What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-03-27 compared with 2025-09-29 · 77 added, 195 removed, 112 unchanged (71% of the section changed)

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

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

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

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

• Changes in and non-compliance with laws and regulations under which we operate, such as those relating to health, environment, safety and security, data privacy and protection, anti-money laundering, anti-corruption, economic sanctions, trade protection, labor and employment, and tax may be costly and lead to litigation, enforcement actions, fines, penalties and reputational damage.

• Factors associated with climate change, including evolving and increasing regulations, increasing concerns about climate change and the shift in climate conscious consumerism and stakeholder scrutiny, and increasing frequency and/or severity of adverse weather conditions could have a material impact on our business.

• Inability to meet or achieve our targets, goals, aspirations, initiatives, and our public statements and disclosures regarding them, including those related to sustainability matters, may expose us to risks that may adversely impact our business.

• Cybersecurity incidents and data privacy breaches, as well as disruptions and other damages to our principal offices, information technology operations and system networks and failure to keep pace with developments in technology have adversely impacted and may in the future materially adversely impact our business operations, the satisfaction of our guests and crew and may lead to fines, penalties and reputational damage.

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

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

• Cybersecurity incidents and data privacy breaches, as well as disruptions and other damages to our principal and other offices, information technology operations and system networks and failure to keep pace with developments in technology may adversely impact our business operations, the satisfaction of our guests and crew and may lead to fines, penalties and reputational damage.

• Our debt requires a significant amount of cash to service and our ability to generate sufficient cash depends on many factors, some of which may be beyond our control.

Our financial condition and operations could be adversely impacted if we are unable to service our debt or satisfy our covenants.

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

• The loss of key team members, our inability to recruit or retain qualified shoreside and shipboard team members and increased labor costs could have an adverse effect on our business and results of operations.

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

• We rely on suppliers who are integral to the operations of our businesses.

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• Fluctuations in foreign currency exchange rates may adversely impact our financial results.

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

• Overcapacity and competition in the cruise and land-based vacation industry may negatively impact our cruise sales, pricing and destination options.

• Inability to implement our shipbuilding programs and ship repairs, maintenance and refurbishments may adversely impact our business operations and the satisfaction of our guests.

• We require a significant amount of cash to service our debt and sustain our operations.

Our ability to generate cash depends on many factors, including those beyond our control, and we may not be able to generate cash required to service our debt and sustain our operations.

• Our debt could adversely affect our financial health and operating flexibility.

• Changes in and non-compliance with laws and regulations under which we operate, such as those relating to health, environment, safety and security, data privacy and protection, anti-money laundering, anti-corruption, economic sanctions, trade protection measures, labor and employment, and tax may be costly and lead to litigation, enforcement actions, fines, penalties and reputational damage.

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

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

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

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

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Additional information about the factors that may affect future results is contained in our most recent Annual Report on Form 10-K as well as our other filings with the SEC, all of which are available on the SEC's website at www.sec.gov .

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

Subject to any continuing obligations under applicable law or any relevant stock exchange rules, we expressly disclaim any obligation to disseminate, after the date of this document, any updates or revisions to any such forward-looking statements to reflect any change in expectations or events, conditions or circumstances on which any such statements are based.

Forward-looking and other statements in this document may also address our sustainability progress, plans, and goals (including climate change- and environmental-related matters).

In addition, historical, current, and forward-looking sustainability- and climate-related statements may be based on standards and tools for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions and predictions that are subject to change in the future and may not be generally shared.

Forward-looking and other statements in this document may also address our sustainability progress, plans, and goals (including emissions and environmental-related matters).

In addition, historical, current, and forward-looking sustainability-related statements may be based on standards and tools for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions and predictions that are subject to change in the future and may not be generally shared.

New Accounting Pronouncements

Refer to Note 1 - “ General, Accounting Pronouncements ” of the consolidated financial statements for additional discussion regarding Accounting Pronouncements .

Refer to Note 1 - “ General ” of the consolidated financial statements for additional discussion regarding Accounting Pronouncements .

Critical Accounting Estimates

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In addition, substantially all of Holland America Princess Alaska Tours’ revenue and operating income is generated from May through September in conjunction with Alaska’s cruise season.

Proposed DLC Unification and Redomiciliation

On January 27, 2026, Carnival Corporation filed a Registration Statement on Form S-4 with the SEC, as amended by Amendment No.

1 filed on February 20, 2026 (the “S-4”), in connection with the proposed unification of the dual listed company structure under a single corporate entity, Carnival Corporation, with Carnival plc as its wholly-owned UK subsidiary, and the shifting of Carnival Corporation’s legal incorporation from Panama to Bermuda, as previously disclosed.

The SEC declared the S‑4 effective on February 27, 2026 and the definitive joint proxy statement/prospectus relating to the S‑4 was filed with the SEC on February 27, 2026.

Known Trends and Uncertainties

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

• We believe the increasing focus on the reduction of greenhouse gas emissions and new and evolving related regulatory requirements, are 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 greenhouse gas emissions are reasonably likely to impact our profitability in both the short and long-term.

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

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

In 2025, 70% of emissions under the ETS scope will be impacted, and in 2026, all in scope emissions will be impacted.

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In 2026, all in scope emissions will be impacted.

Recent geopolitical uncertainty may impact our results of operations and may heighten other risks discussed in “Item 1A.

Risk Factors,” included in the Form 10-K.

Statistical Information

Three Months Ended

Nine Months Ended

2025 2024 2025 2024

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

27.5 28.1 77.1 76.0

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

24.6 25.2 72.3 71.7

Occupancy percentage (d) 103 % 103 %

Passengers carried (in millions)

3.8 3.9 10.3 10.3

Fuel consumption in metric tons (in millions)

0.7 0.7 2.1 2.2

Fuel consumption in metric tons per thousand ALBDs 28.9 30.3

Fuel cost per metric ton consumed (excluding European Union Allowance (“EU Allowances”)) $ 607 $ 670 $ 621 $ 680

Fuel cost per metric ton consumed (excluding emission allowances) $ 559 $ 643

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 August 31, 2025 compared to the three months ended August 31, 2024, we had a 2.5% capacity decrease in ALBDs comprised of a 3.1% capacity decrease in our North America segment and a 1.5% capacity decrease in our Europe segment.

Our North America segment’s capacity decrease was driven by the following:

• 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 decrease was driven by fewer ship operating days in 2025 compared to 2024.

For the nine months ended August 31, 2025 compared to the nine months ended August 31, 2024, we had a 0.9% capacity increase in ALBDs comprised of a 0.8% capacity increase in our North America segment and a 1.2% 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

• 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 North America segment’s capacity increase 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

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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.

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

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

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

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

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

Three Months Ended August 31, 2025 (“2025”) Compared to Three Months Ended August 31, 2024 (“2024”)

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

Passenger ticket revenues made up 65% of our 2026 total revenues.

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This increase was caused by:

• $215 million - higher ticket prices driven by continued strength in demand

• $158 million - net favorable foreign currency translation impact

These increases were partially offset by:

• $132 million - 2.5% capacity decrease in ALBDs

• $31 million - decrease in air transportation revenue

The remaining 33% of 2025 total revenues were comprised of onboard and other revenues, which increased by $66 million, or 2.5%, and were $2.7 billion in 2025 and 2024.

This increase was caused by:

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

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

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

This increase was driven by:

• $104 million - higher onboard spending by our guests

• $49 million - net favorable foreign currency translation impact

These increases were partially offset by a 2.5% capacity decrease in ALBDs, representing $65 million.

North America Segment

Passenger ticket revenues made up 61% of our North America segment’s 2026 total revenues.

Passenger ticket revenues increased by $15 million, or 0.4%, to $3.5 billion in 2025 from $3.4 billion in 2024.

This increase was caused by $156 million of higher ticket prices driven by continued strength in demand.

This increase was partially offset by:

• $105 million - 3.1% capacity decrease in ALBDs

• $31 million - decrease in air transportation revenue

The remaining 35% of our North America segment’s 2025 total revenues were comprised of onboard and other revenues, which increased by $12 million, or 0.6%, and were $1.9 billion in 2025 and 2024.

This increase was caused by $74 million of higher onboard spending by our guests, partially offset by a 3.1% capacity decrease in ALBDs, representing $57 million.

Passenger ticket revenues increased by $17 million, or 0.7%, and were $2.4 billion in 2026 and 2025.

This increase was caused by:

• $35 million - 1.4% capacity increase in ALBDs

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

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

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

This increase was caused by:

• $91 million - higher onboard spending by our guests

• $21 million - 1.4% capacity increase in ALBDs

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

Europe Segment

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Passenger ticket revenues increased by $172 million, or 12%, to $1.6 billion in 2026 from $1.4 billion in 2025.

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This increase was caused by:

• $158 million - net favorable foreign currency translation

• $59 million - higher ticket prices driven by continued strength in demand

• $36 million - 2.5 percentage point increase in occupancy

These increases were partially offset by a 1.5% capacity decrease in ALBDs, representing $27 million.

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

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

The remaining 23% of our Europe segment’s 2026 total revenues were comprised of Onboard and other revenues, which increased by $68 million, or 16%, to $480 million in 2026 from $413 million in 2025.

This increase was driven by:

• $33 million - net favorable foreign currency translation impact

• $16 million - higher onboard spending by our guests

This increase was driven by a net favorable foreign currency translation impact of $49 million.

Operating Expenses

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• $126 million - net unfavorable foreign currency translation

• $31 million - higher onboard and other cost of sales driven by higher onboard spending by our guests

• $29 million - higher cruise payroll and related expenses

• $29 million - higher port expenses

• $24 million - higher commissions, transportation costs, and other expenses driven by increased ticket pricing

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

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

• $19 million - 0.5% capacity increase in ALBDs

These increases were partially offset by:

• $109 million - 2.5% capacity decrease in ALBDs

• $26 million - lower fuel prices including the impact of the cost of EU allowances

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

• $27 million - lower fuel consumption per ALBD

Selling and administrative expenses increased by $76 million, or 9.0%, to $924 million in 2026 from $848 million in 2025.

Depreciation and amortization expenses increased by $66 million, or 10%, to $717 million in 2025 from $651 million in 2024.

This increase was driven by fleet enhancements.

North America Segment

Operating expenses decreased by $65 million, or 2.2%, to $2.9 billion in 2025 from $3.0 billion in 2024.

This decrease was caused by:

• $92 million - 3.1% capacity decrease in ALBDs

• $28 million - lower fuel prices including the impact of the cost of EU allowances

These decreases were partially offset by $23 million of higher cruise payroll and related expenses.

Selling and administrative expenses decreased by $19 million, or 4.2%, to $436 million in 2025 from $455 million in 2024.

Depreciation and amortization expenses increased by $37 million, or 8.8%, to $461 million in 2025 from $424 million in 2024.

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Europe Segment

Operating expenses increased by $135 million, or 12%, to $1.3 billion in 2025 from $1.2 billion in 2024.

This increase was driven by:

• $67 million - net unfavorable foreign currency translation

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

• $21 million - higher commissions, transportation costs, and other expenses driven by increased ticket pricing

Selling and administrative expenses increased by $22 million, or 9.8%, to $244 million in 2025 from $223 million in 2024.

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

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

This increase was driven by fleet enhancements.

Operating Income

Our consolidated operating income increased by $94 million to $2.3 billion in 2025 from $2.2 billion in 2024.

Our North America segment’s operating income increased by $73 million to $1.5 billion in 2025 from $1.4 billion in 2024, and our Europe segment’s operating income increased by $40 million to $810 million in 2025 from $770 million in 2024.

These changes were primarily due to the reasons discussed above.

Nonoperating Income (Expense)

Interest expense, net of capitalized interest decreased by $114 million, or 27%, to $317 million in 2025 from $431 million in 2024.

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

Debt extinguishment and modification costs increased by $98 million to $111 million in 2025 from $13 million in 2024 as a result of debt transactions occurring during the respective periods.

Nine Months Ended August 31, 2025 (“2025”) Compared to Nine Months Ended August 31, 2024 (“2024”)

Passenger ticket revenues made up 66% of our 2025 total revenues.

Passenger ticket revenues increased by $757 million, or 6.0%, to $13.4 billion in 2025 from $12.6 billion in 2024.

This increase was caused by:

• $494 million - higher ticket prices driven by continued strength in demand

• $118 million - 0.9% capacity increase in ALBDs

• $116 million - net favorable foreign currency translation impact

• $65 million - 0.5 percentage point increase in occupancy

These increases were partially offset by a decrease of $59 million in air transportation revenue.

The remaining 34% of 2025 total revenues were comprised of onboard and other revenues, which increased by $452 million, or 7.0%, to $6.9 billion in 2025 from $6.5 billion in 2024.

This increase was driven by:

• $334 million - higher onboard spending by our guests

• $53 million - 0.9% capacity increase in ALBDs

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North America Segment

Passenger ticket revenues made up 63% of our North America segment’s 2025 total revenues.

Passenger ticket revenues increased by $283 million, or 3.5%, to $8.5 billion in 2025 from $8.2 billion in 2024.

This increase was caused by:

• $273 million - higher ticket prices driven by continued strength in demand

• $65 million - 0.8% capacity increase in ALBDs

These increases were partially offset by a decrease of $65 million in air transportation revenue.

The remaining 37% of our North America segment’s 2025 total revenues were comprised of onboard and other revenues, which increased by $306 million, or 6.5%, to $5.0 billion in 2025 from $4.7 billion in 2024.

This increase was driven by:

• $267 million - higher onboard spending by our guests

• $38 million - 0.8% capacity increase in ALBDs

Europe Segment

Passenger ticket revenues made up 77% of our Europe segment’s 2025 total revenues.

Passenger ticket revenues increased by $452 million, or 10%, to $4.9 billion in 2025 from $4.5 billion in 2024.

This increase was driven by:

• $221 million - higher ticket prices driven by continued strength in demand

• $121 million - net favorable foreign currency translation

• $55 million - 1.3 percentage point increase in occupancy

• $53 million - 1.2% capacity increase in ALBDs

The remaining 23% of our Europe segment’s 2025 total revenues were comprised of onboard and other revenues, which increased by $143 million, or 11%, to $1.5 billion in 2025 from $1.3 billion in 2024.

This increase was driven by:

• $67 million - higher onboard spending by our guests

• $35 million - net favorable foreign currency translation impact

Operating Expenses

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

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• $35 million - 1.4% capacity increase in ALBDs

• $85 million - higher onboard and other cost of sales driven by higher onboard spending by our guests

• $63 million - higher commissions, transportation costs, and other expenses driven by increased ticket pricing and an increase in the number of guests

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

• $57 million - net unfavorable foreign currency translation

• $33 million - higher cruise payroll and related expenses

• $27 million - higher port expenses

These increases were partially offset by:

• $103 million - gains on the sales of one North America segment ship and one Europe segment ship

• $94 million - lower fuel prices including the impact of the cost of EU allowances

• $82 million - lower fuel consumption per ALBD

Selling and administrative expenses increased by $76 million, or 3.2%, and were $2.4 billion in 2025 and 2024.

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Depreciation and amortization expenses increased by $166 million, or 8.7%, to $2.1 billion in 2025 from $1.9 billion in 2024.

North America Segment

Operating expenses decreased by $11 million, or 0.1%, and were $8.0 billion in 2025 and 2024.

This decrease was caused by:

• $84 million - lower fuel prices including the impact of the cost of EU allowances

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

• $19 million - lower fuel consumption per ALBD

• $46 million - gain on sale of one ship

These decreases were partially offset by:

• $64 million - 0.8% capacity increase in ALBDs

• $48 million - higher onboard and other cost of sales driven by higher onboard spending by our guests

Selling and administrative expenses increased by $8 million, or 0.6%, and were $1.4 billion in 2025 and 2024.

Depreciation and amortization expenses increased by $108 million, or 8.8%, to $1.3 billion in 2025 from $1.2 billion in 2024.

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

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

Europe Segment

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• $129 million - net unfavorable foreign currency translation

• $49 million - higher commissions, transportation costs, and other expenses driven by increased ticket pricing and an increase in the number of guests

• $42 million - 1.2% capacity increase in ALBDs

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

• $38 million - higher onboard and other cost of sales driven by higher onboard spending by our guests

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

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

Selling and administrative expenses increased by $33 million, or 13%, to $283 million in 2026 from $250 million in 2025.

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

Depreciation and amortization expenses increased by $25 million, or 15%, to $194 million in 2026 from $169 million in 2025.

This increase was driven by fleet enhancements and increases in capacity.

This increase was caused by net unfavorable foreign currency translation impacts.

Operating Income

Our consolidated operating income increased by $735 million to $3.7 billion in 2025 from $3.0 billion in 2024.

Our North America segment’s operating income increased by $484 million to $2.7 billion in 2025 from $2.2 billion in 2024, and our Europe segment’s operating income increased by $260 million to $1.3 billion in 2025 from $1.1 billion in 2024.

Our consolidated operating income increased by $64 million to $607 million in 2026 from $543 million in 2025.

Our North America segment’s operating income increased by $54 million to $569 million in 2026 from $516 million in 2025, and our Europe segment’s operating income increased by $30 million to $170 million in 2026 from $140 million in 2025.

These changes were primarily due to the reasons discussed above.

Nonoperating Income (Expense)

Interest expense, net of capitalized interest decreased by $317 million, or 23%, to $1.0 billion in 2025 from $1.4 billion in 2024.

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

Debt extinguishment and modification costs increased by $288 million to $366 million in 2025 from $78 million in 2024 as a result of debt transactions occurring during the respective periods.

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Interest expense, net of capitalized interest decreased by $85 million, or 23%, to $291 million in 2026 from $377 million in 2025.

The decrease was caused by lower average interest rates and a decrease in total debt.

Other income (expense), net changed by $59 million, to $(47) million in 2026 from $12 million in 2025.

The decrease was substantially all due to foreign currency remeasurement.

Liquidity, Financial Condition and Capital Resources

As of August 31, 2025, we had $6.3 billion of liquidity including $1.8 billion of cash and cash equivalents and $4.5 billion available for borrowing under the Revolving Facility.

In additio n, we had $8.7 billion of undrawn export credit facilities to fund ship deliveries planned through 2033 .

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

We had a working capital deficit of $7.6 billion as of August 31, 2025 compared to a working capital deficit of $8.2 billion as of November 30, 2024.

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

We operate with a substantial working capital deficit.

This deficit is mainly attributable to the fact that, under our business model, substantially all of our passenger ticket receipts are collected in advance of the applicable sailing date.

These advance passenger receipts generally remain a current liability on our balance sheet until the sailing date.

The cash generated from these advance receipts is used interchangeably with cash on hand from other sources, such as our borrowings and other cash from operations.

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 $6.7 billion and $6.4 billion of current customer deposits as of August 31, 2025 and November 30, 2024.

As of February 28, 2026, we had $5.9 billion of liquidity including $1.4 billion of cash and cash equivalents and $4.5 billion available for borrowing under our multicurrency revolving credit facility .

In additio n, we had $10.9 billion of undrawn export credit facilities to fund future ship deliveries .

We had a working capital deficit of $8.7 billion as of February 28, 2026 compared to $8.9 billion as of November 30, 2025.

We operate with a substantial working capital deficit, largely due to our business model in which guest cruise deposits and the advance purchases of onboard and other services are collected ahead of the sailing date and recorded as a liability until recognized as revenue.

These customer deposits are used alongside other cash sources to fund operations, service debt, and support capital investments.

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

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Operating Activities

Our business provided $4.7 billion of net cash flows from operating activities during the nine months ended August 31, 2025, a decrease of $0.3 billion, compared to $5.0 billion provided for the same period in 2024.

This was driven by the nonrecurrence of cash provided by the release of $0.8 billion in credit card reserves in 2024 (included in the change in prepaid expenses and other assets), partially offset by an increase in net income compared to the same period in 2024.

Our business provided $1.3 billion of net cash flows from operating activities during the three months ended February 28, 2026, an increase of $0.3 billion, compared to $0.9 billion provided for the same period in 2025.

This was caused by an improvement in our earnings with $263 million of net income in 2026 compared to $75 million of net loss in 2025 and other working capital changes, partially offset by the nonrecurrence of losses on debt extinguishment.

Investing Activities

During the nine months ended August 31, 2025, net cash used in investing activities of $1.8 billion was caused by:

• Capital expenditures of $2.1 billion primarily attributable to ship improvements and development of our portfolio of exclusive destinations

• Proceeds of $312 million substantially all from the sales of one North America segment ship and one Europe segment ship

• Advances of $90 million made to Floating Docks S.

During the nine months ended August 31, 2024, net cash used in investing activities was $4.0 billion.

This was caused by capital expenditures of $4.0 billion primarily attributable to the delivery of two North America segment ships and one Europe segment ship.

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

During the three months ended February 28, 2025, net cash used in investing activities was $605 million.

This was caused by capital expenditures of $607 million primarily attributable to ship improvements and developments in our port destinations and exclusive islands.

Financing Activities

During the nine months ended August 31, 2025, net cash used in financing activities of $2.4 billion was caused by:

• Repayments of $10.7 billion of long-term debt

• Debt issuance costs of $68 million

• Debt extinguishment costs of $242 million

• Issuances of $8.6 billion of long-term debt

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During the nine months ended August 31, 2024, net cash used in financing activities of $2.0 billion was driven by:

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

• Repayments of $945 million of long-term debt

• Payments of cash dividends of $208 million

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

• Repayments of $3.4 billion of long-term debt

7 unchanged sentences

2026 2027 2028 2029 2030 Thereafter

Future export credit facilities at August 31, 2025

Future export credit facilities at February 28, 2026

$ — $ 1.4 $ 1.4 $ 1.7 $ 1.5 $ 5.0

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

At August 31, 2025 , we were in compliance with the applicable covenants under our debt agreements.

In September 2025, Sun Princess II borrowed $0.8 billion under an export credit facility due in semi-annual installments through 2037.

At February 28, 2026 , we were in compliance with the applicable covenants under our debt agreements.

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