What changed in this filing

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Item 1. Financial Statements

2021-09-30 compared with 2021-06-28 · 163 added, 133 removed, 481 unchanged (38% of the section changed)

3 unchanged sentences

(in millions, except per share data)

Three Months Ended May 31, Six Months Ended

Three Months Ended August 31, Nine Months Ended

2021 2020 2021 2020

19 unchanged sentences

Interest expense, net of capitalized interest ( 418 ) ( 310 ) ( 1,253 ) ( 547 )

Gains (losses) on debt extinguishment, net ( 376 ) ( 220 ) ( 372 ) ( 220 )

Other income (expense), net ( 11 ) ( 1 ) ( 87 ) ( 41 )

10 unchanged sentences

(in millions)

Three Months Ended May 31, Six Months Ended

Three Months Ended August 31, Nine Months Ended

2021 2020 2021 2020

53 unchanged sentences

(in millions)

Six Months Ended

Nine Months Ended

OPERATING ACTIVITIES

3 unchanged sentences

Impairments 541 3,925

(Gain) loss on extinguishment of debt 372 220

Share-based compensation 95 52

22 unchanged sentences

Principal repayments of long-term debt ( 3,507 ) ( 896 )

Premium paid on extinguishment of debt ( 286 ) —

Proceeds from issuance of long-term debt 7,900 11,468

Dividends paid — ( 689 )

Purchases of treasury stock — ( 12 )

Issuance of common stock, net 1,003 778

Issuance of common stock under the Stock Swap program 105 —

Purchases of treasury stock under the Stock Swap program ( 94 ) —

Debt issue costs and other, net ( 239 ) ( 103 )

14 unchanged sentences

stock Total shareholders’ equity

At February 29, 2020 $ 7 $ 358 $ 8,829 $ 25,527 $ ( 2,028 ) $ ( 8,404 ) $ 24,290

At May 31, 2020 $ 7 $ 360 $ 9,683 $ 21,155 $ ( 1,962 ) $ ( 8,404 ) $ 20,840

Net income (loss) — — — ( 2,858 ) — — ( 2,858 )

Other comprehensive income (loss) — — — — 524 — 524

Issuance of common stock through

underwritten public offering (net of offering expenses and underwriters’ discount) 1 — 555 — — — 556

Equity component of Convertible Senior Notes — — 286 — — — 286

Purchases of treasury stock under the

Repurchase Program and other — 2 12 2 — — 16

Issuance of common stock related to the repurchase of Convertible Notes — — 222 — — — 222

Repurchase of Convertible Notes 1 — 765 — — — 766

Other — — 9 — — — 9

At August 31, 2020 $ 8 $ 361 $ 10,680 $ 18,297 $ ( 1,439 ) $ ( 8,404 ) $ 19,503

At May 31, 2021 $ 11 $ 361 $ 15,005 $ 12,030 $ ( 1,126 ) $ ( 8,404 ) $ 17,876

At February 28, 2021 $ 11 $ 361 $ 14,977 $ 14,102 $ ( 1,233 ) $ ( 8,404 ) $ 19,813

Net income (loss) — — — ( 2,836 ) — — ( 2,836 )

Other comprehensive income (loss) — — — — ( 223 ) — ( 223 )

Issuance of common stock, net — — 7 — — — 7

Conversion of Convertible Notes — — 2 — — — 2

Purchases and issuances under the Stock Swap program — — 105 — — ( 95 ) 10

Other — — 28 — — — 28

At May 31, 2021 $ 11 $ 361 $ 15,005 $ 12,030 $ ( 1,126 ) $ ( 8,404 ) $ 17,876

Six Months Ended

At August 31, 2021 $ 11 $ 361 $ 15,146 $ 9,194 $ ( 1,349 ) $ ( 8,500 ) $ 14,863

Nine Months Ended

stock Ordinary

8 unchanged sentences

— — — ( 342 ) — — ( 342 )

Issuance of common stock through underwritten public offering (net of offering expenses and underwriters’ discount) 1 — 555 — — — 556

Equity component of Convertible Senior Notes — — 286 — — — 286

Issuance of common stock 1 — 777 — — — 778

Issuance and repurchase of Convertible Notes 1 — 1,051 — — — 1,052

Purchases of treasury stock under the Repurchase Program and other — 2 44 — — ( 10 ) 36

At May 31, 2020 $ 7 $ 360 $ 9,683 $ 21,155 $ ( 1,962 ) $ ( 8,404 ) $ 20,840

At August 31, 2020 $ 8 $ 361 $ 10,680 $ 18,297 $ ( 1,439 ) $ ( 8,404 ) $ 19,503

At November 30, 2020 $ 11 $ 361 $ 13,948 $ 16,075 $ ( 1,436 ) $ ( 8,404 ) $ 20,555

2 unchanged sentences

Issuance of common stock, net — — 1,003 — — — 1,003

Conversion of Convertible Notes — — 2 — — — 2

Purchases and issuances under the Stock Swap program — — 105 — — ( 95 ) 10

Other — — 88 — — — 88

At May 31, 2021 $ 11 $ 361 $ 15,005 $ 12,030 $ ( 1,126 ) $ ( 8,404 ) $ 17,876

At August 31, 2021 $ 11 $ 361 $ 15,146 $ 9,194 $ ( 1,349 ) $ ( 8,500 ) $ 14,863

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

6 unchanged sentences

In the face of the global impact of COVID-19, we paused our guest cruise operations in mid-March 2020.

As of May 31, 2021, five of our ships were operating with guests onboard.

Eight of our nine brands either have resumed or are announced to resume guest operations by November 30, 2021, as part of our phased return to service.

Significant events affecting travel, including COVID-19 and our phased resumption of guest cruise operations, have had and continue to have an impact on booking patterns.

The full extent of the impact will be determined by our phased return to service and the length of time COVID-19 influences travel decisions.

We believe that the ongoing effects of COVID-19 on our operations and global bookings have had, and will continue to have, a material negative impact on our financial results and liquidity.

As of August 31, 2021, eight of our nine brands have resumed guest cruise operations as part of our gradual return to service, with 35 % of our capacity operating with guests on board.

Significant events affecting travel, including COVID-19 and our gradual resumption of guest cruise operations, have had and continue to have an impact on booking patterns.

The full extent of the impact will be determined by our gradual return to service and the length of time COVID-19 influences travel decisions.

We believe that the ongoing effects of COVID-19 have had, and will continue to have, a material negative impact on our financial results and liquidity.

The estimation of our future liquidity requirements includes numerous assumptions that are subject to various risks and uncertainties.

The principal assumptions used to estimate our future liquidity requirements consist of:

• Expected continued phased resumption of guest cruise operations

• Expected continued gradual resumption of guest cruise operations

• Expected lower than comparable historica l occupancy levels during the resumption of guest cruise operations

• Expected incremental spend for the resumption of guest cruise operations, for bringing our ships out of pause status, returning crew members to our ships and implementing enhanced health and safety protocols

• Expected incremental spend for the resumption of guest cruise operations, including completing the return of our ships to guest cruise operations, returning crew members to our ships and maintaining enhanced health and safety protocols

In addition, we make certain assumptions about new ship deliveries, improvements and disposals, and consider the future export credit financings that are associated with the ship deliveries.

3 unchanged sentences

We continue to expect a net loss on both a U.S.

GAAP and adjusted basis for the third quarter of 2021 and the full year ending November 30, 2021.

We have taken actions to improve our liquidity, including completing various capital market transactions, capital expenditure and operating expense reductions, accelerating the removal of certain ships from our fleet and expect to continue to pursue refinancing opportunities to reduce interest expense and extend maturities.

Based on these actions and our assumptions regarding the impact of COVID-19, and considering our $ 9.3 billion of cash and short-term investments at May 31, 2021, we have concluded that we have sufficient liquidity to satisfy our obligations for at least the next twelve months.

GAAP and adjusted basis for the fourth quarter of 2021 and full year ending November 30, 2021.

We have taken actions to improve our liquidity, including completing various capital market transactions, capital expenditure and operating expense reductions, and accelerating the removal of certain ships from our fleet.

In addition, we expect to continue to pursue refinancing opportunities to reduce interest expense and extend maturities.

Based on these actions and our assumptions regarding the impact of COVID-19, considering our $ 7.8 billion of liquidity including cash and short-term investments at August 31, 2021, as well as our expected continued gradual return to service, we have concluded that we have sufficient liquidity to satisfy our obligations for at least the next twelve months.

Basis of Presentation

The Consolidated Statements of Income (Loss), the Consolidated Statements of Comprehensive Income (Loss) and the Consolidated Statements of Shareholders’ Equity for the three and six months ended May 31, 2021 and 2020, Consolidated Statements of Cash Flows for the six months ended May 31, 2021 and 2020, and the Consolidated Balance Sheet at May 31, 2021 are unaudited and, in the opinion of our management, contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement.

The Consolidated Statements of Income (Loss), the Consolidated Statements of Comprehensive Income (Loss) and the Consolidated Statements of Shareholders’ Equity for the three and nine months ended August 31, 2021 and 2020, Consolidated Statements of Cash Flows for the nine months ended August 31, 2021 and 2020, and the Consolidated Balance Sheet at August 31, 2021 are unaudited and, in the opinion of our management, contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement.

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 2020 joint Annual Report on Form 10-K (“Form 10-K”) filed with the U.S.

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GAAP”) requires management to make estimates and assumptions that affect the amounts reported and disclosed.

The full extent to which the effects of COVID-19 will directly or indirectly impact our business, operations, results of operations and financial condition, including our valuation of goodwill and trademarks, impairment of ships, collectability of trade and notes receivables as well as provisions for pending litigation, will depend on future

developments that are highly uncertain.

ships, collectability of trade and notes receivables as well as provisions for pending litigation, will depend on future developments that are highly uncertain.

We have made reasonable estimates and judgments of the impact of COVID-19 within our financial statements and there may be changes to those estimates in future periods.

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This portion of the fees, taxes and charges is expensed in commissions, transportation and other costs when the corresponding revenues are recognized.

For the three and six months ended May 31, fees, taxes, and charges included in commissions, transportation and other costs were not significant in 2021 and were $ 41 million and $ 215 million in 2020.

For the three and nine months ended August 31, 2021, fees, taxes, and charges included in commissions, transportation and other costs were immaterial.

For the three and nine months ended August 31, 2020, fees, taxes, and charges included in commissions, transportation and other costs were immaterial and $ 213 million, respectively.

The remaining portion of fees, taxes and charges are expensed in other operating expenses when the corresponding revenues are recognized.

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These amounts include refundable deposits.

We are providing flexibility to guests with bookings on sailings cancelled due to the pause in cruise operations by allowing guests to receive enhanced future cruise credits (“FCC”) or elect to receive refunds in cash.

We have paid and expect to continue to pay cash refunds of customer deposits with respect to a portion of these cancelled cruises.

The amount of cash refunds to be paid may depend on the level of guest acceptance of FCCs and future cruise cancellations.

We record a liability for FCCs to the extent we have received cash from guests with bookings on cancelled sailings.

We had customer deposits of $ 2.5 billion as of May 31, 2021 and $ 2.2 billion as of November 30, 2020.

As of May 31, 2021, the current portion of customer deposits was $ 2.0 billion.

We have provided flexibility to guests with bookings on sailings cancelled due to itinerary disruptions by allowing guests to receive enhanced future cruise credits (“FCC”) or elect to receive refunds in cash.

Enhanced FCCs provide the guest with an additional credit value above the original cash deposit received and are recognized as a discount applied to the future cruise in the period used.

We have paid and expect to continue to pay cash refunds of customer deposits with respect to a portion of cancelled cruises.

The amount of cash refunds to be paid may depend on the continued level of guest acceptance of FCCs and future cruise cancellations.

We record a liability for unexpired FCCs to the extent we have received and not refunded cash from guests for cancelled bookings.

We had customer deposits of $ 3.1 billion as of August 31, 2021 and $ 2.2 billion as of November 30, 2020.

As of August 31, 2021, the current portion of customer deposits was $ 2.7 billion.

This amount includes deposits related to cancelled cruises prior to the election of a cash refund by guests.

Refunds payable to guests who have elected cash refunds are recorded in accounts payable.

Due to the uncertainty associated with the duration and extent of COVID-19, we are unable to estimate the amount of the May 31, 2021 customer deposits that will be recognized in earnings compared to amounts that will be refunded to customers or issued as a credit for future travel .

During the six months ended May 31, 2021 and 2020, we recognized revenues of an immaterial amount and $ 3.5 billion, respectively, related to our customer deposits as of November 30, 2020 and 2019.

Due to uncertainties associated with the gradual resumption of guest cruise operations we are unable to estimate the amount of the August 31, 2021 customer deposits that will be recognized in earnings compared to amounts that will be refunded to customers or issued as a credit for future travel .

During the nine months ended August 31, 2021 and 2020, we recognized revenues of an immaterial amount and $ 3.3 billion, respectively, related to our customer deposits as of November 30, 2020 and 2019.

Historically, our customer deposits balance changes due to the seasonal nature of cash collections, the recognition of revenue, refund of customer deposits and foreign currency translation.

3 unchanged sentences

These receivables are included within trade and other receivables, net.

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.

These reserve funds are included in other assets.

Contract Assets

Contract assets are amounts paid prior to the start of a voyage, which we record as an asset within prepaid expenses and other and which are subsequently recognized as commissions, transportation and other at the time of revenue recognition or at the time of voyage cancellation.

We have contract assets of an immaterial amount as of May 31, 2021 and November 30, 2020.

We have contract assets of an immaterial amount as of August 31, 2021 and November 30, 2020.

NOTE 3 – Debt

Short-Term Borrowings

As of August 31, 2021 and November 30, 2020, our short-term borrowings consisted of the $ 3.1 billion under our multi-currency revolving credit facility (the “Revolving Facility”).

For the nine months ended August 31, 2021, there were no borrowings or repayments of commercial paper with original maturities greater than three months.

For the nine months ended August 31, 2020, we had borrowings of $ 525 million and repayments of $ 192 million of commercial paper with original maturities greater than three months.

Export Credit Facility Borrowings

In December 2020, we borrowed $ 1.5 billion under export credit facilities due in semi-annual installments through 2033.

In July 2021, we borrowed $ 544 million under an export credit facility due in semi-annual installments through 2033.

2027 Senior Unsecured Notes

1 unchanged sentence

The 2027 Senior Unsecured Notes bear interest at a rate of 5.8 % per year.

The 2027 Senior Unsecured Notes are guaranteed by Carnival plc and the same subsidiaries of Carnival Corporation & plc that guarantee the 2023 Secured Notes, 2026 Secured Notes, 2027 Senior Secured Notes and 2026 Senior Unsecured Notes, and are unsecured.

The indenture governing the 2027 Senior Unsecured Notes contains covenants that are substantially similar to the covenants in the indentures governing the 2026 Senior Unsecured Notes and, except for the unsecured nature of the 2027 Senior Unsecured Notes, the indentures governing the 2023 Secured Notes, 2026 Secured Notes and 2027 Secured Notes and the credit agreement governing the 2025 Secured Term Loan.

These covenants are subject to a number of important limitations and exceptions.

Repricing of 2025 Secured Term Loan

In June 2021, we entered into an amendment to reprice our $ 2.8 billion 2025 Secured Term Loan (the “2025 Secured Term Loan”).

The amended U.S.

dollar tranche bears interest at a rate per annum equal to LIBOR (with a 0.75 % floor) plus 3 %.

The amended euro tranche bears interest at a rate per annum equal to EURIBOR (with a 0 % floor) plus 3.75 %.

2028 Senior Secured Notes

In July 2021, we issued $ 2.4 billion aggregate principal amount of 4 % first-priority senior secured notes due in 2028 (the “2028 Senior Secured Notes”).

We used the net proceeds from the issuance to purchase $ 2.0 billion aggregate principal amount of the 2023 Senior Secured Notes.

The 2028 Senior Secured Notes mature on August 1, 2028.

The 2028 Senior Secured Notes are secured on a first-priority basis by collateral, which includes vessels and material intellectual property with a net book value of approximately $ 26.3 billion as of August 31, 2021 and certain other assets.

Debt Holidays

We amended substantially all of our drawn export credit facilities to defer approximately $ 1.0 billion of principal payments that would otherwise have been due over a one year period commencing April 1, 2021 until March 31, 2022, with repayments to be made over the following five years.

Of these amendments, the deferral of an aggregate principal amount of $ 0.7 billion became effective as of August 31, 2021, and an aggregate principal amount of $ 0.3 billion became effective after August 31, 2021.

The cumulative deferred principal amount of the debt holiday amendments is approximately $ 1.7 billion, inclusive of the amendments entered into in 2020 and through September 14, 2021.

In addition, these amendments aligned the financial covenants of substantially all our drawn export credit facilities with our other facilities.

Covenant Compliance

Our export credit facilities contain one or more covenants that require us to:

• Maintain minimum interest coverage (EBITDA to consolidated net interest charges for the most recently ended four fiscal quarters) (the “Interest Coverage Covenant”) of not less than 3.0 to 1.0 at the end of each fiscal quarter

• Maintain minimum shareholders’ equity of $ 5.0 billion

• Limit our debt to capital percentage (the “Debt to Capital Covenant”) to 65 % at the end of each fiscal quarter

• Limit the amounts of our secured assets as well as secured and other indebtedness

We entered into supplemental agreements to waive compliance with the Interest Coverage Covenant and the Debt to Capital Covenant under our export credit facilities through August 31, 2022 or November 30, 2022, as applicable.

We will be required to comply beginning with the next testing date of November 30, 2022 or February 28, 2023, as applicable.

During the first quarter of 2021 we entered into supplemental agreements with respect to our $ 3.1 billion ($ 1.7 billion, € 1.0 billion and £ 150 million) multi-currency revolving credit facility (the “Revolving Credit Facility”) and many of our bank loans.

These agreements now contain one or more covenants that require us to:

• Maintain the Interest Coverage Covenant at the end of each fiscal quarter from February 28, 2023, at a ratio of not less than 2.0 to 1.0 for the February 28, 2023 and May 31, 2023 testing dates, 2.5 to 1.0 for the August 31, 2023 and November 30, 2023 testing dates, and 3.0 to 1.0 for the February 28, 2024 testing date onwards, or through their respective maturity dates.

Our Revolving Facility, our unsecured bank loans and substantially all of our drawn export credit facilities as of September 14, 2021 contain one or more covenants that require us to:

• Maintain minimum interest coverage (EBITDA to consolidated net interest charges (the “Interest Coverage Covenant”) at the end of each fiscal quarter from February 28, 2023, at a ratio of not less than 2.0 to 1.0 for the February 28, 2023 and May 31, 2023 testing dates, 2.5 to 1.0 for the August 31, 2023 and November 30, 2023 testing dates, and 3.0 to 1.0 for the February 28, 2024 testing date onwards, or through their respective maturity dates

• Maintain minimum shareholders’ equity of $ 5.0 billion

• Maintain the Debt to Capital Covenant at the end of each fiscal quarter before the November 30, 2021 testing date at a percentage not to exceed 65 %.

From the November 30, 2021 testing date until the May 31, 2023 testing date, the Debt to Capital Covenant is not to exceed 75 %, following which it will be tested at levels which decline ratably to 65 % from the May 31, 2024 testing date onwards.

• Maintain minimum liquidity of $ 1.0 billion through November 30, 2022.

• Limit our debt to capital percentage (the “Debt to Capital Covenant”) through the August 31, 2021 testing date at a percentage not to exceed 65 %.

• Maintain minimum liquidity of $ 1.0 billion through February 29, 2024

• Adhere to certain restrictive covenants through November 30, 2024

• Restrict the granting of guarantees and security interests for certain of our outstanding debt through November 30, 2024

At May 31, 2021, we were in compliance with the applicable covenants under our debt agreements.

• Limit the amounts of our secured assets as well as secured and other indebtedness

In addition, export credit facilities with $ 0.4 billion outstanding indebtedness contain covenants that require us to, among other things, maintain the Interest Coverage Covenant of not less than 3.0 to 1.0 at the end of each fiscal quarter and the Debt to Capital Covenant not to exceed 65 % at the end of each fiscal quarter.

We have entered into supplemental agreements to waive compliance with the Interest Coverage Covenant and the Debt to Capital Covenant under these export credit facilities through November 30, 2022.

We will be required to comply with such covenants beginning with the next testing date of February 28, 2023.

At August 31, 2021, 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 acceleration clauses, substantially all of our outstanding debt and derivative contract payables could become due, and all 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.

As of May 31, 2021, the scheduled maturities of our debt are as follows:

Carnival Corporation or Carnival plc and certain of our subsidiaries have guaranteed substantially all of our indebtedness.

As of August 31, 2021, the scheduled maturities of our debt are as follows:

(in millions)

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Total $ 31,964

(a) Includes the $ 3.1 billion Revolving Credit Facility.

The Revolving Credit Facility was fully drawn in 2020 for six month terms.

The maturities for these borrowings are currently extended through September 2021.

We may re-borrow such amounts through August 2024 subject to satisfaction of the conditions in the facility.

The Revolving Credit Facility also includes an emissions linked margin adjustment whereby, after the initial applicable margin is set per the margin pricing grid, the margin may be adjusted based on performance in achieving certain agreed annual carbon emissions goals.

(a) Includes the $ 3.1 billion Revolving Facility.

The Revolving Facility was fully drawn in 2020 for a six-month term.

We may continue to re-borrow amounts under the Revolving Facility through August 2024 subject to satisfaction of the conditions in the facility.

The Revolving Facility also includes an emissions linked margin adjustment whereby, after the initial applicable margin is set per the margin pricing grid, the margin may be adjusted based on performance in achieving certain agreed annual carbon emissions goals.

We are required to pay a commitment fee on any undrawn portion.

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On August 6, 2020, Bengochea filed a notice of appeal.

On January 21, 2021, the court continued the trial date in the second Cuba matter to January 31, 2022.

On August 2, 2021, the court continued the trial date in the second Cuba Matter to February 28, 2022.

We continue to believe we have a meritorious defense to these actions and we believe that any liability which may arise as a result of these actions will not have a material impact on our consolidated financial statements.

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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, 2021 and November 30, 2020, we had $ 939 million and $ 423 million, respectively, in reserve funds relating to our customer deposits to satisfy these requirements which are included within other assets.

We expect a portion of new customer deposits to be withheld under these agreements.

Additionally, as of May 31, 2021 and November 30, 2020 we had $ 166 million of cash collateral in escrow, of which $ 136 million is included within prepaid expenses and other.

We have and may continue to be impacted by breaches in data security and lapses in data privacy, which occur from time to time.

As of August 31, 2021, and November 30, 2020, we had $ 1.4 billion and $ 0.4 billion, respectively, in reserve funds related to our customer deposits withheld to satisfy these requirements which are included within other assets.

We continue to expect to provide reserve funds under these agreements.

Additionally, as of August 31, 2021, and November 30, 2020, we had $ 167 million and $ 166 million, respectively, of cash collateral in escrow, of which $ 137 million and $ 136 million is included within prepaid expenses and other.

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 intent from inadvertent events to malicious motivated attacks.

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We determined that the unauthorized third-party gained access to certain personal information relating to some guests, employees and crew for some of our operations.

For the December 2020 event, the investigation and remediation phases are in process and regulators have been notified.

For the December 2020 event, the investigation and remediation phases are in process.

Regulators were notified, and several, including the primary regulatory authority in the European Union, have closed their files on this matter.

We have been contacted by various regulatory agencies regarding these and other cyber incidents.

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To date, we have not been able to reach an agreement with NY DFS.

In addition, State Attorneys General from a number of states are currently investigating a data security event announced in March 2020 and have indicated an intent to seek a negotiated settlement.

In addition, State Attorneys General from a number of states have completed their investigation of a data security event announced in March 2020, and the Company is currently negotiating a settlement with the relevant State Attorneys General.

We continue to work with regulators regarding cyber incidents we have experienced.

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We have been named in a number of individual actions related to COVID-19.

Private parties have brought approximately 72 lawsuits as of June 21, 2021 in several U.S.

Private parties have brought approximately 72 lawsuits as of September 22, 2021 in several U.S.

federal and state courts as well as in France, Italy and Brazil.

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A smaller number of actions include wrongful death claims.

Additionally, as of June 21, 2021, ten purported class actions have been brought by former guests from Ruby Princess , Diamond Princess , Grand Princess , Coral Princess, Costa Luminosa or Zaandam in several U.S.

As of September 22, 2021, 38 of these individual actions have now been dismissed or settled.

These actions were settled for immaterial amounts.

Additionally, as of September 22, 2021, ten purported class actions have been brought by former guests from Ruby Princess , Diamond Princess , Grand Princess , Coral Princess, Costa Luminosa or Zaandam in several U.S.

federal courts and in the Federal Court of Australia.

These actions include tort 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.

As of September 22, 2021, five of these class actions have either been settled individually or had their class allegations dismissed by the courts.

These actions were settled for immaterial amounts.

All COVID-19 actions seek monetary damages and most seek additional punitive damages in unspecified amounts.

As previously disclosed, a consolidated class action complaint with new lead plaintiffs, the New England Carpenters Pension and Guaranteed Annuity Fund and the Massachusetts Laborers' Pension and Annuity Fund, was filed in the U.S.

District Court for the Southern District of Florida on December 15, 2020 on behalf of all purchasers of Carnival Corporation common stock and/or Carnival plc American Depositary Shares, and sellers of put options and purchasers of call options on those securities, between September 16, 2019 and March 31, 2020, alleging violations of Sections 10(b) and 20(a) of the U.S.

Securities and Exchange Act of 1934.

On May 28, 2021, the court dismissed the complaint without prejudice.

Plaintiff's current deadline to file a second amended complaint is July 2, 2021.

District Court for the Southern District of Florida on December 15, 2020.

Plaintiffs filed a second amended complaint on July 2, 2021 and on August 6, 2021, we filed a motion to dismiss .

We continue to take proper actions to defend against the above claims.

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Ship Commitments

As of May 31, 2021, we expect the timing of our new ship growth capital commitments to be as follows:

As of August 31, 2021, we expect the timing of our new ship growth capital commitments to be as follows:

(in millions)

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

May 31, 2021 November 30, 2020

August 31, 2021 November 30, 2020

Value Fair Value Carrying

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(in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

Long-term other assets (a) $ 43 $ — $ 26 $ 19 $ 45 $ — $ 17 $ 18

Total $ 43 $ — $ 26 $ 19 $ 45 $ — $ 17 $ 18

Fixed rate debt (b) $ 19,087 $ — $ 20,880 $ — $ 15,547 $ — $ 16,258 $ —

Floating rate debt (b) 12,389 — 11,872 — 12,034 — 11,412 —

Fixed rate debt (a) $ 19,812 $ — $ 20,470 $ — $ 15,547 $ — $ 16,258 $ —

Floating rate debt (a) 12,152 — 11,432 — 12,034 — 11,412 —

Total $ 31,964 $ — $ 31,902 $ — $ 27,581 $ — $ 27,670 $ —

(a) Long-term other assets are comprised of notes receivable.

The fair values of our Level 2 notes receivable were based on estimated future cash flows discounted at appropriate market interest rates.

The fair values of our Level 3 notes receivable were estimated using risk-adjusted discount rates.

(b) The debt amounts above do not include the impact of interest rate swaps or debt issuance costs.

(a) The debt amounts above do not include the impact of interest rate swaps or debt issuance costs.

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.

1 unchanged sentence

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

May 31, 2021 November 30, 2020

August 31, 2021 November 30, 2020

(in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

8 unchanged sentences

Valuation of Goodwill and Trademarks

As a result of the phased resumption of guest cruise operations and its effect on our expected future operating cash flows, we performed interim discounted cash flow analyses for certain reporting units with goodwill as of May 31, 2021, and determined there was no impairment.

For the three and six months ended May 31, 2020, we recognized goodwill impairment charges of $ 1.4 billion and $ 2.1 billion, respectively.

We also performed trademark impairment reviews and determined there was no impairment to our trademarks.

As of July 31, 2021, we performed our annual goodwill and trademark impairment reviews and determined there was no impairment for goodwill or trademarks.

There was no impairment for the three months ended August 31, 2020.

We recognized goodwill impairment charges of $ 2.1 billion for the nine months ended August 31, 2020.

The determination of the fair value of our reporting units’ goodwill and trademarks includes numerous assumptions that are subject to various risks and uncertainties.

The effect of COVID-19 and the phased resumption have created some uncertainty in forecasting the operating results and future cash flows used in our impairment analyses.

The effect of COVID-19 and the gradual resumption have created some uncertainty in forecasting the operating results and future cash flows used in our impairment analyses.

We believe that we have made reasonable estimates and judgments.

1 unchanged sentence

The principal assumptions, all of which are considered Level 3 inputs, used in our cash flow analyses consisted of:

• The timing of our return to service, changes in market conditions and port or other restrictions

• The pace of our return to service, changes in market conditions and port or other restrictions

• Forecasted revenues net of our most significant variable costs, which are travel agent commissions, costs of air and other transportation, and certain other costs that are directly associated with onboard and other revenues including credit and debit card fees

7 unchanged sentences

Foreign currency translation adjustment — 4 3

May 31, 2021 $ 579 $ 239 $ 818

August 31, 2021 $ 579 $ 231 $ 810

(a) North America and Australia ( “ NAA”)

4 unchanged sentences

Foreign currency translation adjustment — 4 3

May 31, 2021 $ 927 $ 265 $ 1,192

August 31, 2021 $ 927 $ 256 $ 1,183

Impairment of Ships

We review our long-lived assets for impairment whenever events or circumstances indicate potential impairment.

As a result of the effect of COVID-19 on our business, we determined that one ship, which we expect to dispose of, had a net carrying value that exceeded its estimated undiscounted future cash flows as of May 31, 2021.

We determined the fair value of this ship based on its estimated selling value.

As of August 31, 2021, as a result of the continued effect of COVID-19 on our business and our updated expectations for certain of our ships, we determined that these ships had net carrying values that exceeded their respective estimated undiscounted future cash flows.

As of May 31, 2021, we also determined that one ship, which we subsequently sold, had a net carrying value that exceeded its estimated undiscounted future cash flows.

We determined the fair value of these ships based on their estimated selling values.

We believe that we have made reasonable estimates and judgments.

4 unchanged sentences

• Timing of the sale of ships and estimated proceeds

We recognized a ship impairment charge of $ 49 million in our EA segment for both the three and six months ended May 31, 2021 .

For the three months ended May 31, 2020, we recognized $ 348 million and $ 150 million of ship impairment charges in our NAA and EA segments respectively, and $ 520 million and $ 308 million of ship impairment charges in our NAA and EA segments, respectively for the six months ended May 31, 2020.

These impairments are included in other operating expenses of our Consolidated Statements of Income (Loss).

The impairment charges summarized in the table below are included in ship and other impairments in our Consolidated Statements of Income (Loss).

Three Months Ended

August 31, Nine Months Ended

(in millions) 2021 2020 2021 2020

NAA Segment $ 273 $ 836 $ 273 $ 1,356

EA Segment 202 2 251 311

Total ship impairments $ 475 $ 838 $ 524 $ 1,667

Refer to Note 1 - “ General, COVID-19 and the Use of Estimates and Risks and Uncertainty ” for additional discussion.

Derivative Instruments and Hedging Activities

(in millions) Balance Sheet Location May 31, 2021 November 30, 2020

(in millions) Balance Sheet Location August 31, 2021 November 30, 2020

Derivative liabilities

4 unchanged sentences

(a) We have interest rate swaps designated as cash flow hedges whereby we receive floating interest rate payments in exchange for making fixed interest rate payments.

These interest rate swap agreements effectively changed $ 212 million at May 31, 2021 and $ 248 million at November 30, 2020 of EURIBOR-based floating rate euro debt to fixed rate euro debt.

At May 31, 2021, these interest rate swaps settle through 2025.

These interest rate swap agreements effectively changed $ 192 million at August 31, 2021 and $ 248 million at November 30, 2020 of EURIBOR-based floating rate euro debt to fixed rate euro debt.

At August 31, 2021, these interest rate swaps settle through 2025.

Our derivative contracts include rights of offset with our counterparties.

We have elected to net certain of our derivative assets and liabilities within counterparties.

August 31, 2021

(in millions) Gross Amounts Gross Amounts Offset in the Balance Sheet Total Net Amounts Presented in the Balance Sheet Gross Amounts not Offset in the Balance Sheet Net Amounts

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Liabilities $ 10 $ — $ 10 $ — $ 10

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

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

Three Months Ended August 31, Nine Months Ended

(in millions) 2021 2020 2021 2020

30 unchanged sentences

We partially mitigate the currency exposure of our investments in foreign operations by designating a portion of our foreign currency debt and derivatives as hedges of these investments.

As of May 31, 2021, we have designated $ 497 million of our sterling-denominated debt as non-derivative hedges of our net investments in foreign operations.

For the three and six months ended May 31, 2021, we recognized $ 8 million and $ 50 million of losses on these non-derivative net investment hedges in the cumulative translation adjustment section of other comprehensive income (loss).

As of August 31, 2021, we have designated $ 481 million of our sterling-denominated debt as non-derivative hedges of our net investments in foreign operations.

For the three and nine months ended August 31, 2021, we recognized $ 15 million of gains and $ 35 million of losses, respectively, on these non-derivative net investment hedges in the cumulative translation adjustment section of other comprehensive income (loss).

We also have $ 9.5 billion of euro-denominated debt, which provides an economic offset for our operations with euro functional currency.

2 unchanged sentences

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.

We use foreign currency derivative contracts to manage foreign currency exchange rate risk for some of our ship construction payments.

At May 31, 2021, our remaining newbuild currency exchange rate risk primarily relates to euro-denominated newbuild contract payments to non-euro functional currency brands, which represent a total unhedged commitment of $ 6.8 billion for newbuilds scheduled to be delivered through 2025.

We have used foreign currency derivative contracts to manage foreign currency exchange rate risk for some of our ship construction payments.

At August 31, 2021, our remaining newbuild currency exchange rate risk primarily relates to euro-denominated newbuild contract payments to non-euro functional currency brands, which represent a total unhedged commitment of $ 8.4 billion for newbuilds scheduled to be delivered through 2025.

The cost of shipbuilding orders that we may place in the future that is denominated in a different currency than our cruise brands’ will be affected by foreign currency exchange rate fluctuations.

5 unchanged sentences

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 equivalents, investments, notes receivables, future financing facilities, contingent obligations, derivative instruments, insurance contracts, long-term ship charters and new ship progress payment guarantees, by:

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

• Conducting business with well-established financial institutions, insurance companies and export credit agencies

2 unchanged sentences

• Generally requiring collateral and/or guarantees to support notes receivable on significant asset sales, long-term ship charters and new ship progress payments to shipyards

At May 31, 2021, our exposures under derivative instruments were not material.

At August 31, 2021, our exposures under derivative instruments were not material.

We also monitor the creditworthiness of travel agencies and tour operators in Asia, Australia and Europe, which includes charter-hire agreements in Asia and credit and debit card providers to which we extend credit in the normal course of our business.

10 unchanged sentences

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,

Three Months Ended August 31,

(in millions) Revenues Operating costs and

8 unchanged sentences

$ 546 $ 1,616 $ 425 $ 562 $ ( 2,057 )

NAA $ 457 $ 1,631 $ 297 $ 369 $ ( 2,860 ) (a)

EA 238 773 126 168 ( 1,174 ) (b)

NAA $ 15 $ 1,292 $ 144 $ 348 $ ( 1,770 )

EA ( 4 ) 225 71 165 ( 465 )

Cruise Support 1 12 44 32 ( 86 )

1 unchanged sentence

$ 31 $ 1,549 $ 265 $ 551 $ ( 2,333 )

(a) Includes $ 1.0 billion of goodwill impairment charges.

(b) Includes $ 345 million of goodwill impairment charges.

Six Months Ended May 31,

Nine Months Ended August 31,

(in millions) Revenues Operating costs and

8 unchanged sentences

$ 621 $ 2,832 $ 1,305 $ 1,681 $ ( 5,196 )

NAA $ 3,597 $ 3,904 $ 697 $ 733 $ ( 3,056 ) (c)

EA 1,790 2,090 333 334 ( 1,743 ) (d)

NAA $ 3,612 $ 5,197 $ 841 $ 1,081 $ ( 4,827 ) (a)

EA 1,785 2,314 404 499 ( 2,208 ) (b)

Cruise Support 67 ( 22 ) 170 96 ( 177 )

1 unchanged sentence

$ 5,561 $ 7,556 $ 1,435 $ 1,698 $ ( 7,223 )

(d) Includes $ 777 million of goodwill impairment charges.

(a) Includes $ 1.3 billion of goodwill impairment charges.

(b) Includes $ 777 million of goodwill impairment charges.

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

(in millions) Three Months Ended May 31, 2020 Six Months Ended May 31, 2020

(in millions) Nine Months Ended August 31, 2020

North America $ 3,065

Europe 250 1,616

Australia and Asia 681

$ 740 $ 5,529

As a result of the phased resumption of our guest cruise operations, we have experienced essentially no revenue for the three and six months ended May 31, 2021, as a result current year data is not meaningful and is not included in the table.

As a result of the gradual resumption of our guest cruise operations, we have experienced a minimal amount of revenue for the three and nine months ended August 31, 2021 and the three months ended August 31, 2020.

As a result, current year data is not meaningful and is not included in the table.

NOTE 7 – Earnings Per Share

Three Months Ended

May 31, Six Months Ended

August 31, Nine Months Ended

(in millions, except per share data) 2021 2020 2021 2020

7 unchanged sentences

Three Months Ended

May 31, Six Months Ended

August 31, Nine Months Ended

(in millions) 2021 2020 2021 2020

2 unchanged sentences

Total antidilutive securities 56 186 57 103

Equity Offering

In February 2021, we completed a public offering of 40.5 million shares of Carnival Corporation’s common stock at a price per share of $ 25.10 , resulting in net proceeds of $ 996 million.

NOTE 8 – Supplemental Cash Flow Information

(in millions) May 31, 2021 November 30, 2020

(in millions) August 31, 2021 November 30, 2020

Cash and cash equivalents (Consolidated Balance Sheets) $ 7,151 $ 9,513

5 unchanged sentences

As a result of our assessment, we recognized an impairment charge of $ 17 million for our investment in White Pass in other income (expense), net.

As of May 31, 2021, our investment in White Pass was $ 77 million, consisting of $ 53 million in equity and a loan of $ 23 million.

As of August 31, 2021, our investment in White Pass was $ 76 million, consisting of $ 51 million in equity and a loan of $ 25 million.

As of November 30, 2020, our investment in White Pass was $ 94 million, consisting of $ 75 million in equity and a loan of $ 19 million.

We have a minority interest in CSSC Carnival Cruise Shipping Limited (“CSSC-Carnival”), a China-based cruise company which will operate its own fleet designed to serve the Chinese market.

Our investment in CSSC-Carnival was $ 229 million as of May 31, 2021 and $ 140 million as of November 30, 2020.

Our investment in CSSC-Carnival was $ 207 million as of August 31, 2021 and $ 140 million as of November 30, 2020.

In December 2019, we sold to CSSC-Carnival a controlling interest in an entity with full ownership of two EA segment ships and recognized a related gain of $ 107 million, included in other operating expenses in our Consolidated Statements of Income (Loss).

1 unchanged sentence

NOTE 10 – Property and Equipment

Since the pause in guest cruise operations, we have accelerated the removal of ships which were previously expected to be sold over the ensuing years.

During 2021, we completed the sale of one NAA segment ship, which represents a passenger-capacity reduction of 670 for our NAA segment.

During 2021, we completed the sale of one NAA segment ship, which represents a passenger-capacity reduction of 670 for our NAA segment and one EA segment ship, which represents a passenger-capacity reduction of 1,180 for our EA segment.

NOTE 11 – Shareholders' Equity

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 (the “Stock Swap Program”).

During the three and nine months ended August 31, 2021, under the Stock Swap Program, we sold 4.6 million shares of Carnival Corporation's common stock and repurchased the same amount of Carnival plc ordinary shares resulting in net proceeds of $ 10 million, which were used for general corporate purposes.

During 2020, there were no sales or repurchases under the Stock Swap Program.

Equity Offering

In February 2021, we completed a public offering of 40.5 million shares of Carnival Corporation’s common stock at a price per share of $ 25.10 , resulting in net proceeds of $ 996 million.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements