What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-01-27 compared with 2025-01-27 · 150 added, 175 removed, 164 unchanged (66% of the section changed)

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2025 Executive Overview

We had a strong year, setting records and achieving milestones, including:

• Full year revenues hit an all-time high of $25 billion, over 15 percent higher than the prior year

• Seven consecutive quarters of record revenues

• Record full year operating income of $3.6 billion, over 80 percent higher than the prior year

• All-time high cash from operations of almost $6 billion

• Higher ticket prices for 2024 versus 2023 for all of our major cruise lines and onboard spending levels that accelerated sequentially each quarter throughout the year

• Record booking trends and record year-end customer deposits, indicating a continuation of the strong momentum we’ve been experiencing for the last two years

We remain laser focused on further reducing interest expense and rebuilding our investment-grade balance sheet.

During 2024, we made debt prepayments of over $3 billion, bringing our total prepayments to over $7 billion since the beginning of 2023.

Additionally, we have reduced our debt balance by over $8 billion from the peak in January 2023, ending the year with $27.5 billion of debt.

We are delivering long-term value for our shareholders through improved operational execution across our cruise lines.

We ended 2024 with adjusted return on invested capital (“ROIC”) comfortably above our cost of capital.

We welcomed three new ships during 2024:

Carnival Jubilee , the third of five Excel class vessels for Carnival Cruise Line;

Sun Princess , Princess Cruises’ next generation flagship which was just awarded Conde Nast Traveler’s 2024 Mega Ship of the year in the U.S.;

and Queen Anne , Cunard’s first new ship in 14 years.

We have also been focusing on each of our cruise lines’ unique target markets, launching new marketing campaigns across all our brands.

In 2024, both new-to-cruise and repeat guests were each up double-digit percentages and we continue to attract new cruise guests as we work to increase awareness and consideration for cruise travel globally.

We continue to advance our enhanced destination strategy to provide guests with yet another reason to take a cruise vacation with us.

Celebration Key, our new exclusive cruise port destination on Grand Bahama Island, is scheduled to open in the summer of 2025, with an additional pier opening in the fall of 2026.

Its five portals built for fun will further expand our experience offerings with an abundance of features and amenities for our guests.

Celebration Key will be our largest and closest destination in our portfolio, saving fuel costs and reducing greenhouse gas emissions.

In addition, we recently announced plans to enhance Half Moon Cay, our highly rated and award-winning exclusive Bahamian destination.

The enhancements will lean further into this destination’s natural beauty and pristine appeal, reinforcing its new name – RelaxAway, Half Moon Cay.

Featuring a newly constructed pier that is expected to be ready in the summer of 2026, the destination will allow two ships to dock, including Carnival Cruise Line’s largest ships that will be able to visit for the first time.

We believe developing and promoting these unique assets will help us cast the net wider and capture even more new-to-cruise demand.

2025 was another strong year that exceeded expectations, setting new records across our business and achieving more milestones, including:

• Record revenues of $26.6 billion

• All-time high operating income of $4.5 billion, up 25% compared to the prior year

• Achieved the highest adjusted return on invested capital (“ROIC”) in 19 years

• Record booking trends with continued strong close-in demand throughout the year

• Ended 2025 with record year-end customer deposits, up nearly 7% year over year

In 2025, we made significant progress strengthening our balance sheet.

In December 2025, we successfully completed our $19 billion refinancing plan in less than a year and reduced total debt by over $10 billion since our peak in January 2023.

In addition, we surpassed our investment grade leverage metric threshold.

These accomplishments enabled us to reinstate our dividend, reflecting both our confidence in the durability of our cash generation and the improvements we have made to our balance sheet.

Looking forward, we are well-positioned to create even greater shareholder value over time as we continue to reinvest in our future.

This will be driven by our focus on driving commercial excellence, disciplined newbuild strategy, our expansion of return-generating ship enhancement initiatives across some of our cruise lines and our exclusive destination development program.

We continue to strengthen our demand generating efforts to position ourselves for success in 2026 and beyond.

Our world-class cruise lines are refining their focus on target markets, sharpening marketing messages and reaching target consumers more efficiently.

We are also enhancing our commercial strategies by leveraging AI to improve marketing effectiveness, deliver personalized experiences and drive efficiency gains across all our cruise lines.

Together, we believe these initiatives will increase same ship revenues, drive margins and returns higher over time and help to close the price-to-value gap we offer versus land-based alternatives.

In 2025, we opened our game-changing new exclusive destination, Celebration Key, Grand Bahama, which has already hosted more than one million guests since its July opening.

We will continue to build on the success of Celebration Key through planned expansions at some of our other Paradise Collection properties, including RelaxAway, Half Moon Cay and Isla Tropicale (formerly Mahogany Bay) in 2026.

In addition, we recently announced the development of Ensenada Bay Village - Treasures of Baja .

This destination will showcase the natural beauty of Baja California, Mexico through a blend of adventure, culture and relaxation experiences while benefitting our west coast deployments.

During 2025, we also continued making progress towards our sustainability goals.

We reduced our greenhouse gas emission intensity by approximately 17.5 percent compared to 2019, on track to achieve our targeted reduction of 20 percent by the end of 2026, a goal that was previously pulled forward by four years.

We have also lowered our absolute greenhouse gas emissions by almost 10 percent since 2019, despite capacity growth of over nine percent over the same period.

We are grateful for the efforts of our hard working and dedicated team who delivered a step change improvement in 2024 and set us up very well for 2025 and beyond, while consistently delivering unforgettable happiness to over 13 and a half million people in 2024, by providing them with extraordinary cruise vacations while honoring the integrity of every ocean we sail, place we visit and life we touch.

We reached our 2030 goal ahead of schedule, cutting greenhouse gas emissions intensity by over 20% relative to our 2019 baseline.

Separately, our Less Left Over strategy helped reduce food waste by over 47%, edging closer to our 50% target set for 2030.

In addition, we continue to take actions that will strengthen our ability to deliver long-term shareholder value.

We recently announced that our Boards of Directors recommends unifying our dual listed company under a single corporate entity to streamline governance and reporting.

This would also create a single global share price, reduce administrative costs and is expected to increase liquidity and weighting in major U.S.

stock indexes.

Together in 2025, we delivered unforgettable happiness to over 13.5 million people around the world by providing them with extraordinary cruise vacations while honoring the integrity of every ocean we sail, place we visit and life we touch.

We are grateful for the efforts of our over 160,000 hard-working and dedicated team members who delivered incredible results this year and have set us up well for another step forward in 2026.

New Accounting Pronouncements

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In addition, since we do not separately componentize our ships, we do not identify and track depreciation of original ship components.

Therefore, we typically have to estimate the net book value of components that are retired, based primarily upon their replacement cost, their age and their original estimated useful lives.

Therefore, we typically estimate the net book value of components that are retired, based primarily upon their replacement cost, their age and their original estimated useful lives.

Given the large size and complexity of our ships, ship accounting estimates require considerable judgment and are inherently uncertain.

In order to compute our ships’ depreciation expense, we apply judgment to determine their useful lives as well as their residual values.

We have estimated our ships’ useful lives at 30 years and residual values at 15% of our original ship cost.

As of November 30, 2025, we have estimated our ships’ useful lives at 30 years and residual values at 15% of our original ship cost.

Our ships’ useful life and residual value estimates take into consideration the estimated weighted-average useful lives of the ships’ major component systems, such as hull, superstructure, main electric, engines and cabins.

We also take into consideration the impact of technological changes, historical useful lives of similarly-built ships, long-term cruise and vacation market conditions and regulatory changes, including those related to the environment and climate change.

We determine the residual value of our ships based on our long-term estimates of their resale value at the end of their useful lives to us but before the end of their physical and economic lives to others, historical resale values of our and other cruise ships as well as our expectations of the long-term viability of the secondary cruise ship market.

We review estimated useful lives and residual values for reasonableness whenever events or circumstances significantly change.

During the pause of our guest cruise operations, we disposed of ships for amounts significantly below their book values.

Management estimates that this trend will continue to normalize in the coming years.

The IMO’s 2023 Strategy on Reduction of GHG Emissions from Ships (“IMO Strategy”) strives to peak GHG emissions from international shipping as soon as possible and to reach net zero GHG emissions on a well-to-wake basis by or around 2050.

The IMO Strategy includes checkpoints in 2030 and 2040 that seek reductions in the absolute GHG emissions from international shipping by at least 20% and 70%, respectively, compared to 2008.

It also includes a target of a 40% reduction in CO 2 emissions intensity by 2030 compared to 2008.

The EU has also proposed several regulations that will likely impact the cost of fossil fuels and has recently adopted the inclusion of maritime shipping in the EU’s Emissions Trading System.

We have established Climate Action Goals, which include a GHG intensity reduction goal of 20% by 2030 from the 2019 baseline and we are pursuing our aspiration of net zero emissions by 2050 .

Given a 30-year estimated useful life for our ships, our most recently delivered vessels’ lives will extend beyond this 2050 date.

We are pursuing our aspiration of net zero emissions from ship operations by 2050 in line with the IMO’s 2023 Strategy on Reduction of GHG Emissions from Ships .

Given the estimated useful life for our ships, our most recently delivered vessels’ lives will extend beyond this 2050 date.

To provide a path to net zero emissions, alternative low GHG emission fuels will be necessary for the maritime industry;

however, there are significant supply challenges that must be resolved before viability is reached.

We are closely monitoring technology developments and partnering with organizations on research and development to support our sustainability goals and aspirations.

Our fleet’s engines are capable of being modified for use with certain alternative fuels and we have completed tests on the use of marine biofuel blends on certain ships in our fleet.

In addition, and in support of our Climate Action Goals, we invest in technologies, including the use of LNG powered cruise ships, the installation of Advanced Air Quality Systems on board our ships to aid in the reduction of sulfur emissions, the use of shore power, enabling ships to use shoreside electric power where available while in port and various other efficiency related upgrades intended to reduce our emissions.

It is uncertain how proposed and possible future regulatory changes related to the environment and climate change and our aspiration of net zero emissions by 2050, may impact our ships’ useful lives and residual values and the impact is dependent on future regulatory actions and technological advances.

As of November 30, 2024, management concluded that there were no changes in our ship useful lives and residual value estimates.

We are closely monitoring technology developments which may support our sustainability goals.

Our fleet’s engines are capable of using certain alternative fuels and we have completed tests on the use of marine biofuel blends on certain ships in our fleet.

In addition, and in support of our Climate Action Goals, we invest in technologies, including the use of liquefied natural gas (“LNG”) powered cruise ships, the installation of Advanced Air Quality Systems on board our ships to aid in the reduction of sulfur emissions, the use of shore power, enabling ships to use shoreside electric power where available while in port and various other efficiency related upgrades intended to reduce our emissions.

It is uncertain how proposed and possible future regulatory changes, as well as our 2050 net zero emissions aspiration, may impact our ships’ useful lives and residual values as the impact is dependent on future regulatory actions and technological advances.

If materially different conditions existed, or if we materially changed our assumptions of ship useful lives and residual values, then our depreciation expense, loss on retirement of ship components and net book value of our ships would be materially different.

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• $265 million assuming we had estimated our ships to have no residual value

We believe that the estimates we made for ship accounting purposes are reasonable and our methods are consistently applied in all material respects and result in depreciation expense that is based on a rational and systematic method to equitably allocate the costs of our ships to the periods during which we use them.

Valuation of Ships

We review our ships for impairment whenever events or changes in circumstances indicate that the carrying value of a ship may not be recoverable.

When an impairment review is appropriate, such as an expected sale of a ship before the end of its useful life, impairment reviews of our ships require us to make significant estimates.

We evaluate ship asset impairments at the individual ship level which is the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.

If estimated future cash flows are less than the carrying value of a ship, an impairment charge is recognized to the extent its carrying value exceeds its estimated fair value.

The estimation of a ship’s fair value includes numerous assumptions that are subject to various risks and uncertainties.

The principal assumption used in determining the fair value of our ships tested for impairment in 2022 was the estimated sales proceeds.

We determined the fair value of these ships based on their respective estimated selling values, for those ships expected to be disposed of, or estimated discounted future cash flows and comparable market transactions.

Where estimated future cash flows are used to estimate the recoverable value of a ship, the cash flows include estimated regulatory costs, including those related to proposed regulations, which are likely to impact costs and capital expenditures, including those expected to meet our 2030 Climate Action Goals.

Refer to our consolidated financial statements for additional discussion of our property and equipment policy and ship impairment reviews.

We believe that we have made reasonable estimates.

We review estimated useful lives and residual values of our ships for reasonableness whenever events or circumstances indicate a revision is warranted.

In December 2025, we completed such review considering the period over which we expect to operate our ships and our long-term plans.

As a result, we determined our ships’ depreciable lives would be extended to 35 years.

In connection with the increase in estimated useful life, we reduced our estimated residual value of each ship to be 5% of our original ship cost for LNG powered ships and a range of salvage values under $25 million for all other ships, depending on the class and tonnage of the ship.

This revision did not have a material impact on our financial statements and has been applied prospectively beginning December 1, 2025.

the costs of our ships to the periods during which we use them.

Contingencies

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Known Trends and Uncertainties

• We believe the volatility in the cost of fuel is reasonably likely to continue to impact our profitability in both the short and long-term.

• We believe the increasing global focus on climate change, including the reduction of GHG emissions and new and evolving regulatory requirements, is reasonably likely to have a material negative impact on our future financial results.

We believe changes in the cost of fuel, fluctuations in foreign currency exchange rates and new and evolving regulatory requirements related to the reduction of GHG emissions are reasonably likely to impact our profitability in both the short and long-term.

We became subject to the EU Emissions Trading System (“ETS”) on January 1, 2024, which includes a three-year phase-in period.

The impact of this regulation in 2025 and 2024 was $91 million and $46 million, which represented costs associated with 70% and 40% of emissions under the ETS operational scope.

In 2026, all in scope emissions will be impacted.

Refer to XVIII.

Governmental Regulations.

Governmental and Other Regulations.

Results of Operations

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• Most meals, including snacks at numerous venues

• Access to amenities such as swimming pools, water slides, water parks, whirlpools, a health club and sun decks

• Child care and supervised youth programs

• Access to onboard amenities such as swimming pools, water slides, water parks, whirlpools, a health club and sun decks

• Entertainment, such as theatrical and comedy shows, live music and nightclubs

• Visits to multiple destinations

• Visits to multiple ports, including our portfolio of owned or operated ports and destinations

• Childcare and supervised youth programs

• Sales of onboard goods and services not included in the cruise ticket price.

This generally includes the following:

• Beverage sales • Internet and communication services

• Casino gaming • Full service spas

• Shore excursions • Specialty restaurants

• Retail sales • Art sales

• Photo sales • Laundry and dry cleaning services

• Beverage sales

• Internet and communication services

• Casino gaming

• Full-service spas

• Shore excursions and experiences

• Specialty restaurants

• Retail sales

• Photo sales

These goods and services are provided either directly by us or by independent concessionaires, from which we receive either a percentage of their revenues or a fee.

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We incur cruise operating expenses for the following:

• The costs of passenger cruise bookings, which include travel agent commissions, cost of air and other transportation, port fees, taxes, and charges that directly vary with guest head counts and credit and debit card fees

• Onboard and other cruise costs, which include the costs of beverage sales, costs of shore excursions, costs of retail sales, internet and communication costs, credit and debit card fees, other onboard costs, costs of cruise vacation protection programs and pre- and post-cruise land packages

• Payroll and related costs, which include the costs of officers and crew in bridge, engineering and hotel operations.

• Commissions, transportation and other, which include costs of travel agent commissions, air and other transportation, port fees, taxes, and charges that directly vary with guest head counts and credit and debit card fees

• Onboard and other, which include the costs of beverage sales, shore excursions, retail sales, internet and communication, credit and debit card fees, other onboard costs, cruise vacation protection programs and pre- and post-cruise land packages

• Payroll and related, which include the costs of officers and crew in bridge, engineering and hotel operations.

Substantially all costs associated with our shoreside personnel are included in selling and administrative expenses

• Fuel costs, which include fuel delivery costs and European Union Allowance costs

• Food costs, which include both our guest and crew food costs

• Other ship operating expenses, which include port costs that do not vary with guest head counts;

• Fuel, which include fuel delivery costs and emission allowance costs

• Food, which include both our guest and crew food costs

• Other operating expenses, which include port costs that do not vary with guest head counts;

repairs and maintenance, including minor improvements and dry-dock expenses;

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freight and logistics;

insurance premiums and all other ship operating expenses

We incur tour and other costs and expenses for our hotel and transportation operations and other expenses.

insurance premiums;

tour and other expenses for our hotel and transportation operations and all other operating expenses

We do not allocate payroll and related, fuel, food or other operating expenses to the expense categories attributable to passenger ticket revenues or onboard and other revenues since they are incurred to provide the total cruise vacation experience.

Statistical Information

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Fuel consumption in metric tons per thousand ALBDs 29.2 30.9 32.1

Fuel cost per metric ton consumed (excluding European Union Allowance) $ 665 $ 701 $ 830

Fuel cost per metric ton consumed (excluding emission allowances) $ 610 $ 665 $ 701

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) In 2024 compared to 2023, we had a 4.7% capacity increase in ALBDs comprised of a 7.9% capacity increase in our NAA segment and a 0.5% 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 transferred from Costa Cruises and entered into service in May 2023

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

(c) In 2025 compared to 2024, we had a 1.0% capacity increase in ALBDs comprised of a 1.2% capacity increase in our North America segment and a 0.6% capacity increase in our Europe segment.

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

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

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

The increase in our NAA segment’s capacity was partially offset by a Seabourn 460-passenger capacity ship that was removed from service in September 2024.

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

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

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

• Costa Cruises 4,240-passenger capacity ship that transferred to Carnival Cruise Line and was removed from Costa Cruises’ fleet 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

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

• Princess Cruises 4,310-passenger capacity ship that entered into service in September 2025

The increase in our North America segment’s capacity was partially offset by:

• Seabourn 460-passenger capacity ship that left the fleet in September 2024

• P&O Cruises (Australia) 2,000-passenger capacity ship that left the fleet in February 2025

Our Europe segment’s capacity increase was caused by:

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

• Nonrecurrence of the Red Sea rerouting without guests

The increase in our Europe segment’s capacity was partially offset by a Costa Cruises 4,240-passenger capacity ship that transferred to Carnival Cruise Line in February 2024.

(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.

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This discussion should be read in conjunction with the consolidated financial statements and the notes thereto included elsewhere in this annual report.

For a comparison of the Company’s results of operations for the year ended November 30, 2023 to the year ended November 30, 2022, see “Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended November 30, 2023, which was filed with the U.S.

For a comparison of the company’s results of operations for the year ended November 30, 2024 to the year ended November 30, 2023, see “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s Annual Report on Form 10-K for the year ended November 30, 2024, which was filed with the U.S.

Securities and Exchange Commission on January 27, 2025.

Passenger ticket revenues made up 65% of our 2025 total revenues.

Passenger ticket revenues increased by $2.4 billion, or 17%, to $16.5 billion in 2024 from $14.1 billion in 2023.

Passenger ticket revenues increased by $956 million, or 5.8%, to $17.4 billion in 2025 from $16.5 billion in 2024.

This increase was caused by:

• $635 million - higher ticket prices driven by continued strength in demand

• $705 million - 5.1 percentage point increase in occupancy

• $196 million - net favorable foreign currency translation impact

• $159 million - 1.0% capacity increase in ALBDs

• $86 million - net favorable foreign currency translational impact

These increases were partially offset by a decrease of $60 million in other passenger revenue.

The remaining 34% of 2024 total revenues was comprised of onboard and other revenues, which increased by $1.0 billion, or 14%, to $8.6 billion in 2024 from $7.5 billion in 2023.

These increases were partially offset by a decrease of $74 million in air transportation revenue.

The remaining 35% of 2025 total revenues were comprised of onboard and other revenues, which increased by $644 million, or 7.5%, to $9.2 billion in 2025 from $8.6 billion in 2024.

This increase was driven by:

• $422 million - 4.7% capacity increase in ALBDs

• $286 million - 5.1 percentage point increase in occupancy

• $466 million - higher onboard spending by our guests

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

Passenger ticket revenues increased by $1.5 billion, or 16%, to $10.6 billion in 2024 from $9.1 billion in 2023.

This increase was caused by:

• $83 million - 1.0% capacity increase in ALBDs

• $609 million - higher ticket prices driven by continued strength in demand

• $241 million - 2.7 percentage point increase in occupancy

These increases were partially offset by a decrease of $64 million in other passenger revenue.

The remaining 37% of our NAA segment’s 2024 total revenues were comprised of onboard and other revenues, which increased by $753 million, or 14%, to $6.2 billion in 2024 from $5.5 billion in 2023.

• $57 million - net favorable foreign currency translation impact

North America Segment

Passenger ticket revenues made up 62% of our North America segment’s 2025 total revenues.

Passenger ticket revenues increased by $361 million, or 3.4%, to $10.9 billion in 2025 from $10.6 billion in 2024.

This increase was caused by:

• $344 million - higher ticket prices driven by continued strength in demand

• $122 million - 1.2% capacity increase in ALBDs

These increases were partially offset by a decrease of $74 million in air transportation revenue.

The remaining 38% of our North America segment’s 2025 total revenues were comprised of onboard and other revenues, which increased by $442 million, or 7.1%, to $6.7 billion in 2025 from $6.2 billion in 2024.

This increase was caused by:

• $376 million - higher onboard spending by our guests

• $145 million - 2.7 percentage point increase in occupancy

• $72 million - 1.2% capacity increase in ALBDs

Europe Segment

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This increase was driven by:

• $463 million - 8.8 percentage point increase in occupancy

• $292 million - higher ticket prices driven by continued strength in demand

• $87 million - net favorable foreign currency translational impact

These increases were partially offset by a 0.5% capacity decrease in ALBDs, representing $26 million.

• $200 million - net favorable foreign currency translation impact

• $46 million - 0.8 percentage point increase in occupancy

The remaining 23% of our Europe segment’s 2025 total revenues were comprised of onboard and other revenues, which increased by $188 million, or 11%, to $1.9 billion in 2025 from $1.8 billion in 2024.

This increase was driven by:

• $142 million - 8.8 percentage point increase in occupancy

• $89 million - higher onboard spending by our guests

Costs and Expenses

Operating expenses increased by $1.3 billion, or 9.2%, to $15.6 billion in 2024 from $14.3 billion in 2023.

• $60 million - net favorable foreign currency translation impact

Operating Expenses

Operating expenses increased by $309 million, or 2.0%, to $15.9 billion in 2025 from $15.6 billion in 2024.

This increase was caused by:

• $151 million - 1.0% capacity increase in ALBDs

• $333 million - higher commissions, transportation costs, and other expenses driven by higher commission on increased ticket pricing and an increase in the number of guests

• $112 million - net unfavorable foreign currency translation impact

• $90 million - higher onboard and other cost of sales driven by higher onboard revenues

• $139 million - 5.1 percentage point increase in occupancy

• $63 million - higher repair and maintenance expenses (including dry-dock expenses)

• $59 million - net unfavorable foreign currency translational impact

• $47 million - decreases in gains on ship sales realized in 2024 compared to 2023

• $54 million - higher commissions, transportation costs, and other expenses driven by increased ticket pricing and an increase in the number of guests

• $42 million - higher port expenses

• $27 million - higher repair and maintenance expenses (including dry-dock expenses)

• $26 million - higher cruise payroll and related expenses

• $23 million - nonrecurrence of change in pension valuation in 2024

These increases were partially offset by:

• $109 million - lower fuel prices including the impact of the cost of emission allowances

• $109 million - lower fuel consumption per ALBD

• $58 million - lower fuel prices

• $23 million - change in pension valuation

• $71 million - higher gains on ship sales realized in 2025 compared to 2024

Selling and administrative expenses increased by $150 million, or 4.6%, to $3.4 billion in 2025 from $3.3 billion in 2024.

This increase was driven by higher compensation expense, increased investment in advertising and higher information technology expense.

Depreciation and amortization expenses increased by $233 million, or 9.1%, to $2.8 billion in 2025 from $2.6 billion in 2024.

This increase was driven by capacity increases, fleet enhancements and investments in shoreside assets for our NAA segment.

Operating expenses increased by $968 million, or 10%, to $10.6 billion in 2024 from $9.6 billion in 2023.

This increase was caused by:

North America Segment

Operating expenses decreased by $18 million, or 0.2%, to $10.5 billion in 2025 from $10.6 billion in 2024.

This decrease was caused by:

• $101 million - lower fuel prices including the impact of the cost of emission allowances

• $79 million - lower fuel consumption per ALBD

These decreases were partially offset by:

• $122 million - 1.2% capacity increase in ALBDs

• $160 million - higher commissions, transportation costs, and other expenses driven by higher commission on increased ticket pricing and an increase in the number of guests

• $40 million - higher onboard and other cost of sales driven by higher onboard revenues

• $76 million - higher repair and maintenance expenses (including dry-dock expenses)

• $46 million - 2.7 percentage point increase in occupancy

These increases were partially offset by:

• $86 million - lower fuel consumption per ALBD

• $50 million - lower fuel prices

Selling and administrative expenses increased by $199 million, or 11%, to $2.0 billion in 2024 from $1.8 billion in 2023.

This increase was driven by higher compensation expense, increased investment in advertising and higher information technology expense.

Selling and administrative expenses increased by $13 million, or 0.7%, and were $2.0 billion in 2025 and 2024.

Depreciation and amortization expenses increased by $154 million, or 9.3%, to $1.8 billion in 2025 from $1.7 billion in 2024.

This increase was caused by:

• $117 million - 7.9% capacity increase in ALBDs

• $51 million - fleet enhancements and investments in shoreside assets

Europe Segment

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This increase was caused by:

• $174 million - higher commissions, transportation costs, and other expenses driven by an increase in the number of guests

• $92 million - 8.8 percentage point increase in occupancy

• $118 million - net unfavorable foreign currency translation impact

• $50 million - higher onboard and other cost of sales driven by higher onboard revenues

• $62 million - net unfavorable foreign currency translational impact

• $47 million - nonrecurrence of gains on sale of three Europe segment ships in 2023

These increases were partially offset by a $23 million change in pension valuation.

Selling and administrative expenses increased by $85 million, or 9.7%, to $961 million in 2024 from $876 million in 2023.

• $45 million - higher commissions, transportation costs, and other expenses driven by increased ticket pricing and an increase in the number of guests

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

• $33 million - higher port expenses

• $23 million - nonrecurrence of change in pension valuation in 2024

These increases were partially offset by a $57 million gain on sale of one ship.

Selling and administrative expenses increased by $81 million, or 8.4%, and were $1.0 billion in 2025 and 2024.

Depreciation and amortization expenses increased by $70 million, or 10%, to $746 million in 2025 from $676 million in 2024.

This increase was driven by fleet enhancements and net unfavorable foreign currency translation impacts.

Operating Income

Our consolidated operating income increased by $1.6 billion to $3.6 billion in 2024 from $2.0 billion in 2023.

Our NAA segment’s operating income increased by $879 million to $2.6 billion in 2024 from $1.8 billion in 2023, and our Europe segment’s operating income increased by $747 million to $1.3 billion in 2024 from $593 million in 2023.

Our consolidated operating income increased by $909 million to $4.5 billion in 2025 from $3.6 billion in 2024.

Our North America segment’s operating income increased by $653 million to $3.3 billion in 2025 from $2.6 billion in 2024, and our Europe segment’s operating income increased by $319 million to $1.7 billion in 2025 from $1.3 billion in 2024.

These changes were primarily due to the reasons discussed above.

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Interest expense, net of capitalized interest, decreased by $406 million, or 23%, to $1.3 billion in 2025 from $1.8 billion in 2024.

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

Debt extinguishment and modification costs decreased by $32 million, or 28%, to $79 million in 2024 from $111 million in 2023 as a result of debt transactions occurring during the respective periods.

Other income (expense), net increased by $157 million to $83 million in 2024 from ($75) million in 2023.

The increase primarily relates to a non-recurring favorable result related to litigation.

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

Debt extinguishment and modification costs increased by $330 million to $409 million in 2025 from $79 million in 2024 as a result of debt transactions occurring during the respective periods.

Liquidity, Financial Condition and Capital Resources

As of November 30, 2024, we had $4.2 billion of liquidity including $1.2 billion of cash and cash equivalents and $2.9 billion of borrowings available under our multi-currency revolving credit facility (“Revolving Facility”).

In addition, we had $7.8 billion of undrawn export credit facilities to fund ship deliveries planned through 2033.

W e 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 5 - “Debt” of the consolidated financial statements and Funding Sources below for additional details.

As of November 30, 2025, we had $6.4 billion of liquidity including $1.9 billion of cash and cash equivalents and $4.5 billion available for borrowing under our multicurrency revolving credit facility.

In addition, we had $7.8 billion of undrawn export credit facilities to fund future ship deliveries.

We had a working capital deficit of $8.9 billion as of November 30, 2025 compared to a working capital deficit of $8.2 billion as of November 30, 2024.

The increase in working capital deficit was caused by increases in customer deposits and accrued liabilities and other and decreases in the current portion of long-term debt, cash and cash equivalents and prepaid expenses and other.

The increase in working capital deficit was caused by an increase in the current portion of long-term debt and customer deposits, partially offset by an increase in cash and cash equivalents.

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 $6.4 billion and $6.1 billion of customer deposits as of November 30, 2024 and 2023.

Included within our working capital are $6.8 billion and $6.4 billion of current customer deposits as of November 30, 2025 and 2024.

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

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

We are not a party to any off-balance sheet arrangements, including guarantee contracts, retained or contingent interests, certain derivative instruments and variable interest entities that either have, or are reasonably likely to have, a current or future material effect on our consolidated financial statements.

Sources and Uses of Cash

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Our business provided $6.2 billion of net cash flows from operating activities during 2025, an increase of $0.3 billion compared to $5.9 billion provided in 2024.

This was caused by cash provided by the release of $0.8 billion credit card reserve funds (included in the change in prepaid expenses and other assets) and our net income position of $1.9 billion in 2024 compared to our net loss position of $74 million in 2023, partially offset by a decrease in other working capital changes.

This increase was driven by higher net income in 2025 partially offset by changes in prepaid expenses and other assets, which includes the nonrecurrence of cash provided by the release of credit card reserves in 2024.

Investing Activities

During 2024, net cash used in investing activities was $4.5 billion.

This was caused by:

• Capital expenditures of $4.6 billion primarily attributable to the delivery of two NAA segment ships, one Europe segment ship and developments in our port destinations and exclusive islands

• Proceeds of $58 million primarily from the sale of an NAA segment ship

During 2023, net cash used in investing activities was $2.8 billion.

This was driven by:

• Capital expenditures of $3.3 billion with the majority attributable to the delivery of one Europe segment ship and one NAA segment ship

• Proceeds from sales of three Europe segment ships, one NAA segment ship and other totaling $340 million

During 2025, net cash used in investing activities of $3.3 billion was caused by:

• Capital expenditures of $3.6 billion substantially all attributable to the delivery of one North America segment ship, ship improvements and development of our portfolio of exclusive destinations.

• Proceeds of $323 million substantially all from the sale of one North America segment ship and one Europe segment ship

• Advances of $100 million made to Floating Docks S.

During 2024, net cash used in investing activities of $4.5 billion was caused by:

• Capital expenditures of $4.6 billion primarily attributable to the delivery of two North America segment ships, one Europe segment ship and developments in our port destinations and exclusive islands

• Proceeds of $58 million primarily from the sale of a North America segment ship

Financing Activities

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• Issuances of $11.2 billion of long-term debt

During 2023, net cash used in financing activities of $5.1 billion was driven by:

• Repayments of $200 million of short-term borrowings

• Repayments of $5.9 billion of long-term debt and refinancing of $1.8 billion of long-term debt to extend maturities

• Issuances of $3.0 billion of long-term debt

During 2024, net cash used in financing activities of $2.6 billion was caused by:

• Repayments of $5.4 billion of long-term debt

• Debt issuance costs of $203 million

• Debt extinguishment costs of $41 million

• Proceeds from issuance of $22 million of Carnival Corporation common stock and purchases of $20 million of Carnival plc ordinary shares under our Stock Swap Program

For our cash flow activities for the fiscal year ended November 30, 2022, see “Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended November 30, 2023, which was filed with the U.S.

• Issuances of $3.1 billion of long-term debt

For our cash flow activities for the fiscal year ended November 30, 2023, see “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended November 30, 2024, which was filed with the U.S.

Securities and Exchange Commission on January 27, 2025.

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(in millions) 2026 2027 2028 2029 2030 Thereafter Total

Debt (a) $ 2,969 $ 3,991 $ 6,016 $ 9,534 $ 4,706 $ 6,495 $ 33,712

Newbuild capital expenditures (b) 893 423 1,302 1,263 1,502 3,182 8,565

Debt (a) $ 3,066 (b) $ 3,537 $ 4,889 $ 4,883 $ 3,493 $ 12,320 $ 32,188

Newbuild capital expenditures (c) 501 1,586 1,474 1,823 1,661 4,769 11,814

Total $ 3,567 $ 5,123 $ 6,363 $ 6,706 $ 5,154 $ 17,089 $ 44,002

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Excludes undrawn export credits.

(b) As of November 30, 2024, we have undrawn export credit facilities of $7.8 billion which fund a portion of our newbuild contractual commitments.

(b) Includes an aggregate of $500 million representing the portion of the 5.75% convertible senior notes due 2027 converted and settled in cash in December 2025.

(c) As of November 30, 2025, we have undrawn export credit facilities of $7.8 billion which fund a portion of our newbuild contractual commitments.

Funding Sources

As of November 30, 2024, we had $4.2 billion of liquidity including $1.2 billion of cash and cash equivalents and $2.9 billion of borrowings available under our Revolving Facility.

In addition, we had $7.8 billion of undrawn export credit facilities to fund ship deliveries planned through 2033.

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.

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$ — $ 1.3 $ 1.3 $ 1.7 $ — $ 3.4

Our export credit facilities contain various financial covenants as described in Note 5 - “Debt.” At November 30, 2024, we were in compliance with the applicable covenants under our debt agreements.

Our export credit facilities contain various financial covenants as described in Note 5 - “Debt” of the consolidated financial statements.

At November 30, 2025, we were in compliance with the applicable covenants under our debt agreements.

The declaration of dividends shall at all times be subject to the final determination of our Boards of Directors that a dividend is prudent at that time in consideration of the liquidity needs of the business.

In December 2025, the Boards of Directors approved the reinstatement of the company’s quarterly dividend and declared an initial $0.15 per share dividend with a record date of February 13, 2026 and a payment date of February 27, 2026.

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-K

Item 7. Management’s Discussion and Analysis