Carnival 10-Q 2026-02-28

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended February 28, 2026

OR

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)

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

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.

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 ☑

CARNIVAL CORPORATION & PLC

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

CARNIVAL CORPORATION & PLC

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(UNAUDITED)

(in millions, except per share data)

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

CARNIVAL CORPORATION & PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(in millions)

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

CARNIVAL CORPORATION & PLC

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in millions, except par values)

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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 statements concerning future results, operations, strategy, 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.

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. These factors include, but are not limited to, the following:

• Events and conditions around the world, including geopolitical uncertainty, war and other military actions, pandemics, inflation, higher interest rates and other general concerns impacting the ability or desire of people to travel could lead to a decline in demand for cruises as well as have significant negative impacts on our financial condition and operations.

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

• Adverse weather conditions or an increase in the frequency and/or severity of adverse weather conditions could have a material impact on our business and results of operations.

• Our targets, goals, aspirations, initiatives, public statements and disclosures, including those related to sustainability matters, may expose us to risks that may adversely impact our business.

• Cybersecurity incidents and data privacy breaches, as well as disruptions and other damages to our principal and other 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 fines, penalties and reputational damage.

• Our debt requires a significant amount of cash to service and our ability to generate sufficient cash depends on many factors, some of which may be beyond our control. Our financial condition and operations could be adversely impacted if we are unable to service our debt or satisfy our covenants.

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

• 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.

• We rely on suppliers who are integral to the operations of our businesses. These suppliers and service providers 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.

• Our investments in port destinations and exclusive islands may expose us to additional risks.

• 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.

• 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-money laundering, anti-corruption, economic sanctions, trade protection measures, labor and employment, and tax may be costly and lead to litigation, enforcement actions, fines, penalties and reputational damage.

• Factors associated with sustainability and the impact of greenhouse gases and other emissions on the environment could have a material impact on our business and operating results.

• We may not successfully complete the proposed unification of our dual listed company (“DLC”) structure and the migration of Carnival Corporation’s legal incorporation to Bermuda, or, if we do, we may not realize the anticipated benefits and will be subject to Bermuda law, which differs in some respects compared to our current jurisdictions.

The ordering of the risk factors set forth above is not intended to reflect our indication of priority or likelihood. There may be additional risks that we consider immaterial or which are unknown. Additional information about the factors that may affect future results is contained in our most recent Annual Report on Form 10-K as well as our other filings with the SEC, all of which are available on the SEC's website at www.sec.gov.

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 emissions and environmental-related matters). In addition, historical, current, and forward-looking sustainability-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” of the consolidated financial statements for additional discussion regarding Accounting Pronouncements.

Critical Accounting Estimates

For a discussion of our critical accounting estimates, see “Item 7. 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. Our results are also impacted by ships being taken out-of-service for planned maintenance, which we schedule during non-peak seasons. In addition, substantially all of Holland America Princess Alaska Tours’ revenue and operating income is generated from May through September in conjunction with Alaska’s cruise season.

Proposed DLC Unification and Redomiciliation

On January 27, 2026, Carnival Corporation filed a Registration Statement on Form S-4 with the SEC, as amended by Amendment No. 1 filed on February 20, 2026 (the “S-4”), in connection with the proposed unification of the dual listed company structure under a single corporate entity, Carnival Corporation, with Carnival plc as its wholly-owned UK subsidiary, and the shifting of Carnival Corporation’s legal incorporation from Panama to Bermuda, as previously disclosed. The SEC declared the S‑4 effective on February 27, 2026 and the definitive joint proxy statement/prospectus relating to the S‑4 was filed with the SEC on February 27, 2026.

Known Trends and Uncertainties

We believe changes in the cost of fuel, fluctuations in foreign currency exchange rates and new and evolving regulatory requirements related to the reduction of greenhouse gas emissions are reasonably likely to impact our profitability in both the short and long-term. We became subject to the EU Emissions Trading System (“ETS”) on January 1, 2024, which includes a three-year phase-in period. The impact of this regulation in 2025 was $91 million, which represented costs associated with 70% of emissions under the ETS operational scope. In 2026, all in scope emissions will be impacted.

Recent geopolitical uncertainty may impact our results of operations and may heighten other risks discussed in “Item 1A. Risk Factors,” included in the Form 10-K.

Statistical Information

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)For the three months ended February 28, 2026 compared to the three months ended February 28, 2025, we had a 0.5% capacity increase in ALBDs comprised of a 1.4% capacity increase in our North America segment and a 1.3% capacity decrease in our Europe segment.

• Our North America segment’s capacity increase was caused by a Princess Cruises 4,310-passenger capacity ship that entered into service in September 2025, partially offset by a P&O Cruises (Australia) 2,000-passenger capacity ship that left the fleet in February 2025.

• Our Europe segment’s capacity decrease was caused by more ship dry-dock days in 2026 compared to 2025.

(d)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.

Three Months Ended February 28, 2026 (“2026”) Compared to Three Months Ended February 28, 2025 (“2025”)

Revenues

Consolidated

Passenger ticket revenues made up 65% of our 2026 total revenues. Passenger ticket revenues increased by $191 million, or 5.0%, to $4.0 billion in 2026 from $3.8 billion in 2025.

This increase was caused by:

• $158 million - net favorable foreign currency translation impact

• $42 million - higher ticket prices driven by continued strength in demand

These increases were partially offset by a decrease of $27 million in air transportation revenue.

The remaining 35% of 2026 total revenues were comprised of Onboard and other revenues, which increased by $164 million, or 8.3%, to $2.1 billion in 2026 from $2.0 billion in 2025.

This increase was driven by:

• $104 million - higher onboard spending by our guests

• $49 million - net favorable foreign currency translation impact

North America Segment

Passenger ticket revenues made up 61% of our North America segment’s 2026 total revenues. Passenger ticket revenues increased by $17 million, or 0.7%, and were $2.4 billion in 2026 and 2025.

This increase was caused by:

• $35 million - 1.4% capacity increase in ALBDs

• $22 million - higher ticket prices driven by continued strength in demand

These increases were partially offset by a 1.3 percentage point decrease in occupancy, representing $31 million.

The remaining 39% of our North America segment’s 2026 total revenues were comprised of Onboard and other revenues, which increased by $95 million, or 6.4%, to $1.6 billion in 2026 from $1.5 billion in 2025.

This increase was caused by:

• $91 million - higher onboard spending by our guests

• $21 million - 1.4% capacity increase in ALBDs

These increases were partially offset by a 1.3 percentage point decrease in occupancy representing $19 million.

Europe Segment

Passenger ticket revenues made up 77% of our Europe segment’s 2026 total revenues. Passenger ticket revenues increased by $172 million, or 12%, to $1.6 billion in 2026 from $1.4 billion in 2025.

This increase was caused by:

• $158 million - net favorable foreign currency translation

• $36 million - 2.5 percentage point increase in occupancy

• $20 million - higher ticket prices driven by continued strength in demand

These increases were partially offset by a decrease of $21 million in air transportation revenue.

The remaining 23% of our Europe segment’s 2026 total revenues were comprised of Onboard and other revenues, which increased by $68 million, or 16%, to $480 million in 2026 from $413 million in 2025. This increase was driven by a net favorable foreign currency translation impact of $49 million.

Operating Expenses

Consolidated

Operating expenses increased by $173 million, or 4.6%, to $3.9 billion in 2026 from $3.8 billion in 2025.

This increase was caused by:

• $126 million - net unfavorable foreign currency translation

• $75 million - higher repair and maintenance expenses (including dry-dock expenses)

• $19 million - 0.5% capacity increase in ALBDs

These increases were partially offset by:

• $44 million - lower fuel prices including the impact of emission allowances

• $27 million - lower fuel consumption per ALBD

Selling and administrative expenses increased by $76 million, or 9.0%, to $924 million in 2026 from $848 million in 2025. This increase was driven by increased investment in advertising, higher compensation expense and higher information technology expense.

Depreciation and amortization expenses increased by $42 million, or 6.4%, to $696 million in 2026 from $654 million in 2025.

North America Segment

Operating expenses increased by $16 million, or 0.7%, to $2.5 billion in 2026 from $2.4 billion in 2025.

This increase was caused by:

• $35 million - 1.4% capacity increase in ALBDs

• $35 million - higher repair and maintenance expenses (including dry-dock expenses)

These increases were partially offset by:

• $35 million - lower fuel prices including the impact of emission allowances

• $19 million - lower fuel consumption per ALBD

Selling and administrative expenses increased by $16 million, or 3.0%, to $537 million in 2026 from $521 million in 2025.

Depreciation and amortization expenses increased by $26 million, or 6.1%, to $460 million in 2026 from $434 million in 2025.

Europe Segment

Operating expenses increased by $151 million, or 12%, to $1.4 billion in 2026 from $1.3 billion in 2025.

This increase was caused by:

• $129 million - net unfavorable foreign currency translation

• $41 million - higher repair and maintenance expenses (including dry-dock expenses)

These increases were partially offset by a 1.3% capacity decrease in ALBDs, representing $16 million.

Selling and administrative expenses increased by $33 million, or 13%, to $283 million in 2026 from $250 million in 2025. This increase was caused by higher compensation expense, increased investment in advertising and higher information technology expense.

Depreciation and amortization expenses increased by $25 million, or 15%, to $194 million in 2026 from $169 million in 2025. This increase was caused by net unfavorable foreign currency translation impacts.

Operating Income

Our consolidated operating income increased by $64 million to $607 million in 2026 from $543 million in 2025. Our North America segment’s operating income increased by $54 million to $569 million in 2026 from $516 million in 2025, and our Europe segment’s operating income increased by $30 million to $170 million in 2026 from $140 million in 2025. These changes were primarily due to the reasons discussed above.

Nonoperating Income (Expense)

Interest expense, net of capitalized interest decreased by $85 million, or 23%, to $291 million in 2026 from $377 million in 2025. The decrease was caused by lower average interest rates and a decrease in total debt.

Other income (expense), net changed by $59 million, to $(47) million in 2026 from $12 million in 2025. The decrease was substantially all due to foreign currency remeasurement.

Liquidity, Financial Condition and Capital Resources

As of February 28, 2026, we had $5.9 billion of liquidity including $1.4 billion of cash and cash equivalents and $4.5 billion available for borrowing under our multicurrency revolving credit facility. In addition, we had $10.9 billion of undrawn export credit facilities to fund future ship deliveries.

We had a working capital deficit of $8.7 billion as of February 28, 2026 compared to $8.9 billion as of November 30, 2025. We operate with a substantial working capital deficit, largely due to our business model in which guest cruise deposits and the advance purchases of onboard and other services are collected ahead of the sailing date and recorded as a liability until recognized as revenue. These customer deposits are used alongside other cash sources to fund operations, service debt, and support capital investments.

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. In addition, we have a relatively low level of accounts receivable and limited investment in inventories.

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.

Sources and Uses of Cash

Operating Activities

Our business provided $1.3 billion of net cash flows from operating activities during the three months ended February 28, 2026, an increase of $0.3 billion, compared to $0.9 billion provided for the same period in 2025. This was caused by an improvement in our earnings with $263 million of net income in 2026 compared to $75 million of net loss in 2025 and other working capital changes, partially offset by the nonrecurrence of losses on debt extinguishment.

Investing Activities

During the three months ended February 28, 2026, net cash used in investing activities of $597 million was driven by capital expenditures of $566 million substantially all attributable to ship improvements and development of our portfolio of exclusive destinations.

During the three months ended February 28, 2025, net cash used in investing activities was $605 million. This was caused by capital expenditures of $607 million primarily attributable to ship improvements and developments in our port destinations and exclusive islands.

Financing Activities

During the three months ended February 28, 2026, net cash used in financing activities of $1.2 billion was driven by:

• Repayments of $945 million of long-term debt

• Payments of cash dividends of $208 million

During the three months ended February 28, 2025, net cash used in financing activities of $690 million was driven by:

• Repayments of $3.4 billion of long-term debt

• Debt issuance costs of $24 million

• Debt extinguishment costs of $197 million

• Issuances of $3.0 billion of long-term debt

Funding Sources

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.

Our export credit facilities contain various financial covenants as described in Note 3 - “Debt”. At February 28, 2026, we were in compliance with the applicable covenants under our debt agreements.

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 “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” within our Form 10-K. There have been no material changes to our exposure to market risks since the date of our 2025 Form 10-K.

Interest Rate Risks

The composition of our debt was as follows:

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 Chief Executive Officer and our Chief Financial Officer and Chief Accounting Officer have evaluated our disclosure controls and procedures and have concluded, as of February 28, 2026, that they are effective 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, 2026 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**.**

To the extent disclosure is required by Part II. Item 1 of Form 10-Q, the legal proceedings described in Note 4 – “Contingencies and Commitments” of our consolidated financial statements, including those described under “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 will exceed $1 million for such proceedings.

The risk factors that affect our business and financial results are discussed in “Item 1A. Risk Factors,” included in the Form 10-K, and there has been no material change to these risk factors since the Form 10-K filing. These risks should be carefully considered, and 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.

Trading Plans

During the quarter ended February 28, 2026, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).

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.