow Information


(in millions)	May 31, 2024		November 30, 2023
Cash and cash equivalents (Consolidated Balance Sheets)	$	1,646	$	2,415
Restricted cash (included in prepaid expenses and other and other assets)	23		21
Total cash, cash equivalents and restricted cash (Consolidated Statements of Cash Flows)	$	1,669	$	2,436

NOTE 9 – Subsequent Events

In June 2024, we announced that we will fold the operations of P&O Cruises Australia into Carnival Cruise Line in March 2025. We do not anticipate this realignment to have a material impact on our consolidated financial statements.

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