What changed in this filing

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Item 1. Financial Statements

2023-03-29 compared with 2022-09-30 · 201 added, 292 removed, 414 unchanged (54% of the section changed)

3 unchanged sentences

(in millions, except per share data)

Three Months Ended August 31, Nine Months Ended

2022 2021 2022 2021

Three Months Ended February 28,

Passenger ticket $ 2,870 $ 873

Onboard and other 1,563 750

4,305 546 8,329 621

Operating Costs and Expenses

Operating Expenses

Commissions, transportation and other 655 251

1 unchanged sentence

Payroll and related 582 506

Fuel 668 182 1,577 398

Food 259 52 586 80

Ship and other impairments — 8

Other operating 743 557

3,379 1,616 8,092 2,832

Cruise and tour operating expenses 3,311 2,030

Selling and administrative 712 530

Depreciation and amortization 582 554

4,585 2,603 11,573 5,817

Operating Income (Loss) ( 172 ) ( 1,491 )

2 unchanged sentences

Interest expense, net of capitalized interest ( 539 ) ( 368 )

Gain (loss) on debt extinguishment, net — ( 376 ) — ( 372 )

Other income (expense), net ( 30 ) ( 32 )

10 unchanged sentences

(in millions)

Three Months Ended August 31, Nine Months Ended

2022 2021 2022 2021

Three Months Ended February 28,

Net Income (Loss) $ ( 693 ) $ ( 1,891 )

1 unchanged sentence

Change in foreign currency translation adjustment ( 3 ) 13

Other 1 1 6 8

Other Comprehensive Income (Loss) 11 16

7 unchanged sentences

Cash and cash equivalents $ 5,455 $ 4,029

Short-term investments — 200

Restricted cash 15 1,988

Trade and other receivables, net 514 395

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Shareholders’ Equity

Common stock of Carnival Corporation, $ 0.01 par value;

Carnival Corporation common stock, $ 0.01 par value;

1,960 shares authorized;

1,246 shares at 2023 and 1,244 shares at 2022 issued

Ordinary shares of Carnival plc, $ 1.66 par value;

Carnival plc ordinary shares, $ 1.66 par value;

217 shares at 2023 and 2022 issued

Additional paid-in capital 16,635 16,872

Retained earnings 1,868 6,448

Retained earnings (accumulated deficit) ( 434 ) 269

Accumulated other comprehensive income (loss) (“AOCI”) ( 1,972 ) ( 1,982 )

7 unchanged sentences

(in millions)

Nine Months Ended August 31, 2022

Three Months Ended

OPERATING ACTIVITIES

3 unchanged sentences

Impairments — 8

(Gain) loss on debt extinguishment — 372

(Income) loss from equity-method investments 11 11

14 unchanged sentences

Purchases of property and equipment ( 1,075 ) ( 2,730 )

Proceeds from sales of ships and other 55 351

Purchase of minority interest ( 1 ) ( 90 )

Proceeds from sales of ships 23 18

Purchase of short-term investments — ( 315 )

Proceeds from maturity of short-term investments 515 2,026

Derivative settlements and other, net 38 ( 29 )

Other, net 8 ( 6 )

Net cash provided by (used in) investing activities ( 1,044 ) ( 3,032 )

2 unchanged sentences

Principal repayments of long-term debt ( 679 ) ( 503 )

Premium paid on extinguishment of debt — ( 286 )

Proceeds from issuance of long-term debt 830 2,347

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capital Retained

earnings AOCI Treasury

earnings (accumulated deficit) AOCI Treasury

stock Total shareholders’ equity

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

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

Share-based compensation and other — — 28 — — — 28

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

At May 31, 2022 $ 11 $ 361 $ 15,457 $ 2,649 $ ( 1,742 ) $ ( 8,476 ) $ 8,260

At November 30, 2021 $ 11 $ 361 $ 15,292 $ 6,448 $ ( 1,501 ) $ ( 8,466 ) $ 12,144

Net income (loss) — — — ( 1,891 ) — — ( 1,891 )

1 unchanged sentence

Issuances of common stock, net — — 15 — — — 15

Purchases and issuances under the Stock Swap program, net — — 27 — — ( 25 ) 2

Issuance of treasury shares for vested share-based awards — — — ( 63 ) — 63 —

Share-based compensation and other — — 26 — — — 26

At August 31, 2022 $ 12 $ 361 $ 16,626 $ 1,868 $ ( 2,024 ) $ ( 8,464 ) $ 8,379

Nine Months Ended

stock Ordinary

shares Additional

capital Retained

earnings AOCI Treasury

stock Total shareholders’ equity

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

Net income (loss) — — — ( 6,881 ) — — ( 6,881 )

Other comprehensive income (loss) — — — — 87 — 87

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

Share-based compensation and other — — 88 — — — 88

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

At February 28, 2022 $ 11 $ 361 $ 15,360 $ 4,493 $ ( 1,486 ) $ ( 8,428 ) $ 10,311

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) — — — ( 693 ) — — ( 693 )

Other comprehensive income (loss) — — — — 11 — 11

Issuances of common stock, net 1 — 1,178 — — — 1,180

Purchases and issuances under the Stock Swap program, net — — 89 — — ( 82 ) 8

Issuance of treasury shares for vested share-based awards — — ( 36 ) — — 36 —

Share-based compensation and other — — 28 — — ( 1 ) 27

At August 31, 2022 $ 12 $ 361 $ 16,626 $ 1,868 $ ( 2,024 ) $ ( 8,464 ) $ 8,379

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

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

(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.

CARNIVAL CORPORATION & PLC

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Liquidity and Management’s Plans

In the face of the global impact of COVID-19, we paused our guest cruise operations in mid-March 2020 and began resuming guest cruise operations in 2021.

As of August 31, 2022, 93 % of our capacity was serving guests.

COVID-19 and its ongoing effects, inflation, higher fuel prices and higher interest rates are collectively having a material impact on our business, including our results of operations, liquidity and financial position.

The extent of the collective impact of such items is uncertain and will depend on future developments, including the length of time it takes to return the company to profitability.

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:

• Continued resumption of guest cruise operations

• Expected increases in revenue in 2023 on a per passenger basis compared to 2019, particularly with the relaxation of COVID-19 related protocols aligning towards land-based vacation alternatives

• Expected improvement in occupancy on a year-over-year basis returning to historical levels during 2023

• Expected moderation of fuel prices continuing into the fourth quarter of 2022 and 2023

• Expected inflation and supply chain challenges to continue to weigh on costs, though moderated by a larger, more efficient fleet as compared to 2019

• Maintaining collateral and reserves at reasonable levels

In the face of the global impact of COVID-19, we paused our guest cruise operations in March 2020 and began resuming guest cruise operations in 2021.

As part of our liquidity management, we rely on estimates of our future liquidity, which includes numerous assumptions that are subject to various risks and uncertainties.

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

• Our continued cruise operations and expected timing of cash collections for cruise bookings

• Expected increases in revenue in 2023 on a per passenger basis compared to 2019

• Expected improvement in occupancy on a year-over-year basis returning to historical levels in the summer of 2023

• Stabilization of fuel prices around or below November 2022 year-end prices

• Continued stabilization of inflationary pressures on costs compared to 2022, moderated by a larger-more efficient fleet as compared to 2019

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

We cannot make assurances that our assumptions used to estimate our liquidity requirements may not change because we have never previously experienced a complete cessation and subsequent resumption of our guest cruise operations, and as a consequence, our ability to be predictive is uncertain.

In addition, the effects of the COVID-19 global pandemic, inflation, higher fuel prices and higher interest rates are uncertain.

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

We took, and may continue as appropriate to take, 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.

We expect to continue to address maturities well in advance and obtain relevant financial covenant amendments or waivers, as needed.

Based on these actions and our assumptions, considering our $ 7.4 billion of liquidity including cash and borrowings available under our $ 1.7 billion, € 1.0 billion and £ 0.2 billion multi-currency revolving credit facility (the “Revolving Facility”) at August 31, 2022, as well as our continued return to service, we have concluded that we have sufficient liquidity to satisfy our obligations for at least the next twelve months.

We have a substantial debt balance as a result of the pause in guest cruise operations and require a significant amount of liquidity or cash provided by operating activities to service our debt.

In addition, the continued effects of the pandemic, inflation, higher fuel prices, higher interest rates and fluctuations in foreign currency rates are collectively having a material negative impact on our financial results.

The full extent of the collective impact of these items is uncertain and may be amplified by our substantial debt balance.

We believe we have made reasonable estimates and judgments of the impact of these events within our consolidated financial statements and there may be changes to those estimates in future periods.

For the past three years we have taken appropriate actions to manage our liquidity, including completing various capital market transactions, obtaining relevant financial covenant amendments or waivers (see Note 3 - “Debt”), accelerating the removal of certain ships from the fleet, and during the pause, reducing capital expenditures and operating expenses.

As of February 28, 2023, our return to guest cruise operations was essentially complete.

Based on these actions and our assumptions, and considering our $ 8.1 billion of liquidity including cash and cash equivalents and borrowings available under our $ 1.7 billion, € 1.0 billion and £ 0.2 billion multi-currency revolving credit facility (the “Revolving Facility”) at February 28, 2023, we believe that we have sufficient liquidity to fund our obligations and expect to remain in compliance with our financial covenants for at least the next twelve months from the issuance of these financial statements.

We will continue to pursue various opportunities to refinance future debt maturities and/or to extend the maturity dates associated with our existing indebtedness and obtain relevant financial covenant amendments or waivers, if needed.

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 nine months ended August 31, 2022 and 2021, the Consolidated Statements of Cash Flows for the nine months ended August 31, 2022 and 2021 and the Consolidated Balance Sheet at August 31, 2022 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), the Consolidated Statements of Cash Flows and the Consolidated Statements of Shareholders’ Equity for the three months ended February 28, 2023 and 2022, and the Consolidated Balance Sheet at February 28, 2023 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 2022 joint Annual Report on Form 10-K (“Form 10-K”) filed with the U.S.

Securities and Exchange Commission on January 27, 2023.

Our operations are seasonal and results for interim periods are not necessarily indicative of the results for the entire year.

Use of Estimates and Risks and Uncertainty

1 unchanged sentence

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, inflation, higher fuel prices and higher interest rates 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 uncertain.

The full extent to which the effects of the pandemic, inflation, higher fuel prices, higher interest rates and fluctuations in foreign currency rates will directly or indirectly impact our business, operations, results of operations and financial condition, including our valuation of goodwill and trademarks, impairment of ships and collectability of trade and notes receivables, will depend on future developments that are uncertain.

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.

Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU No.

2020-04”), which provides temporary optional expedients and exceptions to accounting guidance on contract modifications and hedge accounting to ease entities’ financial reporting burdens as the market transitions from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates.

ASU 2020-04 is effective upon issuance and can be applied through December 31, 2022.

In March 2020, the Financial Accounting Standards Board (“FASB”) issued guidance, Reference Rate Reform:

Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides temporary optional expedients and exceptions to accounting guidance on contract modifications and hedge accounting to ease entities’ financial reporting burdens as the market transitions from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates.

In December 2022, the FASB deferred the date through which this guidance can be applied from December 31, 2022 to December 31, 2024.

The use of LIBOR was phased out at the end of 2021, although the phase-out of U.S.

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We continue to monitor developments related to the LIBOR transition and identification of an alternative, market-accepted rate.

In December 2021, we amended our £ 350 million long-term debt agreement which referenced the British Pound sterling (“GBP”) LIBOR to the Sterling Overnight Index Average (“SONIA”) and applied the practical expedient.

This amendment did not have a material impact on our consolidated financial statements.

As of August 31, 2022, approximately $ 8.4 billion of our outstanding indebtedness bears interest at floating rates referenced to U.S.

As of February 28, 2023, approximately $ 5.8 billion of our outstanding indebtedness bears interest at floating rates referenced to U.S.

dollar LIBOR with maturity dates extending beyond June 30, 2023.

6 unchanged sentences

The guidance also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include the effect of share settlement for instruments that may be settled in cash or shares, except for certain liability-classified share-based payment awards.

We will adopt this guidance in the first quarter of 2023 using the modified retrospective approach.

We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

On December 1, 2022, we adopted this guidance using the modified retrospective approach to recognize our convertible notes as single unit liability instruments, as they do not qualify as derivatives under ASC 815 and were not issued at a substantial premium.

Accordingly, upon adoption we recorded a $ 239 million increase to debt, primarily as a result of the reversal of the remaining non-cash convertible debt discount, as well as a reduction of $ 229 million to additional paid in capital.

The cumulative effect of the adoption of this guidance resulted in a $ 10 million decrease to retained earnings.

In September 2022, the 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.

This guidance is expected to improve financial reporting by requiring new disclosures about the programs, thereby allowing financial statement users to better consider the effect of the programs on an entity’s working capital, liquidity, and cash flows.

This guidance is effective for fiscal years beginning after December 15, 2022, except for the amendment on roll forward information which is effective for fiscal years beginning after December 15, 2023.

We are currently evaluating the impact of the new guidance on the disclosures to our consolidated financial statements.

NOTE 2 – Revenue and Expense Recognition

Guest cruise deposits and advance onboard purchases are initially included in customer deposit liabilities when received.

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.

8 unchanged sentences

The fees, taxes and charges that vary with guest head counts and are directly imposed on a revenue-producing arrangement are expensed in commissions, transportation and other costs when the corresponding revenues are recognized.

For the three and nine months ended August 31, fees, taxes, and charges included in commissions, transportation and other costs were $ 141 million and $ 305 million in 2022 and were $ 16 million and $ 28 million in 2021.

For the three months ended February 28, 2023 and 2022, fees, taxes, and charges included in commissions, transportation and other costs were $ 172 million and $ 68 million.

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

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

We had total customer deposits of $ 4.8 billion as of August 31, 2022 and $ 3.5 billion as of November 30, 2021 .

We had total customer deposits of $ 5.7 billion as of February 28, 2023 and $ 5.1 billion as of November 30, 2022, w hich includes approximately $ 174 million of unredeemed FCCs as of February 28, 2023, of which approximately $ 124 million are refundable.

Given the uncertainty of travel demand caused by COVID-19 and lack of comparable historical experience of FCC redemptions, we are unable to estimate the amount of FCCs that will be used in future periods or that may be refunded.

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

During the nine months ended August 31, 2022 and 2021, we recognized revenues of $ 1.7 billion and an immaterial amount related to our customer deposits as of November 30, 2021 and 2020.

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

During the three months ended February 28, 2023 and 2022, we recognized revenues of $ 2.8 billion and $ 1.0 billion related to our customer deposits as of November 30, 2022 and 2021.

Our customer deposits balance changes due to the seasonal nature of cash collections, the recognition of revenue, refunds of customer deposits and foreign currency changes.

Trade and Other Receivables

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These reserve funds are included in other assets.

Contract Assets

Contract assets are amounts paid prior to the start of a voyage as a result of obtaining the ticket contract and include prepaid travel agent commissions and prepaid credit and debit card fees.

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 contract assets of $ 191 million as of August 31, 2022 and $ 55 million as of November 30, 2021 .

We had incremental costs of obtaining contracts with customers recognized as assets o f $ 228 million as of February 28, 2023 and $ 218 million as of November 30, 2022 .

NOTE 3 – Debt

August 31, November 30,

February 28, November 30,

(in millions) Maturity Rate (a) (b) 2023 2022

Secured Subsidiary Guaranteed

Notes Feb 2026 10.5 % $ 775 $ 775

3 unchanged sentences

Notes Aug 2028 4.0 % 2,406 2,406

EUR fixed rate Nov 2022 5.5 % - 6.2 %

EUR floating rate Nov 2022 - Jun 2025 EURIBOR + 2.7 % - 3.8 %

EUR floating rate Jun 2025 EURIBOR + 3.8 %

Floating rate Jun 2025 - Oct 2028 LIBOR + 3.0 - 3.3 %

Total Secured Debt 9,704 9,939

Unsecured Debt

Total Secured Subsidiary Guaranteed 9,634 9,621

Senior Priority Subsidiary Guaranteed

Notes May 2028 10.4 % 2,030 2,030

Unsecured Subsidiary Guaranteed

Facility (c) LIBOR + 0.7 %

EUR Notes Nov 2022 1.9 % 550 622

Convertible Notes Apr 2023 5.8 % 96 96

Notes Oct 2023 7.2 % 125 125

Convertible Notes Oct 2024 5.8 % 426 426

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Notes Mar 2027 5.8 % 3,500 3,500

Notes Jan 2028 6.7 % 200 200

Convertible Notes Dec 2027 5.8 % 1,131 1,131

Notes May 2029 6.0 % 2,000 2,000

EUR Notes Oct 2029 1.0 % 600 679

Notes Jun 2030 10.5 % 1,000 1,000

Floating rate Feb 2023 - Sep 2024 LIBOR + 3.8 % - 4.5 %

Floating rate Jul 2024 - Sep 2024 LIBOR + 3.8 %

GBP floating rate Feb 2025 SONIA + 0.9 % (d)

EUR floating rate Dec 2021 - Mar 2026 EURIBOR + 1.8 % - 4.8 %

EUR floating rate Apr 2023 - Mar 2026 EURIBOR + 1.8 - 2.4 %

Export Credit Facilities

Floating rate Feb 2022 - Dec 2031 LIBOR + 0.5 % - 1.5 %

Floating rate Oct 2024 - Dec 2031 LIBOR + 0.8 - 1.5 %

Fixed rate Aug 2027 - Dec 2032 2.4 - 3.4 %

EUR floating rate Feb 2022 - Dec 2033 EURIBOR + 0.2 % - 1.6 %

EUR fixed rate Feb 2031 - Jan 2034 1.1 % - 1.6 %

Total Unsecured Debt 25,104 24,031

EUR floating rate Mar 2023 - Nov 2034 EURIBOR + 0.2 - 1.6 %

EUR fixed rate Feb 2031 - Dec 2034 1.1 - 3.1 %

Total Unsecured Subsidiary Guaranteed 23,342 23,019

Unsecured Notes (No Subsidiary Guarantee)

Notes Oct 2023 7.2 % 125 125

Notes Jan 2028 6.7 % 200 200

EUR Notes Oct 2029 1.0 % 633 620

Total Unsecured Notes (No Subsidiary Guarantee) 958 945

Total Debt 35,963 35,615

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Long-Term Debt $ 32,672 $ 31,953

(a) Substantially all of our variable debt has a 0.0 % to 0.75 % floor.

(b) The above debt table does not include the impact of our interest rate swaps and as of November 30, 2021, it also excludes the impact of our foreign currency swaps.

As of August 31, 2022, we had no foreign currency swaps.

(a) The reference rates for substantially all of our LIBOR and EURIBOR based variable debt have 0.0 % to 0.75 % floors.

(b) The above debt table excludes the impact of our interest rate swaps and as of February 28, 2023, it also excludes the impact of our foreign currency swaps.

As of November 30, 2022, we had no foreign currency swaps.

The interest rates on some of our debt, including our Revolving Facility, fluctuate based on the applicable rating of senior unsecured long-term securities of Carnival Corporation or Carnival plc.

See “Short-Term Borrowings” below.

(d) The interest rate for the GBP unsecured loan is subject to a credit adjustment spread ranging from 0.03 % to 0.28 %.

The referenced SONIA rate with the credit adjustment spread is subject to a 0 % floor.

Carnival Corporation and/or Carnival plc is the primary obligor of all our outstanding debt excluding $ 0.5 billion under a term loan facility of Costa Crociere S.p.A.

(“Costa”), a subsidiary of Carnival plc, and $ 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.

All 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

As of February 28, 2023, the scheduled maturities of our debt are as follows:

(in millions)

Year Principal Payments

2Q 2023 (a) $ 785

2024 (a) (b) 2,734

Thereafter 16,611

Total $ 35,963

(a) Subsequent to February 28, 2023, we extended the maturity of $ 211 million of principal payments from second quarter 2023 to 2024.

(b) Includes borrowings of $ 0.2 billion under our Revolving Facility.

Short-Term Borrowings

As of February 28, 2023 and November 30, 2022, our short-term borrowings consisted of $ 0.2 billion under our Revolving Facility.

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

We had $ 0.3 billion available for borrowing under our Revolving Facility as of August 31, 2022.

We had $ 2.6 billion available for borrowing under our Revolving Facility as of February 28, 2023.

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 unutilized portion.

(d) As of August 31, 2022 the interest rate for the GBP unsecured loan was linked to SONIA and subject to a credit adjustment spread ranging from 0.03 % to 0.28 %.

As of November 30, 2021, this loan was referenced to GBP LIBOR.

Carnival Corporation and/or Carnival plc is the primary obligor of all of our debt, with the exception of $ 0.6 billion of debt for which our subsidiary Costa Crociere S.p.A.

is the primary obligor, and which is guaranteed by Carnival Corporation and Carnival plc.

Short-Term Borrowings

As of August 31, 2022 and November 30, 2021, our short-term borrowings consisted of $ 2.7 billion and $ 2.8 billion under our Revolving Facility.

New Revolving Facility

In February 2023, Carnival Holdings (Bermuda) II Limited (“Carnival Holdings II”) entered into a $ 2.1 billion multi-currency revolving facility (“New Revolving Facility”).

The New Revolving Facility may be utilized beginning on August 6, 2024, and will replace the existing Revolving Facility upon its maturity in August 2024.

The termination date of the New Revolving Facility is August 6, 2025, subject to two, mutual one-year extension options.

The new facility also contains an accordion

feature, allowing for additional commitments, up to an aggregate of $ 2.9 billion, which are the aggregate commitments under our Revolving Facility.

Borrowings under the New Revolving Facility will bear interest at a rate of term SOFR, in relation to any loan in U.S.

dollars, EURIBOR, in relation to any loan in euros or daily compounding SONIA, in relation to any loan in sterling, plus a margin based on the long-term credit ratings of Carnival Corporation.

The New 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.

In addition, we are required to pay certain fees on the aggregate unused commitments under the New Revolving Facility and the Revolving Facility.

In connection with the New Revolving Facility, Carnival Corporation, Carnival plc and its subsidiaries will contribute three unencumbered vessels (net book value of $ 2.9 billion as of February 28, 2023) to Carnival Holdings II (which must be completed no later than February 28, 2024).

Each of the vessels will continue to be operated under one of the Carnival Corporation & plc brands.

Carnival Holdings II does not guarantee our other outstanding debt.

Export Credit Facility Borrowings

During the nine months ended August 31, 2022, we borrowed $ 2.3 billion under export credit facilities due in semi-annual installments through 2034.

As of August 31, 2022, the net book value of the vessels subject to negative pledges was $ 13.0 billion.

Our secured debt is secured on either a first or second-priority basis, depending on the instrument, by certain collateral, which includes vessels and certain assets related to those vessels and material intellectual property (combined net book value of approximately $ 24.0 billion, including $ 22.4 billion related to vessels and certain assets related to those vessels) as of August 31, 2022 and certain other assets.

2030 Senior Unsecured Notes

In May 2022, we issued an aggregate principal amount of $ 1.0 billion senior unsecured notes that mature on June 1, 2030 (the “2030 Senior Unsecured Notes”).

The 2030 Senior Unsecured Notes bear interest at a rate of 10.5 % per year.

Convertible Notes

In 2020, we issued $ 2.0 billion aggregate principal amount of 5.75 % convertible senior notes due 2023 (the “2023 Convertible Notes”).

The 2023 Convertible Notes mature on April 1, 2023, unless earlier repurchased or redeemed by us or earlier converted in accordance with their terms prior to the maturity date.

Since April 2020, we repurchased, exchanged and converted a portion of the 2023 Convertible Notes which resulted in a decrease of the principal amount of the 2023 Convertible Notes to $ 0.2 billion.

In August 2022, we issued $ 339 million aggregate principal amount of 5.75 % convertible senior notes due 2024 (the “2024 Convertible Notes” and, together with the 2023 Convertible Notes, the “Convertible Notes”) pursuant to privately-negotiated non-cash exchange agreements with certain holders of the 2023 Convertible Notes, pursuant to which such holders agreed to exchange their 2023 Convertible Notes for an equal amount of 2024 Convertible Notes.

The 2024 Convertible Notes mature on

October 1, 2024, unless earlier repurchased or redeemed by us or earlier converted in accordance with their terms prior to the maturity date.

The Convertible Notes are convertible by holders, subject to the conditions described within the respective indentures that govern the Convertible Notes, into cash, shares of Carnival Corporation common stock, or a combination thereof, at our election.

The Convertible Notes have an initial conversion rate of 100 shares of Carnival Corporation common stock per $ 1,000 principal amount of the Convertible Notes, equivalent to an initial conversion price of $ 10 per share of common stock.

The initial conversion price of the Convertible Notes is subject to certain anti-dilutive adjustments and may also increase if such Convertible Notes are converted in connection with a tax redemption or certain corporate events.

The 2024 Convertible Notes were convertible from the date of issuance of the 2024 Convertible Notes until August 31, 2022, and thereafter may become convertible if certain conditions are met.

As of August 31, 2022, no condition allowing holders of the 2023 Convertible Notes or the 2024 Convertible Notes to convert had been met and therefore the Convertible Notes are not convertible.

We may redeem the 2023 Convertible Notes, in whole but not in part, at any time on or prior to December 31, 2022 at a redemption price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest to the redemption date, if we or any guarantor would have to pay any additional amounts on the 2023 Convertible Notes due to a change in tax laws, regulations or rulings or a change in the official application, administration or interpretation thereof.

We may redeem the 2024 Convertible Notes, in whole but not in part, at any time on or prior to June 30, 2024 at a redemption price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest to the redemption date, if we or any guarantor would have to pay any additional amounts on the 2024 Convertible Notes due to a change in tax laws, regulations or rulings or a change in the official application, administration or interpretation thereof.

We account for the Convertible Notes as separate liability and equity components.

We determined the car rying amount of the liability component as the present value of its cash flows.

The carrying amount of the equity component representing the conversion option was $ 286 million on the date of issuance of the 2023 Convertible Notes and was calculated by deducting the carrying value of the liability component from the initial proceeds from the 2023 Convertible Notes.

The carrying amount of the equity component was reduced to zero in conjunction with the partial repurchase of Convertible Notes in August 2020 because at the time of repurchase, the fair value of the equity component for the portion of the Convertible Notes that was repurchased, exceeded the total amount of the equity component recorded at the time the Convertible Notes were issued.

The fair value of the conversion option remained unchanged after the exchange of the portion of the 2023 Convertible Notes for the 2024 Convertible Notes and, as a result, there was no adjustment to the carrying amount of the equity component.

The debt discount, which represented the excess of the principal amount of the 2023 Convertible Notes over the carrying amount of the liability component on the date of issuance of the 2023 Convertible Notes, was capitalized and amortized to interest expense under the effective interest rate method over the term of the 2023 Convertible Notes.

Following the exchange of the portion of the 2023 Convertible Notes for the 2024 Convertible Notes, the remaining unamortized discount was allocated between the 2023 Convertible Notes and the 2024 Convertible Notes and is amortized to interest expense over each respective term using the effective interest rate method.

The net carrying value of the liability component of the Convertible Notes was as follows:

(in millions) August 31, 2022 November 30, 2021

Principal $ 522 $ 522

Unamortized debt discount ( 22 ) ( 45 )

As of August 31, 2022, the if-converted value on available shares of 52 million for the Convertible Notes was below par.

During the three months ended February 28, 2023, we borrowed $ 0.8 billion under an export credit facility due in semi-annual installments through 2034.

As of February 28, 2023, the net book value of the vessels subject to negative pledges was $ 15.3 billion.

Collateral and Priority Pool

As of February 28, 2023, the net book value of our ships and ship improvements, excluding ships under construction, is $ 37.2 billion.

Our secured debt is secured on either a first or second-priority basis, depending on the instrument, by certain collateral, which includes vessels and certain assets related to those vessels and material intellectual property (combined net book value of approximately $ 23.5 billion, including $ 21.8 billion related to vessels and certain assets related to those vessels) as of February 28, 2023 and certain other assets.

As of February 28, 2023, $ 8.3 billion in net book value of our ships and ship improvements have been contributed to Carnival Holdings and included in the vessel priority pool of 12 unencumbered vessels (the “Senior Priority Notes Subject Vessels”) for our 2028 Senior Priority Notes.

As of February 28, 2023, there was no change in the identity of the Senior Priority Notes Subject Vessels.

Covenant Compliance

As of August 31, 2022, our Revolving Facility and substantially all of our unsecured loans and export credit facilities contain certain covenants, the most restrictive of which require us to:

• Maintain minimum interest coverage (adjusted EBITDA to consolidated net interest charges) (the “Interest Coverage Covenant”) at the end of each fiscal quarter from August 31, 2023, at a ratio of not less than 2.0 to 1.0 for the August

31, 2023 testing date, 2.5 to 1.0 for the November 30, 2023 testing date, and 3.0 to 1.0 for the February 29, 2024 testing date onwards, or through their respective maturity dates

• Maintain minimum shareholders’ equity of $ 5.0 billion

• Limit our debt to capital (as defined) percentage from the November 30, 2021 testing date until the May 31, 2023 testing date, to a percentage 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

As of February 28, 2023, our 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”) at the end of each fiscal quarter from August 31, 2023, at a ratio of not less than 2.0 to 1.0 for the August 31, 2023 testing date, 2.5 to 1.0 for the November 30, 2023 testing date, and 3.0 to 1.0 for the February 29, 2024 testing date onwards, or through their respective maturity dates

• 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 from the November 30, 2021 testing date until the May 31, 2023 testing date, to a percentage 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 $ 1.5 billion through November 30, 2026

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

During August and September 2022, we entered into letter agreements to waive compliance with the Interest Coverage Covenant under our Revolving Facility and $ 0.7 billion of $ 11.4 billion of our unsecured loans and export credit facilities, which contain the covenant through February 29, 2024.

We will be required to comply beginning with the next testing date of May 31, 2024.

At August 31, 2022 , 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.

As of March 13, 2023, we entered into letter agreements to waive compliance with the Interest Coverage Covenant through the May 31, 2024 testing date under our Revolving Facility and unsecured loans that contain the covenant.

In addition, we entered into amendments for substantially all of our export credit facilities to maintain a minimum interest coverage ratio of not less than 2.0 to 1.0 for the May 31, 2024 testing date.

We also entered into amendments for certain of our unsecured loans with an aggregate principal amount of $ 150 million to maintain a minimum interest coverage ratio of not less than 2.0 to 1.0 for the August 31, 2024 testing date.

At February 28, 2023 , 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.

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

As of August 31, 2022, the scheduled maturities of our debt are as follows:

(in millions)

Year Principal Payments

4Q 2022 $ 991

2024 (a) 4,935

Thereafter 17,862

Total $ 34,808

(a) Includes borrowings of $ 2.7 billion under our Revolving Facility.

Amounts outstanding under our Revolving Facility were drawn in 2020 for an initial six-month term.

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

We had $ 0.3 billion available for borrowing under our Revolving Facility as of August 31, 2022.

NOTE 4 – Contingencies and Commitments

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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.

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, two lawsuits were filed against Carnival Corporation in the U.S.

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.

In the matter filed by Havana Docks Corporation, the hearings on motions for summary judgment were concluded on January 18, 2022.

The hearings on motions for summary judgment were concluded on January 18, 2022.

On March 21, 2022, the court granted summary judgment in favor of Havana Docks Corporation as to liability.

On August 31, 2022, the court determined that the trebling provision of the Helms-Burton statute applies to damages and interest.

Accordingly, we have adjusted our estimated liability for this matter as of August 31, 2022.

On August 31, 2022, the court determined that the trebling provision of the Helms-Burton statute applies to damages and interest and accordingly, we adjusted our estimated liability for this matter.

The court held a status conference on September 22, 2022, at which time it was determined that a jury trial is no longer necessary.

All remaining issues, including calculation of damages and certain pending constitutional matters, will be addressed via briefing to the court.

The briefing schedule is set to have all briefing completed on December 2, 2022.

In the matter filed by Javier Bengochea on December 20, 2021, the court issued an order inviting an amicus brief from the U.S.

government on several issues involved in the appeal.

government filed its brief and the court ordered the parties to respond.

On May 6, 2022 we filed our response brief.

We continue to believe we have a meritorious defense to these actions and we believe that any final liability which may arise as a result of these actions is unlikely to have a material impact on our consolidated financial statements.

On December 30, 2022, the court entered judgment against Carnival in the amount of $ 110 million plus $ 4 million in fees and costs.

We have filed a notice of appeal.

As previously disclosed, on April 8, 2020, DeCurtis LLC (“DeCurtis”), a former vendor, filed an action against Carnival Corporation in the U.S.

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Carnival Corporation seeks damages, including its fees and costs, as well as an order permanently enjoining DeCurtis from engaging in such activities.

These two cases have now been consolidated in the Southern District of Florida.

On April 25, 2022, we moved for summary judgment on our breach of contract claims and on all of DeCurtis’s claims.

DeCurtis also filed a motion for summary judgment on certain portions of our claims.

Both motions for summary judgment are fully briefed.

On July 28, 2022, the court adopted the Magistrate Judge’s report and recommendation granting our opening claim construction brief and denying DeCurtis’s motion for summary judgment regarding the invalidity of various patent claims.

The court has set the trial date for February 27, 2023.

We believe the ultimate outcome will not have a material impact on our consolidated financial statements.

These two cases were consolidated in the Southern District of Florida.

On February 8, 2023, the Court granted summary judgment in Carnival’s favor on DeCurtis’ antitrust, unfair competition, and tortious interference claims.

The trial began on February 27, 2023, with the patent issues narrowed to certain claims of one Carnival patent.

On March 10, 2023, the jury returned a verdict finding that DeCurtis had breached its contract with Carnival and infringed the asserted claims of the Carnival patent.

The jury also found that the same claims of the challenged patent were valid.

The jury awarded Carnival a total of $ 21 million in damages.

COVID-19 Actions

Private Actions

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

Private parties have brought approximately 73 individual lawsuits as of August 31, 2022 in several U.S.

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

These actions include tort claims based on a variety of theories, including negligence and failure to warn.

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A smaller number of actions include wrongful death claims.

As of August 31, 2022, 71 of these individual actions in the U.S.

have now been dismissed or settled for immaterial amounts and two remain.

We believe the ultimate outcome of the remaining individual actions will not have a material impact on our consolidated financial statements.

Additionally, as of August 31, 2022, 10 purported class actions have been brought by former guests from Ruby Princess , Diamond Princess , Grand Princess , Coral Princess and Zaandam in several U.S.

federal courts and in the Federal Court of Australia.

Substantially all of these individual actions have now been dismissed or settled for immaterial amounts.

As of February 28, 2023, 11 purported class actions have been brought by former guests in several U.S.

federal courts, the Federal Court in Australia, and in Italy.

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 August 31, 2022, nine of these class actions have either been settled individually for immaterial amounts or had their class allegations dismissed by the courts and only the Australian matter remains.

As of February 28, 2023, nine of these class actions have either been settled individually for immaterial amounts or had their class allegations dismissed by the courts and only the Australian and Italian matters remain.

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

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

Governmental Inquiries and Investigations

Federal and non-U.S.

governmental agencies and officials are investigating or otherwise seeking information, testimony and/or documents, regarding COVID-19 incidents and related matters.

We are investigating these matters internally and are cooperating with all requests.

The investigations could result in the imposition of civil and criminal penalties in the future.

Ot h er Regulatory or Governmental Inquiries and Investigations

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 intent from inadvertent events to malicious motivated attacks.

As previously disclosed, on June 24, 2022, we finalized a settlement with the New York Department of Financial Services (“NY DFS”) in connection with previously disclosed cybersecurity events, pursuant to which we have paid an amount that did not have a material impact on our consolidated financial statements.

In addition, as previously disclosed, we finalized a settlement with the State Attorneys General from 46 states in connection with the same cybersecurity events, pursuant to which we have paid an amount that did not have a material impact on our consolidated financial statements.

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

We have incurred legal and other costs in connection with cyber incidents that have impacted us.

While these incidents are not expected to 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 litigation, attacks or incidents that could have such a material adverse effect.

The penalties and settlements paid in connection with cyber incidents over the last three 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 litigation, attacks or incidents that could have such a material adverse effect.

On March 14, 2022, the U.S.

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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 August 31, 2022 and November 30, 2021 , we had $ 1.6 billion and $ 1.1 billion in reserve funds related to our customer deposits provided to satisfy these requirements which are included within other assets.

As of February 28, 2023 and November 30, 2022 , we had $ 1.7 billion in reserve funds related to our customer deposits provided 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, 2022 and November 30, 2021, we had $ 30 million of cash collateral in escrow which is included within other assets.

Additionally, as of February 28, 2023 and November 30, 2022 , we had $ 229 million in compensating deposits we are required to maintain and $ 30 million of cash collateral in escrow which is included within other assets.

Ship Commitments

As of August 31, 2022, we expect the timing of our new ship growth capital commitments to be as follows:

As of February 28, 2023, we expect the timing of our new ship growth capital commitments to be as follows:

(in millions)

Remainder of 2023 $ 895

2024 1,499 (a)

(a) Includes a ship subject to financing

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

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

August 31, 2022 November 30, 2021

February 28, 2023 November 30, 2022

Value Fair Value Carrying

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

August 31, 2022 November 30, 2021

February 28, 2023 November 30, 2022

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

Cash and cash equivalents $ 5,455 $ — $ — $ 4,029 $ — $ —

Short-term investments (a) — — — 200 — —

Restricted cash 35 — — 1,988 — —

Derivative financial instruments — 31 — — 1 —

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Total $ — $ 18 $ — $ — $ — $ —

(a) Short term investments consist of marketable securities with original maturities of between three and twelve months.

The restricted cash amount at February 28, 2023 includes $ 20 million, which is included in other assets.

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

Valuation of Goodwill and Trademarks

As of July 31, 2022, we performed our annual goodwill and trademark impairment reviews and determined there was no impairment for goodwill or trademarks.

As of August 31, 2022 and November 30, 2021, goodwill for our North America and Australia (“NAA”) segment was $ 579 million.

We had no goodwill for our Europe and Asia ( “ EA”) segment as of August 31, 2022 and November 30, 2021.

As of February 28, 2023 and November 30, 2022 , goodwill for our North America and Australia (“NAA”) segment was $ 579 million.

(in millions) NAA

Segment Europe

Segment Total

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Exchange movements — 2 2

August 31, 2022 $ 927 $ 218 $ 1,145

Impairment of Ships

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

As a result of the continued effects of COVID-19 on our business, and our updated expectations of the estimated selling values for certain of our ships, we determined that a ship, which we subsequently sold, had a net carrying value that exceeded its estimated discounted future cash flows as of February 28, 2022.

We compared the estimated selling value to the net carrying value and, as a result, recognized ship impairment charges as summarized in the table below during the first quarter of 2022.

The principal assumption used in our cash flow analyses was the timing of the sale and its proceeds, which is considered a Level 3 input.

We believe that we have made reasonable estimates and judgments as part of our assessment.

A change in principal assumptions, including those regarding ship deployment given Costa Cruises’ Asia markets, particularly China, remain closed to cruising, may result in a need to perform additional impairment reviews and a need to recognize additional impairment charges.

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) 2022 2021 2022 2021

NAA Segment $ — $ 273 $ 8 $ 273

EA Segment — 202 — 251

Total ship impairments $ — $ 475 $ 8 $ 524

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

February 28, 2023 $ 927 $ 225 $ 1,152

Derivative Instruments and Hedging Activities

(in millions) Balance Sheet Location August 31, 2022 November 30, 2021

(in millions) Balance Sheet Location February 28, 2023 November 30, 2022

Derivative assets

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Cross currency swaps (a) Prepaid expenses and other $ 6 $ —

Interest rate swaps (b) Prepaid expenses and other 25 1

Other assets 1 1

Total derivative assets $ 31 $ 1

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Derivatives designated as hedging instruments

Cross currency swaps (a) Other long-term liabilities $ — $ 8

Interest rate swaps (b) Accrued liabilities and other 1 3

Other long-term liabilities — 2

Interest rate swaps (b) Other long-term liabilities 18 —

Total derivative liabilities $ 18 $ —

(a) At August 31, 2022, we had no cross-currency swaps.

At November 30, 2021, we had a cross currency swap totaling $ 201 million that was designated as a hedge of our net investment in foreign operations with a euro-denominated functional currency.

(a) At February 28, 2023, we had a cross currency swap totaling $ 643 million that is designated as a hedge of our net investment in foreign operations with euro-denominated functional currencies.

At February 28, 2023, this cross currency swap settles through 2024.

(b) 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 $ 108 million at August 31, 2022 and $ 160 million at November 30, 2021 of EURIBOR-based floating rate euro debt to fixed rate euro debt.

At August 31, 2022, these interest rate swaps settle through 2025.

These interest rate swap agreements effectively changed $ 91 million at February 28, 2023 and $ 89 million at November 30, 2022 of EURIBOR-based floating rate euro debt to fixed rate euro debt.

During the three months ended February 28, 2023 we entered into interest rate swap agreements which effectively changed $ 2.5 billion at February 28, 2023 of LIBOR-based floating rate USD debt to fixed rate USD debt.

At February 28, 2023, these interest rate swaps settle through 2027.

Our derivative contracts include rights of offset with our counterparties.

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

August 31, 2022

February 28, 2023

(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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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 August 31, Nine Months Ended

Three Months Ended February 28,

(in millions) 2023 2022

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Cross currency swaps – net investment hedges - included component

$ 40 $ — $ 72 $ —

Cross currency swaps – net investment hedges - excluded component

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Cross currency swaps – Interest expense, net of capitalized interest

$ 2 $ — $ 5 $ —

The amount of estimated cash flow hedges’ unrealized gains and losses that are expected to be reclassified to earnings in the next twelve months is not material.

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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 August 31, 2022, we have designated $ 410 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, 2022, we recognized $ 32 million and $ 57 million of gains on these non-derivative net investment hedges in the cumulative translation adjustment section of other comprehensive income (loss).

As of February 28, 2023, we have designated $ 418 million of our sterling-denominated debt as non-derivative hedges of our net investments in foreign operations and also had a cross currency swap with a notional amount of $ 643 million, which is designated as a hedge of our net investments in foreign operations.

For the three months ended February 28, 2023, we recognized $ 11 million of gains on these net investment hedges in the cumulative translation adjustment section of other comprehensive income (loss).

We also have euro-denominated debt which provides an economic offset for our operations with euro functional currency.

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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 August 31, 2022, 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 $ 5.2 billion for newbuilds scheduled to be delivered through 2025.

At February 28, 2023, our remaining newbuild currency exchange rate risk primarily relates to euro-denominated newbuild contract payments for non-euro functional currency brands, which represent a total unhedged commitment of $ 3.7 billion for newbuilds scheduled to be delivered through 2025.

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

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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, 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:

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

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• 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, long-term ship charters and new ship progress payments to shipyards

At August 31, 2022, 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.

• 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.

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Historically, we have not experienced significant credit losses, including counterparty nonperformance;

however, because of the impact COVID-19 is having on economies, we have experienced, and may continue to experience, an increase in credit losses.

however, because of the continued effects the pandemic is having on economies, we have experienced, and may continue to experience, an increase in credit losses.

NOTE 6 – Segment Information

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The CODM assesses performance and makes decisions to allocate resources for Carnival Corporation & plc based upon review of the results across all of our segments.

Our four reportable segments are comprised of (1) NAA cruise operations, (2) EA cruise operations, (3) Cruise Support and (4) Tour and Other.

The operating segments within each of our NAA and EA 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, (3) Cruise Support and (4) Tour and Other.

The operating segments within each of our NAA and Europe reportable segments have been aggregated based on the similarity of their economic and other characteristics, including geographic guest sourcing.

Our Cruise Support segment includes our portfolio of leading port destinations and 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 August 31,

(in millions) Revenues Operating costs and

expenses Selling

administrative Depreciation

amortization Operating

income (loss)

NAA $ 2,880 $ 2,280 $ 368 $ 358 $ ( 126 )

EA 1,266 983 173 172 ( 62 )

Cruise Support 41 21 78 36 ( 94 )

Tour and Other 118 94 6 15 3

$ 4,305 $ 3,379 $ 625 $ 581 $ ( 279 )

NAA $ 271 $ 966 $ 219 $ 343 $ ( 1,257 )

EA 232 610 139 180 ( 696 )

Cruise Support 14 13 61 34 ( 94 )

Tour and Other 28 27 6 6 ( 10 )

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

Nine Months Ended August 31,

We have renamed the EA segment given that China has not reopened to international cruise travel.

As a result, we have significantly reduced operations in Asia and leveraged the mobility of our cruise ships and our brand portfolio to build alternate deployments.

In 2019, our most recent full year of guest cruise operations, China accounted for 7 % of our guests.

Three Months Ended February 28,

(in millions) Revenues Operating costs and

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NAA $ 3,078 $ 2,189 $ 440 $ 363 $ 86

EA 2,389 2,529 524 531 ( 1,196 )

Europe 1,294 1,078 213 169 ( 166 )

Cruise Support 51 25 53 42 ( 69 )

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NAA $ 1,126 $ 1,288 $ 344 $ 334 $ ( 840 )

EA 274 1,106 378 550 ( 1,760 )

Europe 457 698 176 181 ( 598 )

Cruise Support 33 28 5 33 ( 34 )

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

(in millions) Three Months Ended August 31, 2022 Nine Months Ended August 31, 2022

Three Months Ended February 28,

(in millions) 2023 2022

North America $ 2,696 $ 1,119

Europe 1,187 479

Australia and Asia 74 97

Australia 338 8

$ 4,432 $ 1,623

As a result of the pause in our guest cruise operations, revenue data for the three and nine months ended August 31, 2021 is not included in the table.

NOTE 7 – Earnings Per Share

Three Months Ended

August 31, Nine Months Ended

(in millions, except per share data) 2023 2022

7 unchanged sentences

Three Months Ended

August 31, Nine Months Ended

(in millions) 2023 2022

3 unchanged sentences

NOTE 8 – Supplemental Cash Flow Information

(in millions) August 31, 2022 November 30, 2021

(in millions) February 28, 2023 November 30, 2022

Cash and cash equivalents (Consolidated Balance Sheets) $ 5,455 $ 4,029

Restricted cash included in prepaid expenses and other and other assets 35 38

Restricted cash (Consolidated Balance Sheets) 15 1,988

Restricted cash (included in other assets) 20 20

Total cash, cash equivalents and restricted cash (Consolidated Statements of Cash Flows) $ 5,491 $ 6,037

For the nine months ended August 31, 2022 and 2021, we did not have borrowings or repayments of commercial paper with original maturities greater than three months.

NOTE 9 – Property and Equipment

During 2022, we sold one NAA segment ship and one EA segment ship and entered into an agreement to sell one NAA segment ship, which collectively represents a passenger-capacity reduction of 4,110 for our NAA segment and 1,410 for our EA segment.

Refer to Note 5 - “Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks, Nonfinancial Instruments that are Measured at Fair Value on a Nonrecurring Basis, Impairment of Ships” for additional discussion.

During the three months ended February 28, 2023 we completed the sale of one Europe segment ship and entered into an agreement to sell one Europe segment ship, which was subsequently completed in March 2023.

These ship sales collectively represent a passenger-capacity reduction of 3,970 berths for our Europe segment.

Additionally, in March 2023 we sold one NAA segment ship, which represents a passenger-capacity reduction of 460 berths.

The net book value of the ships sold subsequent to quarter end was $ 186 million and will result in gains on the sales.

We will continue to operate the NAA segment ship under a bareboat charter agreement through September 2024.

NOTE 10 – Shareholders’ Equity

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 months ended August 31, 2022, there were no sales or repurchases under the Stock Swap Program.

During the nine months ended August 31, 2022, we sold 5.2 million of Carnival Corporation common stock and repurchased the same amount of Carnival plc ordinary shares, resulting in net proceeds of $ 8 million, which were used for general corporate purposes.

During the three and nine months ended August 31, 2021, under the Stock Swap Program, we sold 4.6 million shares of Carnival Corporation 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.

Outside of public equity offerings, during the three months ended August 31, 2022, there were no sales of Carnival Corporation common stock.

In addition, outside of public equity offerings, during the nine months ended August 31, 2022, we sold 1.6 million shares of Carnival Corporation common stock at an average price per share of $ 19.27 , resulting in net proceeds of $ 30 million.

Public Equity Offerings

During the three months ended August 31, 2022, we completed a public equity offering of 117.5 million shares of Carnival Corporation common stock at a price per share of $ 9.95 , resulting in net proceeds of $ 1.2 billion.

During the three months ended February 28, 2023 under the Stock Swap Program, there were no sales or repurchases.

During the three months ended February 28, 2022 under the Stock Swap Program, we sold 1.3 million shares of Carnival Corporation common stock and repurchased the same amount of Carnival plc ordinary shares resulting in net proceeds of $ 2 million, which were used for general corporate purposes.

During the three months ended February 28, 2023, there were no sales of Carnival Corporation common stock .

During the three months ended February 28, 2022, we sold 0.8 million shares of Carnival Corporation common stock at an average price per share of $ 20.18 , resulting in net proceeds of $ 15 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