What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-06-27 compared with 2024-03-27 · 163 added, 89 removed, 147 unchanged (63% of the section changed)

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Cautionary Note Concerning Factors That May Affect Future Results

Some of the statements, estimates or projections contained in this document are “forward-looking statements” that involve risks, uncertainties and assumptions with respect to us, including some statements concerning future results, operations, outlooks, plans, goals, reputation, cash flows, liquidity and other events which have not yet occurred.

Some of the statements, estimates or projections contained in this Quarterly Report on Form 10-Q are “forward-looking statements” that involve risks, uncertainties and assumptions with respect to us, including some statements concerning future results, operations, outlooks, plans, goals, reputation, cash flows, liquidity and other events which have not yet occurred.

These statements are intended to qualify for the safe harbors from liability provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended.

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We have tried, whenever possible, to identify these statements by using words like “will,” “may,” “could,” “should,” “would,” “believe,” “depends,” “expect,” “goal,” “aspiration,” “anticipate,” “forecast,” “project,” “future,” “intend,” “plan,” “estimate,” “target,” “indicate,” “outlook,” and similar expressions of future intent or the negative of such terms.

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

• Adjusted net income (loss)

• Booking levels

• Adjusted EBITDA

• Adjusted earnings per share

• Interest, tax and fuel expenses

• Adjusted free cash flow

• Currency exchange rates

• Net per diems

• Goodwill, ship and trademark fair values

• Liquidity and credit ratings

• Adjusted cruise costs per ALBD

• Investment grade leverage metrics

• Adjusted cruise costs excluding fuel per ALBD

• Estimates of ship depreciable lives and residual values

• Adjusted return on invested capital

Because forward-looking statements involve risks and uncertainties, there are many factors that could cause our actual results, performance or achievements to differ materially from those expressed or implied by our forward-looking statements.

This note contains important cautionary statements of the known factors that we consider could materially affect the accuracy of our forward-looking statements and adversely affect our business, results of operations and financial position.

Additionally, many of these risks and uncertainties are currently, and in the future may continue to be, amplified by our substantial debt balance incurred during the pause of our guest cruise operations.

There may be additional risks that we consider immaterial or which are unknown.

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

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

Additionally, many of these risks and uncertainties are currently, and in the future may continue to be, amplified by our substantial debt

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balance incurred during the pause of our guest cruise operations.

There may be additional risks that we consider immaterial or which are unknown.

Forward-looking statements should not be relied upon as a prediction of actual results.

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The impact in 2024 will be approximately $50 million.

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Statistical Information

Three Months Ended

February 29/28,

May 31, Six Months Ended

2024 2023 2024 2023

Passenger Cruise Days (“PCDs”) (in millions) (a)

24.3 21.8 47.8 42.0

Available Lower Berth Days (“ALBDs”) (in millions) (b) (c)

23.5 22.3 46.5 44.3

Occupancy percentage (d) 104 % 98 % 103 % 95 %

Passengers carried (in millions)

3.3 3.0 6.3 5.7

Fuel consumption in metric tons (in millions)

0.7 0.7 1.5 1.5

Fuel consumption in metric tons per thousand ALBDs 31.9 32.5 31.8 33.0

Fuel cost per metric ton consumed (excluding European Union Allowance (“EUA”)) $ 686 $ 730

EUA cost per metric ton of emissions $ 81 $ —

EUA expense (in millions)

Fuel cost per metric ton consumed (excluding European Union Allowance) $ 684 $ 677 $ 685 $ 704

Currencies (USD to 1)

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ALBDs assume that each cabin we offer for sale accommodates two passengers and is computed by multiplying passenger capacity by revenue-producing ship operating days in the period.

(c) For the three months ended February 29, 2024 compared to the three months ended February 28, 2023, we had a 4.2% capacity increase in ALBDs comprised of a 3.1% capacity increase in our NAA segment and a 6.1% capacity increase in our Europe segment.

Our NAA segment’s capacity increase was caused by the impacts from:

• One Carnival Cruise Line 4,090-passenger capacity ship transferred from Costa Cruises and entered into service in May 2023

• One Seabourn 260-passenger capacity ship that entered into service in July 2023

• One Carnival Cruise Line 5,360-passenger capacity ship that entered into service in December 2023

• One Princess Cruises 4,310-passenger capacity ship that entered into service in February 2024

The increase in our NAA segment’s capacity was partially offset by more ship dry-dock days in 2024 compared to 2023.

Our Europe segment’s capacity increase was caused by the impacts from:

(c) For the three months ended May 31, 2024 compared to the three months ended May 31, 2023, we had a 5.4% capacity increase in ALBDs comprised of a 11% capacity increase in our NAA segment and a 3.6% capacity decrease in our Europe segment.

Our NAA segment’s capacity increase was caused by the following:

• Carnival Cruise Line 4,090-passenger capacity ship that was transferred from Costa Cruises and entered into service in May 2023

• Seabourn 260-passenger capacity ship that entered into service in July 2023

• Carnival Cruise Line 5,360-passenger capacity ship that entered into service in December 2023

• Princess Cruises 4,310-passenger capacity ship that entered into service in February 2024

• Carnival Cruise Line 4,130-passenger capacity ship that was transferred from Costa Cruises and entered into service in April 2024

Our Europe segment’s capacity decrease was caused by the following:

• Costa Cruises 4,090-passenger capacity ship that was transferred to Carnival Cruise Line in March 2023

• AIDA Cruises 1,270-passenger capacity ship removed from service in November 2023

• Costa Cruises 4,240-passenger capacity ship that was transferred to Carnival Cruise Line in February 2024

• The Red Sea rerouting as certain ships repositioned without guests

The decrease in our Europe segment’s capacity was partially offset by the following:

• The return to service of two ships as part of the completion of our return to guest cruise operations

• One P&O Cruises (UK) 5,280-passenger capacity ship that entered into service in December 2022

The increase in our Europe segment’s capacity was partially offset by the impacts from:

• One Costa Cruises 4,090-passenger capacity ship that was transferred to Carnival Cruise Line in March 2023

• One AIDA Cruises 1,270-passenger capacity ship removed from service in November 2023

• One Costa Cruises 4,240-passenger capacity ship that was transferred to Carnival Cruise Line in February 2024 and is scheduled to enter service in April 2024

• Cunard 2,960-passenger capacity ship that entered into service in May 2024

For the six months ended May 31, 2024 compared to the six months ended May 31, 2023, we had a 4.8% capacity increase in ALBDs comprised of a 7.1% capacity increase in our NAA segment and a 1.2% capacity increase in our Europe segment.

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Our NAA segment’s capacity increase was caused by the following:

• Carnival Cruise Line 4,090-passenger capacity ship that was transferred from Costa Cruises and entered into service in May 2023

• Seabourn 260-passenger capacity ship that entered into service in July 2023

• Carnival Cruise Line 5,360-passenger capacity ship that entered into service in December 2023

• Princess Cruises 4,310-passenger capacity ship that entered into service in February 2024

• Carnival Cruise Line 4,130-passenger capacity ship that was transferred from Costa Cruises and entered into service in April 2024

Our Europe segment’s capacity increase was caused by the following:

• The return to service of two ships as part of the completion of our return to guest cruise operations

• P&O Cruises (UK) 5,280-passenger capacity ship that entered into service in December 2022

• Cunard 2,960-passenger capacity ship that entered into service in May 2024

The increase in our Europe segment’s capacity was partially offset by the following:

• Costa Cruises 4,090-passenger capacity ship that was transferred to Carnival Cruise Line in March 2023

• AIDA Cruises 1,270-passenger capacity ship removed from service in November 2023

• Costa Cruises 4,240-passenger capacity ship that was transferred to Carnival Cruise Line in February 2024

• The Red Sea rerouting as certain ships repositioned without guests

(d) Occupancy, in accordance with cruise industry practice, is calculated using a numerator of PCDs and a denominator of ALBDs, which assumes two passengers per cabin even though some cabins can accommodate three or more passengers.

Percentages in excess of 100% indicate that on average more than two passengers occupied some cabins.

Three Months Ended February 29, 2024 (“2024”) Compared to Three Months Ended February 28, 2023 (“2023”)

Three Months Ended May 31, 2024 (“2024”) Compared to Three Months Ended May 31, 2023 (“2023”)

Passenger ticket revenues made up 65% of our 2024 total revenues.

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This increase was caused by:

• $352 million - 12% increase in occupancy

• $253 million - increase in passenger ticket revenues driven by continued strength in demand, which drove ticket prices higher

• $185 million - 5.4% capacity increase in ALBDs

• $176 million - 5.6 percentage point increase in occupancy

The remaining 35% of 2024 total revenues was comprised of onboard and other revenues, which increased by $257 million, or 15%, to $2.0 billion in 2024 from $1.8 billion in 2023.

This increase was driven by:

• $132 million - 5.4% capacity increase in ALBDs

• $70 million - 5.6 percentage point increase in occupancy

• $47 million - higher onboard spending by our guests

Passenger ticket revenues made up 62% of our NAA segment’s 2024 total revenues.

Passenger ticket revenues increased by $429 million, or 21%, to $2.5 billion in 2024 from $2.0 billion in 2023.

This increase was driven by:

• $225 million - 11% capacity increase in ALBDs

• $157 million - increase in passenger ticket revenues driven by continued strength in demand, which drove ticket prices higher

• $44 million - 2.2 percentage point increase in occupancy

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The remaining 38% of our NAA segment’s 2024 total revenues were comprised of onboard and other revenues, which increased by $200 million, or 15%, to $1.5 billion in 2024 compared to $1.3 billion in 2023.

This increase was caused by:

• $145 million - 11% capacity increase in ALBDs

• $37 million - higher onboard spending by our guests

• $28 million - 2.2 percentage point increase in occupancy

Europe Segment

Passenger ticket revenues made up 77% of our Europe segment’s 2024 total revenues.

Passenger ticket revenues increased by $190 million, or 17%, to $1.3 billion in 2024 compared to $1.1 billion in 2023.

This increase was driven by:

• $133 million - 11 percentage point increase in occupancy

• $96 million - increase in passenger ticket revenues driven by continued strength in demand, which drove ticket prices higher

These increases were partially offset by a 3.6% capacity decrease in ALBDs, representing $40 million.

The remaining 23% of our Europe segment’s 2024 total revenues were comprised of onboard and other revenues, which increased by $42 million, or 12%, to $395 million in 2024 from $353 million in 2023.

This increase was caused by an 11 percentage point increase in occupancy.

Costs and Expenses

Operating costs and expenses increased by $340 million, or 10%, to $3.8 billion in 2024 from $3.5 billion in 2023.

This increase was caused by:

• $212 million - 5.4% capacity increase in ALBDs

• $82 million - higher commissions, transportation costs, and other expenses driven by higher commission on increased ticket pricing and an increase in the number of guests

• $41 million - nonrecurrence of a gain on sale of one NAA segment ship in 2023

• $37 million - 5.6 percentage point increase in occupancy

• $30 million - higher onboard and other cost of sales driven by higher onboard revenues

These increases were partially offset by:

• $32 million - lower repair and maintenance expenses (including dry-dock expenses)

• $30 million - decrease in various other costs

Operating costs and expenses increased by $299 million, or 13%, to $2.6 billion in 2024 from $2.3 billion in 2023.

This increase was driven by:

• $251 million - 11% capacity increase in ALBDs

• $52 million - higher commissions, transportation costs, and other expenses driven by higher commission on increased ticket pricing and an increase in the number of guests

• $41 million - nonrecurrence of a gain on sale of one NAA segment ship in 2023

These increases were partially offset by:

• $24 million - lower repair and maintenance expenses (including dry-dock expenses)

• $21 million - decrease in various other costs

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Europe Segment

Operating costs and expenses were $1.1 billion in 2024 and 2023.

The changes in operating costs and expenses for the Europe segment were not material.

Operating Income (Loss)

Our consolidated operating income (loss) increased by $440 million to $560 million in 2024 from $120 million in 2023.

Our NAA segment’s operating income (loss) increased by $260 million to $525 million in 2024 from $265 million in 2023, and our Europe segment’s operating income (loss) increased by $195 million to $168 million in 2024 from $(27) million in 2023.

These changes were primarily due to the reasons discussed above.

Nonoperating Income (Expense)

Interest expense, net of capitalized interest, decreased by $93 million, or 17%, to $450 million in 2024 from $542 million in 2023.

The decrease was substantially all due to a decrease in total debt and lower interest rates.

Six Months Ended May 31, 2024 (“2024”) Compared to Six Months Ended May 31, 2023 (“2023”)

Passenger ticket revenues made up 66% of our 2024 total revenues.

Passenger ticket revenues increased by $1.4 billion, or 23%, to $7.4 billion in 2024 from $6.0 billion in 2023.

This increase was caused by:

• $525 million - 8.2 percentage point increase in occupancy

• $502 million - increase in passenger ticket revenues driven by continued strength in demand, which drove ticket prices higher

• $302 million - 4.8% capacity increase in ALBDs

• $35 million - net favorable foreign currency translational impact

The remaining 34% of 2024 total revenues was comprised of onboard and other revenues, which increased by $484 million, or 15%, to $3.8 billion in 2024 from $3.3 billion in 2023.

This increase was principally due to:

• $147 million - 12% increase in occupancy

This increase was driven by:

• $218 million - 8.2 percentage point increase in occupancy

• $184 million - 4.8% capacity increase in ALBDs

• $67 million - higher onboard spending by our guests

Passenger ticket revenues made up 63% of our NAA segment’s 2024 total revenues.

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• $378 million - increase in passenger ticket revenues driven by continued strength in demand, which drove ticket prices higher

• $123 million - 6.5% increase in occupancy

• $277 million - 7.1% capacity increase in ALBDs

• $168 million - 4.3 percentage point increase in occupancy

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The remaining 37% of our NAA segment’s 2024 total revenues were comprised of onboard and other revenues, which increased by $320 million, or 13%, to $2.8 billion in 2024 compared to $2.5 billion in 2023.

This increase was substantially all due to:

• $77 million - 6.5% increase in occupancy

This increase was caused by:

• $176 million - 7.1% capacity increase in ALBDs

• $107 million - 4.3 percentage point increase in occupancy

• $50 million - higher onboard spending by our guests

Europe Segment

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Passenger ticket revenues increased by $563 million, or 27%, to $2.7 billion in 2024 compared to $2.1 billion in 2023.

This increase was substantially all due to:

• $230 million - 23% increase in occupancy

• $61 million - 6.1% capacity increase in ALBDs

This increase was driven by:

• $357 million - 14 percentage point increase in occupancy

• $123 million - increase in passenger ticket revenues driven by continued strength in demand, which drove ticket prices higher

• $39 million - net favorable foreign currency translational impact

The remaining 23% of our Europe segment’s 2024 total revenues were comprised of onboard and other revenues, which increased by $102 million, or 34%, to $404 million in 2024 from $302 million in 2023.

This increase was principally due to:

• $70 million - 23% increase in occupancy

• $24 million - 1.2% capacity increase in ALBDs

The remaining 23% of our Europe segment’s 2024 total revenues were comprised of onboard and other revenues, which increased by $144 million, or 22%, to $799 million in 2024 from $655 million in 2023.

This increase was driven by:

• $111 million - 14 percentage point increase in occupancy

• $17 million - higher onboard spending by our guests

Costs and Expenses

Operating costs and expenses increased by $735 million, or 11%, to $7.5 billion in 2024 from $6.8 billion in 2023.

This increase was driven by:

This increase was caused by:

• $340 million - 4.8% capacity increase in ALBDs

• $212 million - higher commissions, transportation costs, and other expenses driven by higher commission on increased ticket pricing and an increase in the number of guests

• $72 million - 12% increase in occupancy

• $109 million - 8.2 percentage point increase in occupancy

• $75 million - higher onboard and other cost of sales driven by higher onboard revenues

• $30 million - higher repair and maintenance expenses (including dry-dock expenses)

• $41 million - nonrecurrence of a gain on sale of one NAA segment ship in 2023

• $29 million - net unfavorable foreign currency translational impact

• $25 million - higher port expenses

These increases were partially offset by $52 million of lower fuel expenses.

Selling and administrative expenses increased by $101 million, or 14%, to $813 million in 2024 from $712 million in 2023.

These increases were partially offset by $47 million of lower fuel price and consumption.

Selling and administrative expenses increased by $154 million, or 11%, to $1.6 billion in 2024 from $1.4 billion in 2023.

This increase was caused by an increase in advertising costs and administrative expenses, which includes an increase in compensation costs.

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Operating costs and expenses increased by $512 million, or 11%, to $5.0 billion in 2024 from $4.5 billion in 2023.

This increase was driven by:

This increase was caused by:

• $315 million - 7.1% capacity increase in ALBDs

• $100 million - higher commissions, transportation costs, and other expenses driven by higher commission on increased ticket pricing and an increase in the number of guests

• $44 million - higher repair and maintenance expenses (including dry-dock expenses)

• $42 million - higher onboard and other cost of sales driven by higher onboard revenues

• $26 million - 6.5% increase in occupancy

• $20 million - higher port expenses

These increases were partially offset by $30 million of lower fuel expenses.

• $41 million - nonrecurrence of a gain on sale of one NAA segment ship in 2023

• $35 million - 4.3 percentage point increase in occupancy

• $22 million - higher repair and maintenance expenses (including dry-dock expenses)

These increases were partially offset by $38 million of lower fuel price and consumption.

Selling and administrative expenses increased by $91 million, or 10%, to $966 million in 2024 from $875 million in 2023.

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• $113 million - higher commissions, transportation costs, and other expenses driven by an increase in the number of guests

• $66 million - 6.1% capacity increase in ALBDs

• $45 million - 23% increase in occupancy

• $73 million - 14 percentage point increase in occupancy

• $33 million - net unfavorable foreign currency translational impact

• $32 million - higher onboard and other cost of sales driven by higher onboard revenues

• $25 million - 1.2% capacity increase in ALBDs

These increases were partially offset by:

• $22 million - lower fuel expenses

• $29 million - lower various other costs

• $23 million - lower repair and maintenance expenses (including dry-dock expenses).

Selling and administrative expenses increased by $21 million, or 10%, to $234 million in 2024 from $213 million in 2023.

This increase was caused by an increase in advertising costs and administrative expenses, which includes an increase in compensation costs.

Operating Income (Loss)

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Nonoperating Income (Expense)

Interest expense, net of capitalized interest, decreased by $68 million, or 13%, to $471 million in 2024 from $539 million in 2023.

The decrease was caused by a decrease in total debt.

Debt extinguishment costs were $33 million in 2024 as a result of debt transactions occurring during the current period.

Interest expense, net of capitalized interest, decreased by $161 million, or 15%, to $0.9 billion in 2024 from $1.1 billion in 2023.

The decrease was substantially all due to a decrease in total debt.

Debt extinguishment and modification costs increased by $35 million, or 112%, to $66 million in 2024 from $31 million in 2023 as a result of debt transactions occurring during the respective periods.

Liquidity, Financial Condition and Capital Resources

As of February 29, 2024, we had $5.2 billion of liquidity including $2.2 billion of cash and cash equivalents and $3.0 billion of borrowings available under our Revolving Facility, which matures in August 2024, at which point it will be replaced by the $2.5 billion New Revolving Facility available through August 2027.

As of May 31, 2024, we had $4.6 billion of liquidity including $1.6 billion of cash and cash equivalents and $3.0 billion of borrowings available under our Revolving Facility, which matures in August 2024, at which point it will be replaced by the $2.5 billion New Revolving Facility available through August 2027.

We will continue to pursue various opportunities to repay portions of our existing indebtedness and refinance future debt maturities to extend maturity dates and reduce interest expense.

Refer to Note 3 - “Debt” of the consolidated financial statements and Funding Sources below for additional details.

We had a working capital deficit of $7.9 billion as of February 29, 2024 compared to a working capital deficit of $6.2 billion as of November 30, 2023.

The increase in working capital deficit was primarily due to an increase in customer deposits and the current portion of long-term debt as well as a decrease in prepaid expenses and other.

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We had a working capital deficit of $9.6 billion as of May 31, 2024 compared to a working capital deficit of $6.2 billion as of November 30, 2023.

The increase in working capital deficit was substantially all due to an increase in customer deposits, a decrease in cash and cash equivalents and a decrease in prepaid expenses and other.

We operate with a substantial working capital deficit.

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The cash received as advanced receipts can be used to fund operating expenses, pay down our debt, make long-term investments or any other use of cash.

Included within our working capital are $6.6 billion and $6.1 billion of customer deposits as of February 29, 2024 and November 30, 2023, respectively.

Included within our working capital are $7.9 billion and $6.1 billion of customer deposits as of May 31, 2024 and November 30, 2023, respectively.

We have agreements with a number of credit card processors that transact customer deposits related to our cruise vacations.

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Operating Activities

Our business provided $1.8 billion of net cash flows from operating activities during the three months ended February 29, 2024, an increase of $1.4 billion, compared to $0.4 billion provided for the same period in 2023.

This was driven by an increase in net cash provided by operating activities and an increase in cash provided by the release of substantially all credit card reserves (included in the change in prepaid expenses and other assets).

Our business provided $3.8 billion of net cash flows from operating activities during the six months ended May 31, 2024, an increase of $2.3 billion, compared to $1.5 billion provided for the same period in 2023.

This was caused by an increase in cash provided by the release of substantially all credit card reserves (included in the change in prepaid expenses and other assets), a decrease in the net loss compared to the same period in 2023 and other working capital changes.

Investing Activities

During the three months ended February 29, 2024, net cash used in investing activities was $2.2 billion.

This was driven by:

• Capital expenditures of $1.7 billion for our ongoing new shipbuilding program

• Capital expenditures of $0.4 billion for ship improvements and replacements, information technology and buildings and improvements

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

During the six months ended May 31, 2024, net cash used in investing activities was $3.4 billion.

This was caused by capital expenditures of $3.5 billion primarily attributable to the delivery of a 5,360 and a 4,310-passenger capacity NAA segment ships and one 2,960-passenger capacity Europe segment ship.

During the six months ended May 31, 2023, net cash used in investing activities was $1.5 billion.

This was driven by:

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

• Capital expenditures of $0.2 billion for ship improvements and replacements, information technology and buildings and improvements

• Proceeds from sale of ships of $23 million

• Capital expenditures of $1.8 billion primarily attributable to the delivery of one 5,280-passenger capacity Europe segment ship

• Proceeds from sales of one 2,700-passenger capacity Europe segment ship, one 1,270-passenger capacity Europe segment ship and one 460-passenger capacity NAA segment ship totaling $255 million

Financing Activities

During the three months ended February 29, 2024, net cash provided by financing activities of $0.2 billion was caused by:

During the six months ended May 31, 2024, net cash used in financing activities of $1.2 billion was caused by:

• Repayments of $4.1 billion of long-term debt

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• Issuances of $3.0 billion of long-term debt

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

• Issuances of $0.8 billion of long-term debt

During the six months ended May 31, 2023, net cash used in financing activities of $1.6 billion was driven by:

• Repayments of $0.2 billion of short-term borrowings

• Repayments of $2.3 billion of long-term debt

• Issuances of $1.0 billion of long-term debt

• Payments of $94 million related to debt issuance costs

• Purchases of $20 million of Carnival plc ordinary shares and issuances of $22 million of Carnival Corporation common stock under our Stock Swap Program

Funding Sources

As of February 29, 2024, we had $5.2 billion of liquidity including $2.2 billion of cash and cash equivalents and $3.0 billion of borrowings available under our Revolving Facility, which matures in August 2024, at which point it will be replaced by the New Revolving Facility available through August 2027.

As of May 31, 2024, we had $4.6 billion of liquidity including $1.6 billion of cash and cash equivalents and $3.0 billion of borrowings available under our Revolving Facility, which matures in August 2024, at which point it will be replaced by the New Revolving Facility available through August 2027.

Refer to Note 3 - “Debt” of the consolidated financial statements for additional discussion.

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We plan to use existing liquidity and future cash flows from operations to fund our cash requirements including capital expenditures not funded by our export credit facilities.

We seek to manage our credit risk exposures, including counterparty nonperformance associated with our cash and cash equivalents, and future financing facilities by conducting business with well-established financial institutions, and export credit agencies and diversifying our counterparties.

We seek to manage our credit risk exposures, including counterparty

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nonperformance associated with our cash and cash equivalents, and future financing facilities by conducting business with well-established financial institutions, and export credit agencies and diversifying our counterparties.

(in billions)

Future export credit facilities at February 29, 2024

Future export credit facilities at May 31, 2024

$ — $ 0.7 $ — $ 1.4

Our export credit facilities contain various financial covenants as described in Note 3 - “Debt”.

At February 29, 2024 , we were in compliance with the applicable covenants under our debt agreements.

At May 31, 2024 , we were in compliance with the applicable covenants under our debt agreements.

Off-Balance Sheet Arrangements

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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 2. Management’s Discussion and Analysis