UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 2018August 31, 2023
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission file number: 001-9610
carnivalflaga01a01a02.jpg
Commission file number: 001-15136
Carnival Corporation
image0a03.jpg
Carnival plc
Carnival CorporationCarnival plc
(Exact name of registrant as

specified in its charter)
(Exact name of registrant as

specified in its charter)
Republic of PanamaEngland and Wales
(State or other jurisdiction of

incorporation or organization)
(State or other jurisdiction of

incorporation or organization)
59-156297698-0357772
(I.R.S. Employer Identification No.)(I.R.S. Employer Identification No.)
3655 N.W. 87th Avenue
Miami, Florida 33178-2428
Carnival House, 100 Harbour Parade
Southampton SO15 1ST, United Kingdom
Miami,
Florida33178-2428SouthamptonSO15 1STUnited Kingdom
(Address of principal

executive offices)

(Zip Code)
(Address of principal

executive offices)

(Zip Code)
(305) 599-2600011 44 23 8065 5000
(Registrant’s telephone number,
including area code)
(Registrant’s telephone number,
including area code)
NoneNone
(Former name, former address
and former fiscal year, if
changed since last report)
(Former name, former address
and former fiscal year, if
changed since last report)

(305)599-260001144 23 8065 5000
(Registrant’s telephone number,
including area code)		(Registrant’s telephone number,
including area code)
NoneNone
(Former name, former address
and former fiscal year, if
changed since last report)		(Former name, former address
and former fiscal year, if
changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock ($0.01 par value)CCLNew York Stock Exchange, Inc.
Ordinary Shares each represented by American Depository Shares ($1.66 par value), Special Voting Share, GBP 1.00 par value and Trust Shares of beneficial interest in the P&O Princess Special Voting TrustCUKNew York Stock Exchange, Inc.
1.000% Senior Notes due 2029CUK29New York Stock Exchange LLC

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrants have submitted electronically and posted on their corporate Web sites, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files). Yes ☑ No ☐
Indicate by check mark whether the registrants are large accelerated filers, accelerated filers, non-accelerated filers, smaller reporting companies, or emerging growth companies. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filers☑Accelerated filers☐Non-accelerated filers☐
Smaller reporting companies

☐
Emerging growth companies

☐

1

If emerging growth companies, indicate by check mark if the registrants have elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
At March 15, 2018,September 22, 2023, Carnival Corporation had outstanding 534,352,2221,119,445,229 shares of Common Stock, $0.01 par value.At March 15, 2018,September 22, 2023, Carnival plc had outstanding 207,338,276186,815,096 Ordinary Shares $1.66 par value, one Special Voting Share, GBP 1.00 par value and 534,352,2221,119,445,229 Trust Shares of beneficial interest in the P&O Princess Special Voting Trust.


2
Table of Contents
CARNIVAL CORPORATION & PLC
TABLE OF CONTENTS
Page
Item 1.
4
Page
PART I - FINANCIAL INFORMATION
Item 1.
Financial Statements
3
Item 2.
1626
Item 3.
2633
Item 4.
2734
Item 1.
2835
Item 1A.��
2835
Item 2.
2835
Item 6.5.
3035
Item 6.
36
3238


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Table of Contents
PART I - FINANCIAL INFORMATION


Item 1. Financial Statements.


CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(UNAUDITED)
(in millions, except per share data)
 Three Months Ended
August 31,		Nine Months Ended
August 31,
 2023202220232022
Revenues
  Passenger ticket$4,546 $2,595 $10,557 $4,753 
Onboard and other2,308 1,711 5,640 3,577 
6,854 4,305 16,197 8,329 
Operating Expenses
  Commissions, transportation and other823 565 2,097 1,141 
  Onboard and other752 537 1,785 1,060 
  Payroll and related585 563 1,768 1,601 
  Fuel468 668 1,492 1,577 
  Food364 259 1,000 586 
  Ship and other impairments— — — 8 
  Other operating928 787 2,546 2,118 
Cruise and tour operating expenses3,921 3,379 10,688 8,092 
Selling and administrative713 625 2,162 1,774 
Depreciation and amortization596 581 1,774 1,707 
5,230 4,585 14,624 11,573 
Operating Income (Loss)1,624 (279)1,572 (3,244)
Nonoperating Income (Expense)
 Interest income59 24 183 34 
 Interest expense, net of capitalized interest(518)(422)(1,600)(1,161)
 Debt extinguishment and modification costs(81)— (112)— 
 Other income (expense), net(19)(81)(67)(108)
(559)(479)(1,595)(1,235)
Income (Loss) Before Income Taxes1,065 (759)(23)(4,478)
Income Tax Benefit (Expense), Net9 (11)(3)(17)
Net Income (Loss)$1,074 $(770)$(26)$(4,495)
Earnings Per Share
Basic$0.85 $(0.65)$(0.02)$(3.89)
Diluted$0.79 $(0.65)$(0.02)$(3.89)
 Three Months Ended
February 28,
 2018 2017
Revenues   
Cruise   
  Passenger ticket$3,148
 $2,804
  Onboard and other1,071
 978
Tour and other13
 9
 4,232
 3,791
Operating Costs and Expenses   
Cruise   
  Commissions, transportation and other663
 569
  Onboard and other140
 125
  Payroll and related558
 519
  Fuel359
 297
  Food264
 251
  Other ship operating711
 661
Tour and other14
 13
 2,709
 2,435
Selling and administrative616
 549
Depreciation and amortization488
 439
 3,813
 3,423
Operating Income419
 368
Nonoperating Income (Expense)   
Interest income3
 2
Interest expense, net of capitalized interest(48) (51)
Gains on fuel derivatives, net16
 27
Other income, net1
 8
 (28) (14)
Income Before Income Taxes390
 354
Income Tax Expense, Net—
 (2)
Net Income$391
 $352
Earnings Per Share   
Basic$0.54
 $0.48
Diluted$0.54
 $0.48
Dividends Declared Per Share$0.45
 $0.35

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

4

Table of Contents
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(in millions)
 Three Months Ended
February 28,
 2018 2017
Net Income$391
 $352
Items Included in Other Comprehensive Income
 
Change in foreign currency translation adjustment292
 1
Other3
 14
Other Comprehensive Income295
 15
Total Comprehensive Income$686
 $367
 Three Months Ended
August 31,		Nine Months Ended
August 31,
 2023202220232022
Net Income (Loss)$1,074 $(770)$(26)$(4,495)
Items Included in Other Comprehensive Income (Loss)
Change in foreign currency translation adjustment(17)(283)82 (529)
Other24 1 4 6 
Other Comprehensive Income (Loss)7 (282)86 (523)
Total Comprehensive Income (Loss)$1,081 $(1,052)$60 $(5,018)
The accompanying notes are an integral part of these consolidated financial statements.



5
Table of Contents
CARNIVAL CORPORATION & PLC
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except par values)
 February 28,
2018		 November 30,
2017
ASSETS   
Current Assets   
Cash and cash equivalents$453
 $395
Trade and other receivables, net345
 312
Inventories394
 387
Prepaid expenses and other475
 502
  Total current assets1,667
 1,596
Property and Equipment, Net35,027
 34,430
Goodwill3,014
 2,967
Other Intangibles1,198
 1,200
Other Assets535
 585
 $41,441
 $40,778
LIABILITIES AND SHAREHOLDERS’ EQUITY   
Current Liabilities   
Short-term borrowings$1,108
 $485
Current portion of long-term debt1,006
 1,717
Accounts payable795
 762
Accrued liabilities and other1,653
 1,877
Customer deposits4,288
 3,958
  Total current liabilities8,851
 8,800
Long-Term Debt7,445
 6,993
Other Long-Term Liabilities764
 769
Contingencies
 
Shareholders’ Equity   
Common stock of Carnival Corporation, $0.01 par value; 1,960 shares authorized; 656 shares at 2018 and 655 shares at 2017 issued7
 7
Ordinary shares of Carnival plc, $1.66 par value; 217 shares at 2018 and 2017 issued358
 358
Additional paid-in capital8,708
 8,690
Retained earnings23,360
 23,292
Accumulated other comprehensive loss(1,486) (1,782)
Treasury stock, 122 shares at 2018 and 2017 of Carnival Corporation and 35 shares at 2018 and 32 shares at 2017 of Carnival plc, at cost(6,565) (6,349)
  Total shareholders’ equity24,382
 24,216
 $41,441
 $40,778
 August 31, 2023November 30, 2022
ASSETS
Current Assets
Cash and cash equivalents$2,842 $4,029 
Restricted cash18 1,988 
Trade and other receivables, net485 395 
Inventories483 428 
Prepaid expenses and other855 652 
  Total current assets4,683 7,492 
Property and Equipment, Net39,952 38,687 
Operating Lease Right-of-Use Assets, Net1,277 1,274 
Goodwill579 579 
Other Intangibles1,168 1,156 
Other Assets2,098 2,515 
$49,756 $51,703 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Short-term borrowings$— $200 
Current portion of long-term debt1,780 2,393 
Current portion of operating lease liabilities153 146 
Accounts payable1,103 1,050 
Accrued liabilities and other2,017 1,942 
Customer deposits5,955 4,874 
  Total current liabilities11,008 10,605 
Long-Term Debt29,516 31,953 
Long-Term Operating Lease Liabilities
1,180 1,189 
Other Long-Term Liabilities1,091 891 
Contingencies and Commitments
Shareholders’ Equity
Carnival Corporation common stock, $0.01 par value; 1,960 shares authorized; 1,250 shares at 2023 and 1,244 shares at 2022 issued12 12 
Carnival plc ordinary shares, $1.66 par value; 217 shares at 2023 and 2022 issued361 361 
Additional paid-in capital16,699 16,872 
Retained earnings233 269 
Accumulated other comprehensive income (loss) (“AOCI”)(1,896)(1,982)
Treasury stock, 130 shares at 2023 and 2022 of Carnival Corporation and 73 shares at 2023 and 72 shares at 2022 of Carnival plc, at cost(8,449)(8,468)
  Total shareholders’ equity6,960 7,065 
$49,756 $51,703 
The accompanying notes are an integral part of these consolidated financial statements.

6
Table of Contents
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in millions)
 Nine Months Ended
August 31,
 20232022
OPERATING ACTIVITIES
Net income (loss)$(26)$(4,495)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation and amortization1,774 1,707 
Impairments19 8 
(Gain) loss on debt extinguishment99 — 
(Income) loss from equity-method investments16 — 
Share-based compensation43 79 
Amortization of discounts and debt issue costs126 131 
Noncash lease expense109 103 
Gain on sales of ships(54)(6)
Other39 36 
2,145 (2,438)
Changes in operating assets and liabilities
Receivables(99)(134)
Inventories(43)(87)
Prepaid expenses and other assets74 (716)
Accounts payable31 176 
Accrued liabilities and other155 262 
Customer deposits1,097 1,383 
Net cash provided by (used in) operating activities3,359 (1,553)
INVESTING ACTIVITIES
Purchases of property and equipment(2,609)(3,759)
Proceeds from sales of ships260 55 
Purchase of short-term investments— (315)
Proceeds from maturity of short-term investments— 515 
Other28 37 
Net cash provided by (used in) investing activities(2,322)(3,467)
FINANCING ACTIVITIES
Repayments of short-term borrowings(200)(114)
Principal repayments of long-term debt(6,828)(1,073)
Debt issuance costs(116)(116)
Debt extinguishment costs(67)— 
Proceeds from issuance of long-term debt2,961 3,334 
Proceeds from issuance of common stock5 1,180 
Proceeds from issuance of common stock under the Stock Swap Program22 89 
Purchase of treasury stock under the Stock Swap Program(20)(82)
Other14 — 
Net cash provided by (used in) financing activities(4,229)3,217 
Effect of exchange rate changes on cash, cash equivalents and restricted cash25 (67)
Net increase (decrease) in cash, cash equivalents and restricted cash(3,166)(1,870)
Cash, cash equivalents and restricted cash at beginning of period6,037 8,976 
Cash, cash equivalents and restricted cash at end of period$2,870 $7,107 
 Three Months Ended February 28,
 2018 2017
OPERATING ACTIVITIES   
Net income$391
 $352
Adjustments to reconcile net income to net cash provided by operating activities   
Depreciation and amortization488
 439
Gains on fuel derivatives, net(16) (27)
Share-based compensation18
 20
Other, net24
 20
 904
 804
Changes in operating assets and liabilities   
Receivables(30) (2)
Inventories1
 (35)
Prepaid expenses and other98
 (10)
Accounts payable19
 (47)
Accrued liabilities and other(198) 3
Customer deposits271
 219
Net cash provided by operating activities1,064
 932
INVESTING ACTIVITIES   
Purchases of property and equipment(574) (412)
Payments of fuel derivative settlements(21) (52)
Other, net4
 (10)
Net cash used in investing activities(591) (474)
FINANCING ACTIVITIES   
Proceeds from (repayments of) short-term borrowings, net611
 (289)
Principal repayments of long-term debt(963) (101)
Proceeds from issuance of long-term debt469
 100
Dividends paid(323) (254)
Purchases of treasury stock(218) (69)
Other, net(4) (2)
Net cash used in financing activities(428) (615)
Effect of exchange rate changes on cash and cash equivalents12
 (9)
Net increase (decrease) in cash and cash equivalents58
 (166)
Cash and cash equivalents at beginning of period395
 603
Cash and cash equivalents at end of period$453
 $437

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

7

Table of Contents
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(UNAUDITED)
(in millions)
Three Months Ended
Common
stock		Ordinary
shares		Additional
paid-in
capital		Retained
earnings
(accumulated deficit)		AOCITreasury
stock		Total shareholders’ equity
At May 31, 2023$12 $361 $16,684 $(841)$(1,903)$(8,449)$5,865 
Net income (loss)— — — 1,074 — — 1,074 
Other comprehensive income (loss)— — — — 7 — 7 
Share-based compensation and other— — 15 — — — 15 
At August 31, 2023$12 $361 $16,699 $233 $(1,896)$(8,449)$6,960 
At May 31, 2022$11 $361 $15,457 $2,649 $(1,742)$(8,476)$8,260 
Net income (loss)— — — (770)— — (770)
Other comprehensive income (loss)— — — — (282)— (282)
Issuances of common stock, net1 — 1,148 — — — 1,149 
Issuance of treasury shares for vested share-based awards— — — (12)— 12 — 
Share-based compensation and other— — 22 — — — 22 
At August 31, 2022$12 $361 $16,626 $1,868 $(2,024)$(8,464)$8,379 

8
Table of Contents
Nine Months Ended
Common
stock		Ordinary
shares		Additional
paid-in
capital		Retained
earnings		AOCITreasury
stock		Total shareholders’ equity
At November 30, 2022$12 $361 $16,872 $269 $(1,982)$(8,468)$7,065 
Change in accounting principle (a)— — (229)(10)— — (239)
Net income (loss)— — — (26)— — (26)
Other comprehensive income (loss)— — — — 86 — 86 
Issuances of common stock, net— — 5 — — — 5 
Conversion of Convertible Notes— — 3 — — — 3 
Purchases and issuances under the Stock Swap program, net— — 22 — — (20)2 
Issuance of treasury shares for vested share-based awards— — (41)— — 41 — 
Share-based compensation and other— — 67 — — (2)65 
At August 31, 2023$12 $361 $16,699 $233 $(1,896)$(8,449)$6,960 
At November 30, 2021$11 $361 $15,292 $6,448 $(1,501)$(8,466)$12,144 
Net income (loss)— — — (4,495)— — (4,495)
Other comprehensive income (loss)— — — — (523)— (523)
Issuances of common stock, net1 — 1,178 — — — 1,180 
Purchases and issuances under the Stock Swap program, net— — 89 — — (82)8 
Issuance of treasury shares for vested share-based awards— — — (84)— 84 — 
Share-based compensation and other— — 67 (1)— — 66 
At August 31, 2022$12 $361 $16,626 $1,868 $(2,024)$(8,464)$8,379 
The accompanying notes are an integral part of these consolidated financial statements.

(a)We adopted the provisions of Debt - Debt with Conversion and Other Options and Derivative and Hedging - Contracts in Entity’s Own Equity on December 1, 2022.


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Table of Contents
CARNIVAL CORPORATION & PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1 – General


The consolidated financial statements include the accounts of Carnival Corporation and Carnival plc and their respective subsidiaries. Together with their consolidated subsidiaries, they are referred to collectively in these consolidated financial statements and elsewhere in this joint Quarterly Report on Form 10-Q as “Carnival Corporation & plc,” “our,” “us” and “we.”


Liquidity

As of August 31, 2023, we had $5.7 billion of liquidity including cash and cash equivalents and borrowings available under our $1.7 billion, €1.0 billion and £0.2 billion multi-currency revolving credit facility (the “Revolving Facility”). We believe that we have sufficient liquidity to fund our obligations and expect to remain in compliance with our financial covenants for at least the next twelve months from the issuance of these financial statements. Refer to Note 3 - “Debt” for additional details regarding the applicable financial covenants.

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

Basis of Presentation

The Consolidated Statements of Income and(Loss), the Consolidated Statements of Comprehensive Income for the three months ended February 28, 2018 and 2017, the Consolidated Balance Sheet at February 28, 2018 and(Loss), the Consolidated Statements of Cash Flows and the Consolidated Statements of Shareholders’ Equity for the three and nine months ended February 28, 2018August 31, 2023 and 20172022, and the Consolidated Balance Sheet at August 31, 2023 are unaudited and, in the opinion of our management, contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement. Our interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in the Carnival Corporation & plc 20172022 joint Annual Report on Form 10-K (“Form 10-K”) filed with the U.S. Securities and Exchange Commission on January 29, 2018.27, 2023. Our operations are seasonal and results for interim periods are not necessarily indicative of the results for the entire year.

Use of Estimates and Risks and Uncertainty

The preparation of our interim consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported and disclosed. The full extent to which the effects of the pandemic, inflation, higher fuel prices, higher taxes, higher interest rates and fluctuations in foreign currency rates will directly or indirectly impact our business, operations, results of operations and financial condition, including our valuation of goodwill and trademarks, impairment of ships and collectability of trade and notes receivables, will depend on future developments that are uncertain. We have made reasonable estimates and judgments of such items within our financial statements and there may be changes to those estimates in future periods.

Accounting Pronouncements


TheIn March 2020, the Financial Accounting Standards Board (the “FASB”(“FASB”) issued amended guidance, Compensation - Retirement Benefits - ImprovingReference Rate Reform: Facilitation of the PresentationEffects of Net Periodic Pension Cost and Net Periodic Postretirement Benefit CostReference Rate Reform on Financial Reporting, which requiresprovides temporary optional expedients and exceptions to accounting guidance on contract modifications and hedge accounting to ease entities’ financial reporting burdens as the bifurcation of service costsmarket transitions from the London Interbank Offered Rate (“LIBOR”) and other componentsinterbank offered rates to alternative reference rates. In December 2022, the FASB deferred the date through which this guidance can be applied from December 31, 2022 to December 31, 2024. We adopted this new guidance during 2022 and applied it prospectively to contract modifications related to a change in reference rate. As of net benefit cost.August 31, 2023, all of our outstanding debt and derivative instruments referenced to U.S. dollar LIBOR were transitioned to Term Secured Overnight Financing Rate (“SOFR”). The presentationadoption of this guidance did not have a material impact on our consolidated financial statements.

The FASB issued guidance, Debt - Debt with Conversion and Other Options and Derivative and Hedging - Contracts in Entity’s Own Equity, which simplifies the accounting for convertible instruments. This guidance eliminates certain models that require separate accounting for embedded conversion features, in certain cases. Additionally, among other changes, the guidance eliminates certain of the other componentsconditions for equity classification for contracts in an entity’s own equity. The guidance also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and
10
Table of net benefit cost have been recordedContents
include the effect of share settlement for instruments that may be settled in other income.cash or shares, except for certain liability-classified share-based payment awards. On December 1, 2017,2022, we adopted this guidance using the modified retrospective transition method for the presentationapproach to recognize our convertible notes as single unit liability instruments, as they do not qualify as derivatives under ASC 815, Derivatives and Hedging, and were not issued at a substantial premium. Accordingly, upon adoption we recorded a $239 million increase to debt, primarily as a result of the service cost component and other componentsreversal of net benefit cost.the remaining non-cash convertible debt discount, as well as a reduction of $229 million to additional paid in capital. The impactcumulative effect of adopting this guidance was immaterial to our consolidated financial statements, and as such, prior period information was not revised.

The FASB issued guidance, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. When effective, this standard will replace most existing revenue recognition guidance in U.S. generally accepted accounting principles (“U.S. GAAP”). The standard also requires more detailed disclosures and provides additional guidance for transactions that were not comprehensively addressed in U.S. GAAP. This guidance is required to be adopted by us in the first quarter of 2019 and can be applied using either a retrospective or a modified retrospective approach. Based on our assessment to date, the adoption of this guidance is not expectedresulted in a $10 million decrease to have a material impact toretained earnings.

In September 2022, the timing of our recognition of revenue and will require additional disclosures. We are currently evaluating if this guidance will have any other impact on our consolidated financial statements.

The FASB issued amended guidance, Business CombinationsLiabilities-Supplier Finance Programs - ClarifyingDisclosure of Supplier Finance Program Obligations. This guidance requires that a buyer in a supplier finance program disclose sufficient information about the Definitionprogram to allow a user of a Business,which assists entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. This guidance is required to be adopted by us in the first quarter of 2019 on a prospective basis. Early adoption is permitted, including adoption in an interim period. The adoption of this guidance is not expected to have a material impactimprove financial reporting by requiring new disclosures about the programs, thereby allowing financial statement users to our consolidated financial statements.

The FASB issued amended guidance, Statementbetter consider the effect of Cash Flows - Classification of Certain Cash Receiptsthe programs on an entity’s working capital, liquidity, and Cash Payments, which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments are aimed at reducing the existing diversity in practice. This guidance is required to be adopted by us in the first quarter of 2019 and must be applied using a retrospective approach for each period presented. Early adoption is permitted, including adoption in an interim period. The adoption of this guidance is not expected to have a material impact to our consolidated financial statements.

The FASB issued amended guidance, Statement of Cash Flows - Restricted Cash, which requires restricted cash to be presented with cash and cash equivalents in the statement of cash flows. This guidance is required to be adopted by us in the first quarter of 2019 and must be applied using a retrospective approach to each period presented. Early adoption is permitted, including adoption in an interim period. The adoption of this guidance is not expected to have a material impact to our consolidated financial statements.

The FASB issued amended guidance, Service Concession Arrangements,2024, except for the amendment on roll forward information which clarifies that the grantor in a service arrangement should be considered the customer of the operating entity in all cases. This guidance is required to be adopted by

us in the first quarter of 2019 and can be applied using either a retrospective or a modified retrospective approach. We are currently evaluating the impact this guidance will have on our consolidated financial statements.

The FASB issued guidance, Leases, which requires an entity to recognize both assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. This guidance is required to be adopted by us infor the first quarter of 2020 and must be applied using a modified retrospective approach. Early adoption is permitted. Basedfinancial year commencing on our assessment to date, the initial adoption of this guidance is expected to increase both our total assets and total liabilities and will require additional disclosures. We are currently evaluating if this guidance will have any other impact on our consolidated
financial statements.

The FASB issued guidance, Derivatives and Hedging, which targeted improvements to accounting for hedging activities such as hedging strategies, effectiveness assessments, and recognition of derivative gains or losses. This guidance is required to be adopted by us in the first quarter of 2020 and must be applied using a modified retrospective approach. Early adoption is permitted.December 1, 2024. We are currently evaluating the impact thisof the new guidance will have on the disclosures to our consolidated financial statements.


Other

NOTE 2 – Revenue and Expense Recognition
Cruise
Guest cruise deposits and advance onboard purchases are initially included in customer deposits when received. Customer deposits are subsequently recognized as cruise revenues, together with revenues from onboard and other activities, and all associated direct costs and expenses of a voyage are recognized as cruise costs and expenses, upon completion of voyages with durations of ten nights or less and on a pro rata basis for voyages in excess of ten nights. The impact of recognizing these shorter duration cruise revenues and costs and expenses on a completed voyage basis versus on a pro rata basis is not material. Certain of our product offerings are bundled and we allocate the value of the bundled services and goods between passenger ticket revenues and onboard and other revenues based upon the estimated standalone selling prices of those goods and services. Guest cancellation fees, when applicable, are recognized in passenger ticket revenues at the time of cancellation.

Our sales to guests of air and other transportation to and from airports near the home ports of our ships are included in passenger ticket revenues, and the related costs of purchasing these services are included in transportation costs. The proceeds that we collect from the sales of third-party shore excursions are included in onboard and other revenues and the related costs are included in onboard and other costs. The amounts collected on behalf of our onboard concessionaires, net of the amounts remitted to them, are included in onboard and other revenues as concession revenues. All of these amounts are recognized on a completed voyage or pro rata basis as discussed above.

Passenger ticket revenues include fees, taxes and charges collected by us from our guests. The portion of thesefees, taxes and charges that vary with guest head counts and are directly imposed on a revenue-producing arrangement are expensed in commissions, transportation and other costs when the corresponding revenues are recognized. For the three and nine months ended August 31, fees, taxes, and charges included in passenger ticket revenues and commissions, transportation and other costs were $148$211 million and $143$555 million in 2023 and $141 million and $305 million in 2022. The remaining portion of fees, taxes and charges are expensed in other operating expenses when the corresponding revenues are recognized.

Revenues and expenses from our hotel and transportation operations, which are included in our Tour and Other segment, are recognized at the time the services are performed.

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Customer Deposits

Our payment terms generally require an initial deposit to confirm a reservation, with the balance due prior to the voyage. Cash received from guests in advance of the cruise is recorded in customer deposits and in other long-term liabilities on our Consolidated Balance Sheets. These amounts include refundable deposits. In certain situations, we have provided flexibility to guests by allowing guests to rebook at a future date, receive future cruise credits (“FCCs”) or elect to receive refunds in cash. We have at times issued enhanced FCCs. Enhanced FCCs provide the guest with an additional credit value above the original cash deposit received, and the enhanced value is recognized as a discount applied to the future cruise in the period used. We record a liability for unexpired FCCs to the extent we have received and not refunded cash from guests for cancelled bookings. We had total customer deposits of $6.3 billion as of August 31, 2023 and $5.1 billion as of November 30, 2022, which includes approximately $160 million of unredeemed FCCs as of August 31, 2023, of which approximately $114 million are refundable. Given the lack of comparable historical experience of FCC redemptions, we are unable to estimate the amount of FCCs that will be used in future periods or that may be refunded. Refunds payable to guests who have elected cash refunds are recorded in accounts payable. During the nine months ended August 31, 2023 and 2022, we recognized revenues of $3.9 billion and $1.7 billion related to our customer deposits as of November 30, 2022 and 2021. Our customer deposits balance changes due to the seasonal nature of cash collections, the recognition of revenue, refunds of customer deposits and foreign currency changes.

Trade and Other Receivables

Although we generally require full payment from our customers prior to or concurrently with their cruise, we grant credit terms to a relatively small portion of our revenue source. We have receivables from credit card merchants and travel agents for cruise ticket purchases and onboard revenue. These receivables are included within trade and other receivables, net and are less allowances for expected credit losses. We have agreements with a number of credit card processors that transact customer deposits related to our cruise vacations. Certain of these agreements allow the credit card processors to request, under certain circumstances, that we provide a reserve fund in cash. These reserve funds are included in other assets.

Contract Costs

We recognize incremental travel agent commissions and credit and debit card fees incurred as a result of obtaining the ticket contract as assets when paid prior to the start of a voyage. We record these amounts within prepaid expenses and other and subsequently recognize these amounts as commissions, transportation and other at the time of revenue recognition or at the time of voyage cancellation. We had incremental costs of obtaining contracts with customers recognized as assets of $272 million as of August 31, 2023 and $218 million as of November 30, 2022.

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NOTE 3 – Debt

August 31,November 30,
(in millions)MaturityRate (a) (b)20232022
Secured Subsidiary Guaranteed
Notes
NotesFeb 202610.5%$— $775 
EUR NotesFeb 202610.1%— 439 
NotesJun 20277.9%192 192 
NotesAug 20279.9%870 900 
NotesAug 20284.0%2,406 2,406 
NotesAug 20297.0%500 — 
Loans
EUR floating rateJun 2025EURIBOR + 3.8%844 808 
Floating rateJun 2025 - Oct 2028SOFR + 3.0 - 3.3%3,576 4,101 
          Total Secured Subsidiary Guaranteed8,388 9,621 
Senior Priority Subsidiary Guaranteed
NotesMay 202810.4%2,030 2,030 
Unsecured Subsidiary Guaranteed
Revolver
Facility(c)(c)— 200 
Notes
Convertible NotesApr 20235.8%— 96 
Convertible NotesOct 20245.8%426 426 
NotesMar 20267.6%1,362 1,450 
EUR NotesMar 20267.6%544 517 
NotesMar 20275.8%3,260 3,500 
Convertible NotesDec 20275.8%1,131 1,131 
NotesMay 20296.0%2,000 2,000 
NotesJun 203010.5%1,000 1,000 
Loans
Floating rateJul 2024 - Sep 2024LIBOR + 3.8%— 590 
GBP floating rateFeb 2025SONIA + 0.9%— 419 
EUR floating rate (d)Apr 2024 - Mar 2026EURIBOR + 2.4 - 4.0%716 827 
Export Credit Facilities
Floating rateDec 2031SOFR + 0.8% (e)583 1,246 
Fixed rateAug 2027 - Dec 20322.4 - 3.4%2,870 3,143 
EUR floating rateMay 2024 - Nov 2034EURIBOR + 0.2 - 0.8%3,165 3,882 
EUR fixed rateFeb 2031 - Jul 20371.1 - 3.4%3,640 2,592 
          Total Unsecured Subsidiary Guaranteed20,698 23,019 
Unsecured Notes (No Subsidiary Guarantee)
NotesOct 20237.2%125 125 
NotesJan 20286.7%200 200 
EUR NotesOct 20291.0%653 620 
          Total Unsecured Notes (No Subsidiary Guarantee)978 945 
Total Debt32,093 35,615 
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Less: unamortized debt issuance costs and discounts(797)(1,069)
Total Debt, net of unamortized debt issuance costs and discounts31,296 34,546 
Less: short-term borrowings— (200)
Less: current portion of long-term debt(1,780)(2,393)
Long-Term Debt$29,516 $31,953 

(a)The reference rates, together with any applicable credit adjustment spread, for substantially all of our variable debt have 0.0% to 0.75% floors. During 2023, we amended certain of our variable debt instruments to change the reference rate from LIBOR to SOFR.
(b)The above debt table excludes the impact of any outstanding derivative contracts. The interest rates on some of our debt fluctuate based on the applicable rating of senior unsecured long-term securities of Carnival Corporation or Carnival plc.
(c)See “Short-Term Borrowings” below.
(d)In March 2023, we entered into an amendment of a EUR floating rate loan to extend maturity through April 2024.
(e)The interest rate for the three months ended February 28, 2018unsecured floating rate export credit facility for the current interest period is referenced to LIBOR.

Carnival Corporation and/or Carnival plc is the primary obligor of all our outstanding debt excluding the following:
•$0.5 billion under a term loan facility of Costa Crociere S.p.A. (“Costa”), a subsidiary of Carnival plc
•$2.0 billion of senior priority notes (the “2028 Senior Priority Notes”) issued by Carnival Holdings (Bermuda) Limited (“Carnival Holdings”), a subsidiary of Carnival Corporation
•$0.2 billion under an export credit facility of Sun Princess Limited, a subsidiary of Carnival Corporation
•$0.1 billion under an export credit facility of Sun Princess II Limited, a subsidiary of Carnival Corporation

In addition, Carnival Holdings (Bermuda) II Limited (“Carnival Holdings II”) will be the primary obligor under a $2.1 billion multi-currency revolving facility (“New Revolving Facility”) when the New Revolving Facility replaces our Revolving Facility upon its maturity in August 2024. See “New Revolving Facility.”

All of our outstanding debt is issued or guaranteed by substantially the same entities with the exception of the following:
•Up to $250 million of the Costa term loan facility, which is guaranteed by certain subsidiaries of Carnival plc and 2017, respectively.Costa that do not guarantee our other outstanding debt

•Our 2028 Senior Priority Notes, issued by Carnival Holdings, which does not guarantee our other outstanding debt
•The export credit facilities of Sun Princess Limited and Sun Princess II Limited, which do not guarantee our other outstanding debt
NOTE 2 – Unsecured Debt

As of August 31, 2023, the scheduled maturities of our debt are as follows:
At February 28, 2018,
(in millions)
YearPrincipal Payments
4Q 2023$462 
20242,046 
20252,211 
20263,194 
20276,690 
Thereafter17,490 
Total$32,093 

Short-Term Borrowings

As of August 31, 2023, we did not have short-term borrowings. As of November 30, 2022, our short-term borrowings consisted of euro-$0.2 billion under our Revolving Facility. We may continue to borrow or otherwise utilize available amounts under the Revolving Facility through August 2024, subject to satisfaction of the conditions in the facility. We had $2.9 billion available for borrowing under our Revolving Facility as of August 31, 2023. The Revolving Facility bears interest at a rate of term SOFR, in relation to any loan in U.S. dollars, EURIBOR, in relation to any loan in euros or daily compounding SONIA, in relation to any loan in sterling, plus a margin based on the long-term credit ratings of Carnival Corporation and also includes an
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emissions linked margin adjustment whereby, after the initial applicable margin is set per the margin pricing grid, the margin may be adjusted based on performance in achieving certain agreed annual carbon emissions goals. We are required to pay a commitment fee on any unutilized portion.

New Revolving Facility

In February 2023, Carnival Holdings II entered into the New Revolving Facility. The New Revolving Facility may be utilized beginning on August 6, 2024, and will replace our Revolving Facility upon its maturity in August 2024. The termination date of the New Revolving Facility is August 6, 2025, subject to two, mutual one-year extension options. The new facility also contains an accordion feature, allowing for additional commitments, up to an aggregate of $2.9 billion, which are the aggregate commitments under our Revolving Facility.
Borrowings under the New Revolving Facility will bear interest at a rate of term SOFR, in relation to any loan in U.S. dollar-denominated commercial paperdollars, EURIBOR, in relation to any loan in euros or daily compounding SONIA, in relation to any loan in sterling, plus a margin based on the long-term credit ratings of $862Carnival Corporation. The New Revolving Facility also includes an emissions linked margin adjustment whereby, after the initial applicable margin is set per the margin pricing grid, the margin may be adjusted based on performance in achieving certain agreed annual carbon emissions goals. In addition, we are required to pay certain fees on the aggregate unused commitments under the New Revolving Facility and the Revolving Facility.

In connection with the New Revolving Facility, Carnival Corporation, Carnival plc and its subsidiaries will contribute three unencumbered vessels (net book value of $3.0 billion as of August 31, 2023) to Carnival Holdings II (which must be completed no later than February 28, 2024). Each of the vessels will continue to be operated under one of the Carnival Corporation & plc brands. Carnival Holdings II does not guarantee our other outstanding debt.

Term Loan Refinancing

In August 2023, we issued $500 million aggregate principal amount of 7.0% first-priority senior secured notes due on August 15, 2029 (the “2029 Senior Secured Notes”) and borrowed an aggregate principal amount of $1.3 billion under a euro-denominated banknew senior secured first lien term loan B facility, which bears interest at a rate per annum equal to SOFR (with a 0.75% floor) plus 3.0% and matures on August 8, 2027 (the “New Secured Term Loan Facility”). We used the proceeds from these borrowings to prepay borrowings outstanding under our existing first-priority senior secured term loan facility maturing in 2025. The 2029 Senior Secured Notes and borrowings under the New Secured Term Loan Facility are fully and unconditionally guaranteed, jointly and severally, on a first-priority senior secured basis by Carnival plc and certain of $246 million dueour subsidiaries that also guarantee our existing first- and second-priority secured indebtedness, certain of our unsecured notes and our convertible notes. The 2029 Senior Secured Notes and borrowings under the New Secured Term Loan Facility are included within the total Secured Subsidiary Guaranteed balance in 2019. Forthe debt table above.

Redemptions and Retirements

During the three months ended August 31, 2023, we redeemed the outstanding principal amount of $775 million of our 10.5% second-priority senior secured notes due in 2026 and the outstanding principal amount of $465 million of our 10.1% second-priority senior secured EUR notes due in 2026, and retired $30 million aggregate principal amount of our 9.9% second-priority senior secured notes due in 2027. Our second-priority senior secured notes are included within the total Secured Subsidiary Guaranteed balance in the debt table above. In addition, we retired $240 million aggregate principal amount of our 5.8% unsecured notes due in 2027, $88 million aggregate principal amount of our 7.6% unsecured notes due in 2026 and $750 million of our unsecured loans maturing from 2024 through 2025. Our unsecured notes and loans are included within the total Unsecured Subsidiary Guaranteed balance in the debt table above.

Export Credit Facility Borrowings

During the nine months ended August 31, 2023, we borrowed $1.1 billion under export credit facilities due in semi-annual installments through 2037. In addition, we paid down $1.0 billion of floating rate unsecured borrowings mostly with 2023 and 2024 maturities. As of August 31, 2023, the net book value of the vessels subject to negative pledges was $15.7 billion.

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Collateral and Priority Pool

As of August 31, 2023, the net book value of our ships and ship improvements, excluding ships under construction, is $37.3 billion. Our secured debt is secured on either a first or second-priority basis, depending on the instrument, by certain collateral, which includes vessels and certain assets related to those vessels and material intellectual property (combined net book value of approximately $23.2 billion, including $21.6 billion related to vessels and certain assets related to those vessels) as of August 31, 2023 and certain other assets.

As of August 31, 2023, $8.2 billion in net book value of our ships and ship improvements relate to the priority pool vessels included in the priority pool of 12 unencumbered vessels (the “Senior Priority Notes Subject Vessels”) for our 2028 Senior Priority Notes. As of August 31, 2023, there was no change in the identity of the Senior Priority Notes Subject Vessels.

Covenant Compliance

Our Revolving Facility, New Revolving Facility, unsecured loans and export credit facilities contain certain covenants listed below:

•Maintain minimum interest coverage (adjusted EBITDA to consolidated net interest charges, as defined in the agreements) (the “Interest Coverage Covenant”) as follows:
◦For certain of our unsecured loans and our New Revolving Facility, from the end of each fiscal quarter from August 31, 2024, at a ratio of not less than 2.0 to 1.0 for each testing date occurring from August 31, 2024 until May 31, 2025, at a ratio of not less than 2.5 to 1.0 for the August 31, 2025 and November 30, 2025 testing dates, and at a ratio of not less than 3.0 to 1.0 for the February 28, 20182026 testing date onwards and 2017,as applicable through their respective maturity dates. In addition, for our remaining unsecured loans that contain this covenant, we had borrowingsentered into letter agreements to waive compliance with the covenant through the May 31, 2024 testing date.
◦For our export credit facilities, from the end of $2 millioneach fiscal quarter from May 31, 2024, at a ratio of not less than 2.0 to 1.0 for each testing date occurring from May 31, 2024 until May 31, 2025, at a ratio of not less than 2.5 to 1.0 for the August 31, 2025 and $111 millionNovember 30, 2025 testing dates, and repaymentsat a ratio of $0 millionnot less than 3.0 to 1.0 for the February 28, 2026 testing date onwards
•For certain of our unsecured loans and $240 millionexport credit facilities, maintain minimum issued capital and consolidated reserves (as defined in the agreements) of commercial paper$5.0 billion
•Limit our debt to capital (as defined in the agreements) percentage to a percentage not to exceed 72.5% until the August 31, 2023 testing date, following which it will be tested at levels which decline ratably to 65% from the May 31, 2024 testing date onwards
•Maintain minimum liquidity as follows:
◦For our New Revolving Facility, minimum liquidity of $1.5 billion; provided, that if any commitments maturing on June 30, 2025 under our existing first-priority senior secured term loan facility are outstanding on the March 31, 2025 testing date, our minimum liquidity on such testing date cannot be less than the greater of (i) the aggregate outstanding amount of such first-lien term loan facility commitments and (ii) $1.5 billion
◦For our other unsecured loans and export credit facilities that contain this covenant, $1.5 billion through November 30, 2026
•Adhere to certain restrictive covenants through August 2025
•Limit the amounts of our secured assets as well as secured and other indebtedness

At August 31, 2023, we were in compliance with original maturities greater than three months.the applicable covenants under our debt agreements. Generally, if an event of default under any debt agreement occurs, then, pursuant to cross default and/or cross-acceleration clauses therein, substantially all of our outstanding debt and derivative contract payables could become due, and our debt and derivative contracts could be terminated. Any financial covenant amendment may lead to increased costs, increased interest rates, additional restrictive covenants and other available lenderprotections that would be applicable.


In December 2017, we borrowed $469 million under a sterling-denominated floating rate bank loan due in 2022 and repaid a $500 million bond.
16

In January 2018, we repaid $365 million
Table of euro-denominated floating rate bank loans prior to their 2018 and 2021 maturity dates.Contents

We use the net proceeds from our borrowings for payments related to the purchases of new ships and general corporate purposes.

NOTE 34 – Contingencies and Commitments

Litigation
In
We are routinely involved in legal proceedings, claims, disputes, regulatory matters and governmental inspections or investigations arising in the normalordinary course of or incidental to our business, variousincluding those noted below. Additionally, as a result of the impact of COVID-19, litigation claims, enforcement actions, regulatory actions and lawsuitsinvestigations, including, but not limited to, those arising from personal injury and loss of life, have been filed or are pendingand may, in the future, be asserted against us. MostWe expect many of these claims and lawsuits areactions, or any settlement of these claims and actions, to be covered by insurance and historically the maximum amount of our liability, net of any insurance recoverables, is typicallyhas been limited to our self-insurance retention levels.

We record provisions in the consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated.

Legal proceedings and government investigations are subject to inherent uncertainties, and unfavorable rulings or other events could occur. Unfavorable resolutions could involve substantial monetary damages. In addition, in matters for which conduct remedies are sought, unfavorable resolutions could include an injunction or other order prohibiting us from selling one or more products at all or in particular ways, precluding particular business practices or requiring other remedies. An unfavorable outcome might result in a material adverse impact on our business, results of operations, financial position or liquidity.

As previously disclosed, on May 2, 2019, the Havana Docks Corporation filed a lawsuit against Carnival Corporation in the U.S. District Court for the Southern District of Florida under Title III of the Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton Act, alleging that Carnival Corporation “trafficked” in confiscated Cuban property when certain ships docked at certain ports in Cuba, and that this alleged “trafficking” entitles the plaintiffs to treble damages. The hearings on motions for summary judgment were concluded on January 18, 2022. On March 21, 2022, the court granted summary judgment in favor of Havana Docks Corporation as to liability. On August 31, 2022, the court determined that the trebling provision of the Helms-Burton statute applies to damages and interest and accordingly, we adjusted our estimated liability for this matter. On December 30, 2022, the court entered judgment against Carnival in the amount of $110 million plus $4 million in fees and costs. We have filed a notice of appeal and on June 30, 2023, we filed our opening appellate brief.

As previously disclosed, on April 8, 2020, DeCurtis LLC (“DeCurtis”), a former vendor, filed an action against Carnival Corporation in the U.S. District Court for the Middle District of Florida seeking declaratory relief that DeCurtis is not infringing on several of Carnival Corporation’s patents in relation to its OCEAN Medallion systems and technology. On April 10, 2020, Carnival Corporation filed an action against DeCurtis in the U.S. District Court for the Southern District of Florida for breach of contract, trade secrets violations and patent infringement. These two cases were consolidated in the Southern District of Florida. On March 10, 2023, the jury returned a verdict finding that DeCurtis had breached its contract with Carnival Corporation and infringed on the Carnival Corporation patent. The jury awarded Carnival Corporation a total of $21 million in damages. On April 30, 2023, DeCurtis filed for bankruptcy protection in the United States Bankruptcy Court for the District of Delaware. Carnival Corporation is defending its interests in the bankruptcy matter.

COVID-19 Actions

We have been named in a number of individual actions related to COVID-19. These actions include tort claims based on a variety of theories, including negligence and failure to warn. The plaintiffs in these actions allege a variety of injuries: some plaintiffs confined their claim to emotional distress, while others allege injuries arising from testing positive for COVID-19. A smaller number of actions include wrongful death claims. Substantially all of these individual actions have now been dismissed or settled for immaterial amounts.

As of August 31, 2023, 11 purported class actions have been brought by former guests in several U.S. federal courts, the Federal Court in Australia, and in Italy. These actions include tort claims based on a variety of theories, including negligence, gross negligence and failure to warn, physical injuries and severe emotional distress associated with being exposed to and/or contracting COVID-19 onboard. As of August 31, 2023, nine of these class actions have either been settled individually for immaterial amounts or had their class allegations dismissed by the courts and only the Australian and Italian matters remain. We believe the ultimate outcome of these claims and lawsuitsmatters will not have a material impact on our consolidated financial statements.

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

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

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Regulatory or Governmental Inquiries and Investigations

We have been, and may continue to be, impacted by breaches in data security and lapses in data privacy, which occur from time to time. These can vary in scope and range from inadvertent events to malicious motivated attacks.

We have incurred legal and other costs in connection with cyber incidents that have impacted us. The penalties and settlements paid in connection with cyber incidents over the last three years were not material. While these incidents did not have a material adverse effect on our business, results of operations, financial position or liquidity, no assurances can be given about the future and we may be subject to future litigation, attacks or incidents that could have such a material adverse effect.

On March 14, 2022, the U.S. Department of Justice and the U.S. Environmental Protection Agency notified us of potential civil penalties and injunctive relief for alleged Clean Water Act violations by owned and operated vessels covered by the 2013 Vessel General Permit. We are working with these agencies to reach a resolution of this matter. We believe the ultimate outcome will not have a material impact on our consolidated financial statements.

Other Contingent Obligations – Indemnifications
Some of the debt contracts we enter into include indemnification provisions obligating us to make payments to the counterparty if certain events occur. These contingencies generally relate to changes in taxes or changes in laws which increase ourthe lender’s costs. There are no stated or notional amounts included in the indemnification clauses, and we are not able to estimate the maximum potential amount of future payments, if any, under these indemnification clauses.


We have agreements with a number of credit card processors that transact customer deposits related to our cruise vacations. Certain of these agreements allow the credit card processors to request, under certain circumstances, that we provide a reserve fund in cash. Although the agreements vary, these requirements may generally be satisfied either through a withheld percentage of customer payments or providing cash funds directly to the credit card processor. We continue to expect to provide reserve funds under these agreements. During the third quarter, $912 million of previously provided reserve funds related to our customer deposits to satisfy these requirements were returned to us.

As of August 31, 2023 and November 30, 2022, we had $1.3 billion and $1.7 billion in reserve funds. Additionally, as of August 31, 2023 and November 30, 2022, we had $242 million and $229 million in compensating deposits we are required to maintain and $30 million of cash collateral in escrow. These balances are included within other assets. In addition, during the third quarter we provided $413 million in restricted cash deposits which became unrestricted in August 2023.

Ship Commitments

As of August 31, 2023, we expect the timing of our new ship growth capital commitments to be as follows:
(in millions)
Year
Remainder of 2023$267 
20242,422 
2025957 
Thereafter— 
$3,645 

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NOTE 45 – Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks
Fair Value Measurements
Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and is measured using inputs in one of the following three categories:
•Level 1 measurements are based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.
•Level 2 measurements are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or market data other than quoted prices that are observable for the assets or liabilities.
•Level 3 measurements are based on unobservable data that are supported by little or no market activity and are significant to the fair value of the assets or liabilities.
Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, certain estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized in a current or future market exchange.



Financial Instruments that are not Measured at Fair Value on a Recurring Basis
February 28, 2018 November 30, 2017 August 31, 2023November 30, 2022
Carrying
Value		 Fair Value Carrying
Value		 Fair Value Carrying
Value		Fair ValueCarrying
Value		Fair Value
(in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3(in millions)Level 1Level 2Level 3Level 1Level 2Level 3
Assets      
       
Long-term other assets (a)$117
 $—
 $43
 $71
 $126
 $—
 $49
 $75
LiabilitiesLiabilities
Fixed rate debt (a)Fixed rate debt (a)$23,208 $— $21,581 $— $23,542 $— $18,620 $— 
Floating rate debt (a)Floating rate debt (a)8,885 — 7,899 — 12,074 — 10,036 — 
Total$117
 $—
 $43
 $71
 $126
 $—
 $49
 $75
Total$32,093 $— $29,481 $— $35,615 $— $28,656 $— 
Liabilities      
       
Fixed rate debt (b)$5,168
 $—
 $5,418
 $—
 $5,588
 $—
 $5,892
 $—
Floating rate debt (b)4,442
 —
 4,488
 —
 3,658
 —
 3,697
 —
Total$9,610
 $—
 $9,906
 $—
 $9,246
 $—
 $9,589
 $—
 
(a)Long-term other assets are comprised of notes receivable. The fair values of our Level 2 notes receivable were based on estimated future cash flows discounted at appropriate market interest rates. The fair values of our Level 3 notes receivable were estimated using risk-adjusted discount rates.
(b)The debt amounts above do not include the impact of interest rate swaps or debt issuance costs. The fair values of our publicly-traded notes were based on their unadjusted quoted market prices in markets that are not sufficiently active to be Level 1 and, accordingly, are considered Level 2. The fair values of our other debt were estimated based on current market interest rates being applied to this debt.

(a)The debt amounts above do not include the impact of interest rate swaps or debt issuance costs and discounts. The fair values of our publicly-traded notes were based on their unadjusted quoted market prices in markets that are not sufficiently active to be Level 1 and, accordingly, are considered Level 2. The fair values of our other debt were estimated based on current market interest rates being applied to this debt.


Financial Instruments that are Measured at Fair Value on a Recurring Basis
 August 31, 2023November 30, 2022
(in millions)Level 1Level 2Level 3Level 1Level 2Level 3
Assets
Cash equivalents (a)$1,505 $— $— $2,589 $— $— 
Restricted cash (b)28 — — 1,988 — — 
Derivative financial instruments— 27 — — 1 — 
Total$1,533 $27 $— $4,576 $1 $— 
Liabilities
Derivative financial instruments$— $26 $— $— $— $— 
Total$— $26 $— $— $— $— 

(a)Consists of money market funds and cash investments with original maturities of less than 90 days.
(b)The restricted cash amount at August 31, 2023 includes $10 million, which is included in other assets.
19
 February 28, 2018 November 30, 2017
(in millions)Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Assets           
Cash and cash equivalents$453
 $—
 $—
 $395
 $—
 $—
Restricted cash29
 —
 —
 26
 —
 —
Marketable securities held in rabbi trusts (a)6
 —
 —
 97
 —
 —
Derivative financial instruments—
 17
 —
 —
 15
 —
Total$488
 $17
 $—
 $518
 $15
 $—
Liabilities           
Derivative financial instruments$—
 $130
 $—
 $—
 $161
 $—
Total$—
 $130
 $—
 $—
 $161
 $—
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(a)The use of marketable securities held in rabbi trusts is restricted to funding certain deferred compensation and non-qualified U.S. pension plans.
Nonfinancial Instruments that are Measured at Fair Value on a Nonrecurring Basis
Valuation of Goodwill and Other IntangiblesTrademarks 
 Goodwill
(in millions)NAA (a)
Segment		 EA (b)
Segment		 Total
At November 30, 2017$1,898
 $1,069
 $2,967
Foreign currency translation adjustment—
 47
 47
At February 28, 2018$1,898
 $1,115
 $3,014
 (a)North America & Australia (“NAA”)
 (b)Europe & Asia (“EA”)
 Trademarks
(in millions)NAA
Segment		 EA
Segment		 Total
At November 30, 2017$927
 $252
 $1,179
Foreign currency translation adjustment—
 11
 11
At February 28, 2018$927
 $263
 $1,190

The determinationAs of July 31, 2023, we performed our reporting unitannual goodwill and trademark fair values includes numerous assumptions that are subject to various risksimpairment reviews and uncertainties. We believe that we have made reasonable estimatesdetermined there was no impairment for goodwill or trademarks.
As of August 31, 2023 and judgments. A change in the conditions, circumstances or strategy, may result in a need to recognize an impairment charge.November 30, 2022, goodwill for our North America and Australia (“NAA”) segment was $579 million.

Trademarks
(in millions)NAA
Segment		Europe
Segment		Total
November 30, 2022$927 $224 $1,151 
Exchange movements— 12 12 
August 31, 2023$927 $236 $1,163 


Derivative Instruments and Hedging Activities
(in millions)Balance Sheet LocationAugust 31, 2023November 30, 2022
Derivative assets
Derivatives designated as hedging instruments
Interest rate swaps (a)Prepaid expenses and other$25 $1 
Other assets— 1 
Derivatives not designated as hedging instruments
Interest rate swaps (a)Prepaid expenses and other1 — 
Total derivative assets$27 $1 
Derivative liabilities
Derivatives designated as hedging instruments
Cross currency swaps (b)Other long-term liabilities$9 $— 
Interest rate swaps (a)Other long-term liabilities16 — 
Total derivative liabilities$26 $— 


(in millions)Balance Sheet Location February 28, 2018 November 30, 2017
Derivative assets     
Derivatives designated as hedging instruments     
Net investment hedges (a)Prepaid expenses and other $4
 $3
Foreign currency zero cost collars (b)Prepaid expenses and other 13
 12
Total derivative assets  $17
 $15
Derivative liabilities     
Derivatives designated as hedging instruments     
Net investment hedges (a)Accrued liabilities and other $17
 $13
 Other long-term liabilities 21
 17
Interest rate swaps (c)Accrued liabilities and other 10
 10

Other long-term liabilities 14
 17
   63
 57
Derivatives not designated as hedging instruments     
Fuel (d)Accrued liabilities and other 67
 95
 Other long-term liabilities —
 9
   67
 104
Total derivative liabilities  $130
 $161
(a)We have interest rate swaps whereby we receive EURIBOR-based floating interest rate payments in exchange for making fixed interest rate payments. These interest rate swap agreements effectively changed $70 million at August 31, 2023 and $89 million at November 30, 2022 of EURIBOR-based floating rate euro debt to fixed rate euro debt. As of August 31, 2023, these EURIBOR-based interest rate swaps were not designated as cash flow hedges. As of November 30, 2022, one of these swaps was designated as a cash flow hedge. During the nine months ended August 31, 2023 we entered into interest rate swap agreements which effectively changed $2.5 billion at August 31, 2023 of variable rate debt to fixed rate debt. At August 31, 2023, these interest rate swaps settle through 2027 and are designated as cash flow hedges.
(a)At February 28, 2018 and November 30, 2017, we had foreign currency swaps totaling $337 million and $324 million, respectively, that are designated as hedges of our net investments in foreign operations with a euro-denominated functional currency. At February 28, 2018, these foreign currency swaps settle through September 2019.
(b)At February 28, 2018 and November 30, 2017, we had foreign currency derivatives consisting of foreign currency zero cost collars that are designated as foreign currency cash flow hedges for a portion of our euro-denominated shipbuilding payments. See “Newbuild Currency Risks” below for additional information regarding these derivatives.
(c)We have euro interest rate swaps designated as cash flow hedges whereby we receive floating interest rate payments in exchange for making fixed interest rate payments. These interest rate swap agreements effectively changed $485 million at February 28, 2018 and $479 million at November 30, 2017 of EURIBOR-based floating rate euro debt to fixed rate euro debt. At February 28, 2018, these interest rate swaps settle through March 2025.
(d)At February 28, 2018 and November 30, 2017, we had fuel derivatives consisting of zero cost collars on Brent crude oil (“Brent”) to cover a portion of our estimated fuel consumption through 2018. See “Fuel Price Risks” below for additional information regarding these derivatives.

(b)At August 31, 2023, we had a cross currency swap totaling $663 million that is designated as a hedge of our net investment in foreign operations with euro-denominated functional currencies. At August 31, 2023, this cross currency swap settles through 2024.

Our derivative contracts include rights of offset with our counterparties. We have elected to net certainAs of August 31, 2023 and November 30, 2022, there was no netting for our derivative assets and liabilities within counterparties.liabilities. The amounts that were not offset in the balance sheet were not material.

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  February 28, 2018
(in millions) Gross Amounts Gross Amounts Offset in the Balance Sheet Total Net Amounts Presented in the Balance Sheet Gross Amounts not Offset in the Balance Sheet Net Amounts
Assets $17
 $—
 $17
 $(5) $12
Liabilities $130
 $—
 $130
 $(5) $125
           
  November 30, 2017
(in millions) Gross Amounts Gross Amounts Offset in the Balance Sheet Total Net Amounts Presented in the Balance Sheet Gross Amounts not Offset in the Balance Sheet Net Amounts
Assets $15
 $—
 $15
 $(8) $7
Liabilities $161
 $—
 $161
 $(8) $153

The effective gain (loss) portionseffect of our derivatives qualifying and designated as hedging instruments recognized in other comprehensive income were(loss) and in net income (loss) was as follows:
 Three Months Ended
August 31,		Nine Months Ended
August 31,
(in millions)2023202220232022
Gains (losses) recognized in AOCI:
Cross currency swaps – net investment hedges - included component$(10)$40 $(1)$72 
Cross currency swaps – net investment hedges - excluded component$1 $(7)$(3)$(26)
Interest rate swaps – cash flow hedges$25 $1 $6 $10 
Gains (losses) reclassified from AOCI – cash flow hedges:
Interest rate swaps – Interest expense, net of capitalized interest$12 $— $22 $(1)
Foreign currency zero cost collars – Depreciation and amortization$— $1 $1 $2 
Gains (losses) recognized on derivative instruments (amount excluded from effectiveness testing – net investment hedges)
Cross currency swaps – Interest expense, net of capitalized interest$3 $2 $7 $5 
 Three Months Ended
February 28,
(in millions)2018 2017
Net investment hedges$(6) $1
Foreign currency zero cost collars – cash flow hedges$1
 $8
Interest rate swaps – cash flow hedges$4
 $2
There are no credit risk related contingent features in our derivative agreements, except for bilateral credit provisions within our fuel derivative counterparty agreements. These provisions require cash collateral to be posted or received to the extent the fuel derivative fair value payable to or receivable from an individual counterparty exceeds $100 million. At February 28, 2018 and November 30, 2017, no collateral was required to be posted to or received from our fuel derivative counterparties.
The amount of gains and losses on derivatives not designated as hedging instruments recognized in earnings during the three and nine months ended August 31, 2023 and estimated cash flow hedges’ unrealized gains and losses that are expected to be reclassified to earnings in the next twelve months isare not significant. material.

Financial Risks
Fuel Price Risks
We manage our exposure to fuel price risk by managing our consumption of fuel. Substantially all of our exposure to market risk for changes in fuel prices relates to the consumption of fuel on our ships. We have Brent call optionsmanage fuel consumption through fleet optimization, improving our existing fleet’s energy efficiency, designing more energy-efficient itineraries and Brent put options, collectively referred to as zero cost collars, that establish ceiling and floor prices and mitigate a portion of our economic risk attributable to potential fuel price increases. To maximize operational flexibility we utilized derivative markets with significant trading liquidity.investing in new technologies, including alternative fuels.
Our zero cost collars are based on Brent prices whereas the actual fuel used on our ships is marine fuel. Changes in the Brent prices may not show a high degree of correlation with changes in our underlying marine fuel prices. We will not realize any economic gain or loss upon the monthly maturities of our zero cost collars unless the average monthly price of Brent is above the ceiling price or below the floor price. We believe that these zero cost collars will act as economic hedges; however, hedge accounting is not applied.
 Three Months Ended
February 28,
(in millions)2018
2017
Unrealized gains on fuel derivatives, net$32

$72
Realized losses on fuel derivatives, net(16)
(45)
Gains on fuel derivatives, net$16
 $27
At February 28, 2018, our outstanding fuel derivatives consisted of zero cost collars on Brent as follows:
Maturities (a)Transaction
Dates		 Barrels
(in thousands)		 Weighted-Average
Floor Prices		 Weighted-Average
Ceiling Prices
Fiscal 2018       
 January 2014 2,025
 $75
 $110
 October 2014 2,250
 $80
 $114
   4,275
    
(a)Fuel derivatives mature evenly over each month in 2018.

Foreign Currency Exchange Rate Risks
Overall Strategy
We manage our exposure to fluctuations in foreign currency exchange rates through our normal operating and financing activities, including netting certain exposures to take advantage of any natural offsets and, when considered appropriate, through the use of derivative and non-derivative financial instruments. Our primary focus is to monitor our exposure to, and manage, the economic foreign currency exchange risks faced by our operations and realized if we exchange one currency for another. We currently only hedgeconsider hedging certain of our ship commitments and net investments in foreign operations. The financial impacts of theour hedging instruments we do employ generally offset the changes in the underlying exposures being hedged.

Operational Currency Risks

Our operations primarily utilize the U.S. dollar, Euro, Sterling or the Australian dollar euro or sterling as their functional currencies. Our operations also have revenue and expenses denominated in non-functional currencies. Movements in foreign currency exchange rates will affect our financial statements.

Investment Currency Risks

We consider our investments in foreign operations to be denominated in stable currencies. Our investments in foreign operations arecurrencies and of a long-term nature. We have $5.6 billionpartially mitigate the currency exposure of our investments in foreign operations by designating a portion of our foreign currency debt and $924derivatives as hedges of these investments. As of August 31, 2023, we had a cross currency swap with a notional amount of $663 million, which is designated as a hedge of our net investments in foreign operations. During 2023, we also had sterling-denominated debt designated as a non-derivative hedge of our net investment in foreign operations. The $450 million principal balance of this sterling-denominated debt was repaid in July 2023. For the three and nine months ended August 31, 2023, we recognized $29 million and $38 million of euro- and sterling-denominatedlosses on these net investment hedges in the cumulative translation adjustment section of other comprehensive income (loss). We also have euro-denominated debt respectively, including the effect of foreign currency swaps, which provides an economic offset for our operations with euro and sterling functional currency. We also partially mitigate our net investment currency exposures by denominating a portion
21
Table of our foreign currency intercompany payables in our foreign operations’ functional currencies. Contents

Newbuild Currency Risks


Our shipbuilding contracts are typically denominated in euros. Our decision to hedge a non-functional currency ship commitment for our cruise brands is made on a case-by-case basis, considering the amount and duration of the exposure, market volatility, economic trends, our overall expected net cash flows by currency and other offsetting risks. We use foreign currency derivative contracts to manage foreign currency exchange rate risk for some of our ship construction payments. At February 28, 2018, for the following newbuilds, we had foreign currency zero cost collars for a portion of euro-denominated shipyard payments. These collars are designated as cash flow hedges.
 Entered Into Matures in Weighted-Average Floor Rate Weighted- Average Ceiling Rate
Carnival Horizon2016 March 2018 $1.02
 $1.25
Seabourn Ovation2016 April 2018 $1.02
 $1.25
Nieuw Statendam2016 November 2018 $1.05
 $1.25
If the spot rate is between the ceiling and floor rates on the date of maturity, then we would not owe or receive any payments under these collars.
At February 28, 2018,August 31, 2023, our remaining newbuild currency exchange rate risk primarily relates to euro-denominated newbuild contract payments for non-euro functional currency brands, which represent a total unhedged commitment of $8.2$3.2 billion and substantially relates tofor newbuilds scheduled to be delivered in 2019 through 2022 to non-euro functional currency brands.2025.
The cost of shipbuilding orders that we may place in the future that isare denominated in a different currency than our cruise brands’ functional currency will be affected by foreign currency exchange rate fluctuations. These foreign currency exchange rate fluctuations may affect our decision to order new cruise ships.

Interest Rate Risks

We manage our exposure to fluctuations in interest rates through our debt portfolio management and investment strategies. We evaluate our debt portfolio to determine whether to make periodic adjustments to the mix of fixed and floating rate debt through the use of interest rate swaps and the issuance of new debt, amendment of existing debt or early retirement of existing debt.



Concentrations of Credit Risk


As part of our ongoing control procedures, we monitor concentrations of credit risk associated with financial and other institutions with which we conduct significant business. We seek to minimizemanage these credit risk exposures, including counterparty nonperformance primarily associated with our cash and cash equivalents, investments, committednotes receivables, reserve funds related to customer deposits, future financing facilities, contingent obligations, derivative instruments, insurance contracts and new ship progress payment guarantees, by:


•Conducting business with large, well-established financial institutions, insurance companies and export credit agencies
•Diversifying our counterparties
•Having guidelines regarding credit ratings and investment maturities that we follow to help safeguard liquidity and minimize risk
•Generally requiring collateral and/or guarantees to support notes receivable on significant asset sales long-term ship charters and new ship progress payments to shipyards


We currently believe the risk of nonperformance by any of our significant counterparties is remote. At February 28, 2018, our exposures under foreign currency and fuel derivative contracts and interest rate swap agreements were not material. We also monitor the creditworthiness of travel agencies and tour operators in Asia, Australia and Europe which includes charter-hire agreements in Asia and credit and debit card providers to which we extend credit in the normal course of our business. Our credit exposure also includes contingent obligations related to cash payments received directly by travel agents and tour operators for cash collected by them on cruise sales in Australia and most of Europe where we are obligated to honor our guests’ cruise payments made by them to their travel agents and tour operators regardless of whether we have received these payments.

Concentrations of credit risk associated with these trade receivables and other receivables, charter-hire agreements and contingent obligations are not considered to be material, principally due to the large number of unrelated accounts, the nature of these contingent obligations and their short maturities. WeNormally, we have not experienced significant credit losses on our trade receivables, charter-hire agreements and contingent obligations. We do not normally requirerequired collateral or other security to support normal credit sales.sales and have not experienced significant credit losses.

NOTE 56 – Segment Information
We revised our operating segments due to changes in our internal reporting as a result of the recent strategic realignment of our business in Australia. The presentation of prior period segment information has been revised to reflect this change.
Our operating segments are reported on the same basis as the internally reported information that is provided to our chief operating decision maker (“CODM”), who is the President, Chief Executive Officer and Chief ExecutiveClimate Officer of Carnival Corporation and Carnival plc. The CODM assesses performance and makes decisions to allocate resources for Carnival Corporation & plc based upon review of the results across all of our segments. Our four reportable segments are comprised of (1) North America and AustraliaNAA cruise operations, (“NAA”), (2) Europe and Asia cruise operations (“EA”Europe”), (3) Cruise Support and (4) Tour and Other.


The operating segments within each of our NAA and EAEurope reportable segments have been aggregated based on the similarity of their economic and other characteristics.characteristics, including geographic guest sourcing. Our Cruise Support segment representsincludes our portfolio of leading port destinations and other services, all of which are operated for the benefit of our cruise brands. Our Tour
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and Other segment represents the hotel and transportation operations of Holland America Princess Alaska Tours and other operations.


Three Months Ended August 31,
(in millions)RevenuesOperating costs and
expenses		Selling
and
administrative		Depreciation
and
amortization		Operating
income (loss)
2023
NAA$4,566 $2,661 $420 $377 $1,107 
Europe (a)2,060 1,124 199 168 569 
Cruise Support56 30 87 47 (109)
Tour and Other172 105 7 3 56 
$6,854 $3,921 $713 $596 $1,624 
2022
NAA$2,880 $2,280 $368 $358 $(126)
Europe (a)1,266 983 173 172 (62)
Cruise Support41 21 78 36 (94)
Tour and Other118 94 6 15 3 
$4,305 $3,379 $625 $581 $(279)
Nine Months Ended August 31,
(in millions)RevenuesOperating costs and
expenses		Selling
and
administrative		Depreciation
and
amortization		Operating
income (loss)
2023
NAA$11,000 $7,132 $1,295 $1,115 $1,458 
Europe (a)4,819 3,303 634 506 376 
Cruise Support162 85 211 137 (271)
Tour and Other216 169 21 17 9 
$16,197 $10,688 $2,162 $1,774 $1,572 
2022
NAA$5,672 $5,335 $1,078 $1,046 $(1,787)
Europe (a)2,389 2,529 524 531 (1,196)
Cruise Support114 76 154 104 (220)
Tour and Other154 151 17 26 (40)
$8,329 $8,092 $1,774 $1,707 $(3,244)
 Three Months Ended February 28,
(in millions)Revenues Operating costs and
expenses		 Selling
and
administrative		 Depreciation
and
amortization		 Operating
income (loss)
2018         
NAA$2,684
 $1,658
 $367
 $299
 $360
EA1,503
 1,005
 188
 157
 154
Cruise Support32
 33
 55
 23
 (78)
Tour and Other13
 14
 6
 10
 (17)
Intersegment elimination—
 —
 —
 —
 —
 $4,232
 $2,709
 $616
 $488
 $419
2017         
NAA$2,517
 $1,557
 $333
 $289
 $338
EA1,226
 859
 159
 130
 78
Cruise Support39
 6
 55
 11
 (33)
Tour and Other9
 13
 2
 9
 (15)
Intersegment elimination—
 —
 —
 —
 —
 $3,791
 $2,435
 $549
 $439
 $368
(a) Beginning in the first quarter of 2023, we renamed the Europe and Asia segment to Europe segment.

A portion of the NAA segment’s revenues includes revenues for the tour portion of a cruise when a cruise and land tour package are sold togetherRevenue by Holland America Line and Princess Cruises. These intersegment tour revenues,geographic areas, which are also included inbased on where our Tour and Other segment,guests are eliminated by the NAA segment’s revenues and operating expenses in the line “Intersegment elimination.”sourced, were as follows:
Three Months Ended
August 31,		Nine Months Ended
August 31,
(in millions)2023202220232022
North America$4,253 $2,753 $9,937 $5,491 
Europe2,165 1,456 4,798 2,676 
Australia238 56 883 60 
Other198 40 578 101 
$6,854 $4,305 $16,197 $8,329 

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NOTE 67 – Earnings Per Share
 Three Months Ended
August 31,		Nine Months Ended
August 31,
(in millions, except per share data)2023202220232022
Net income (loss)$1,074 $(770)$(26)$(4,495)
Interest expense on dilutive convertible notes24 — — — 
Net income (loss) for diluted earnings per share$1,098 $(770)$(26)$(4,495)
Weighted-average shares outstanding1,263 1,185 1,262 1,154 
Dilutive effect of equity awards6 — — — 
Dilutive effect of convertible notes127 — — — 
Diluted weighted-average shares outstanding1,396 1,185 1,262 1,154 
Basic earnings per share$0.85 $(0.65)$(0.02)$(3.89)
Diluted earnings per share$0.79 $(0.65)$(0.02)$(3.89)
 Three Months Ended
February 28,
(in millions, except per share data)2018 2017
Net income for basic and diluted earnings per share$391
 $352
Weighted-average shares outstanding717
 725
Dilutive effect of equity plans2
 3
Diluted weighted-average shares outstanding719
 728
Basic earnings per share$0.54
 $0.48
Diluted earnings per share$0.54
 $0.48


Antidilutive shares excluded from diluted earnings per share computations were as follows:

Three Months Ended
August 31,		Nine Months Ended
August 31,
(in millions)2023202220232022
Equity awards— — 3 1 
Convertible Notes— 52 131 52 
Total antidilutive securities— 52 134 54 

NOTE 78 – Supplemental Cash Flow Information

(in millions)August 31, 2023November 30, 2022
Cash and cash equivalents (Consolidated Balance Sheets)$2,842 $4,029 
Restricted cash (Consolidated Balance Sheets)18 1,988 
Restricted cash (included in other assets)10 20 
Total cash, cash equivalents and restricted cash (Consolidated Statements of Cash Flows)$2,870 $6,037 

NOTE 9 – Property and Equipment

Ship Sales

During 2023, we completed the sale of two Europe segment ships and one NAA segment ship, which represents a passenger-capacity reduction of 3,970 berths for our Europe segment and 460 berths for our NAA segment. We will continue to operate the NAA segment ship under a bareboat charter agreement through September 2024. In addition, we entered into an agreement to sell one Europe segment ship which represents a passenger-capacity reduction of 1,270 berths.

NOTE 10 – Equity Method Investments

In July 2023, we entered into an agreement with our JV partner to exit our noncontrolling interest in Adora Cruises Limited (“Adora Cruises”), formerly CSSC Carnival Cruise Shipping Limited, a China-based cruise company. The transaction was completed in September 2023. During the third quarter, we recognized an impairment in our investment in Adora Cruises of $19 million, which is recorded within other income (expense).

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NOTE 11 – Shareholders’ Equity

We have a program that allows us to realize a net cash benefit when Carnival Corporation common stock is trading at a premium to the price of Carnival plc ordinary shares (the “Stock Swap Program”).

During the three months ended February 28, 2018,August 31, 2023 and 2022, there were no sales or repurchases under the Stock Swap Program. During the nine months ended August 31, 2023 and 2022, we repurchased 3.0sold 2.3 million shares of Carnival plc ordinary shares and 0.25.2 million shares of Carnival Corporation common stock for $204and repurchased the same amount of Carnival plc ordinary shares under the Stock Swap Program, resulting in net proceeds of $2 million and $12$8 million, respectively, under ourwhich were used for general authorization to repurchasecorporate purposes.

In addition, during the three months ended August 31, 2023 and 2022, there were no sales of Carnival Corporation common stock. During the nine months ended August 31, 2023 and 2022, we sold 0.5 million and 1.6 million shares of Carnival Corporation common stock and/or Carnival plc ordinary shares (the “Repurchase Program”)at an average price per share of $9.83 and $19.27, resulting in net proceeds of $5 million and $30 million. At February 28, 2018, the remaining availability under the Repurchase Program was $370 million.

Public Equity Offerings

During the three months ended February 28, 2018, our BoardsAugust 31, 2022, we completed a public equity offering of Directors declared a dividend to holders117.5 million shares of Carnival Corporation common stock and Carnival plc ordinary sharesat a price per share of $0.45 per share.$9.95, resulting in net proceeds of $1.2 billion.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.


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. 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 1934.1934, as amended. All statements other than statements of historical facts are statements that could be deemed forward-looking. These statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and the beliefs and assumptions of our management. 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”“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:
•    Net revenue yieldsPricing
•Adjusted net income (loss)
•Booking levels
•Adjusted EBITDA
•Occupancy
•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
•Net yields
•Liquidity and credit ratings
•Adjusted cruise costs per ALBD
•Investment grade leverage metrics
•Adjusted cruise costs excluding fuel per available lower berth dayALBD
•    Booking levels
•Estimates of ship depreciable lives and residual values
•    Pricing and occupancy
•    Goodwill, ship and trademark fair values
•    Interest, tax and fuel expenses
•    Liquidity
•    Currency exchange rates
•Adjusted earnings per sharereturn 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. It is not possibleAdditionally, many of these risks and uncertainties are currently, and in the future may continue to predict or identify all such risks.be, amplified by our substantial debt balance as a result of 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:

The demand for cruises may decline due to adverse•Events and conditions around the world, eventsincluding war and other military actions, such as the war in Ukraine, inflation, higher fuel prices, higher taxes, higher interest rates and other general concerns impacting the ability or desire of people to travel including conditionsaffectinghave led, and may in the safety and security of travel, government regulations and requirements, andfuture lead, to a decline in consumer confidence
demand for cruises as well as negative impacts to our operating costs and profitability.
•Pandemics have in the past and may in the future have a significant negative impact on our financial condition and operations.
•Incidents such as ship incidents, security incidents,concerning our ships, guests or the spread of contagious diseasescruise industry have in the past and threats thereof, adverse weather conditions or other natural disasters andmay, in the related adverse publicity affecting our reputation andfuture, negatively impact the health, safety, security and satisfaction of our guests and crew and lead to reputational damage.
•Changes in and compliancenon-compliance with laws and regulations under which we operate, such as those relating to health, environment, health, safety and security, data privacy and protection, anti-corruption, economic sanctions, trade protection, labor and employment, and tax have in the past and anti-corruption under which we operate may, in the future, lead to litigations,litigation, enforcement actions, fines, penalties and reputational damage.
•Factors associated with climate change, including evolving and increasing regulations, increasing global concern about climate change and the shift in climate conscious consumerism and stakeholder scrutiny, and increasing frequency and/or penaltiesseverity of adverse weather conditions could adversely affect our business.
Disruptions•Inability to meet or achieve our sustainability related goals, aspirations, initiatives, and our public statements and disclosures regarding them, may expose us to risks that may adversely impact our business.
•Breaches in data security and lapses in data privacy as well as disruptions and other damages to our principal offices, information technology operations and othersystem networks and operations, breaches in data security, lapses in data privacy, 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 reputational damage.
Ability•The loss of key team members, our inability to recruit develop andor retain qualified shoreside and shipboard personnel who liveteam members and increased labor costs could have an adverse effect on ships away from home for extended periodsour business and results of timeoperations.
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•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 supply chain vendors who are integral to the operations of our businesses. These vendors and service providers may be unable to deliver on their commitments, which could negatively impact our business.
•Fluctuations in foreign currency exchange rates may adversely impact our financial results.
•Overcapacity and competition in the cruise ship and land-based vacation industry may negatively impact our cruise sales, pricing and destination options.
Continuing financial viability of our travel agent distribution system, air service providers and other key vendors in our supply chain, as well as reductions in the availability of, and increases in the prices for, the services and products provided by these vendors
•Inability to implement our shipbuilding programs and ship repairs, maintenance and refurbishments on terms that are favorable or consistent with our expectations, as well as increases to our repairs and maintenance expenses and refurbishment costs as our fleet ages
Geographic regions in which we try to expandmay adversely impact our business operations and the satisfaction of our guests.
•Failure to successfully implement our business strategy following our resumption of guest cruise operations would negatively impact the occupancy levels and pricing of our cruises and could have a material adverse effect on our business. 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 slowable to developgenerate cash required to service our debt and ultimately not develop how we expectsustain our operations.


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

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.

New Accounting Pronouncements


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


Critical Accounting Estimates


For a discussion of our critical accounting estimates, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that is included in the Form 10-K.


Seasonality


Our revenues from the sale of passenger ticketsticket revenues are seasonal. Historically, demandDemand for cruises has been greatest during our third quarter, which includes the Northern Hemisphere summer months. This higher demand during the third quarter results in higher ticket prices and occupancy levels and, accordingly, the largest share of our operating income is typically earned during this period. The seasonality of ourOur results are also increases due toimpacted by ships being taken out-of-service for planned maintenance, which we schedule during non-peak demand periods.seasons. In addition, substantially all of Holland America Princess Alaska Tours’ revenue and net income (loss) is generated from May through September in conjunction with the AlaskaAlaska’s cruise season.


Known Trends and Uncertainties

•We believe the cost of fuel and increases in other related costs are reasonably likely to continue to impact our profitability in both the short and long-term.
•We believe inflation and interest rates are reasonably likely to continue to impact our profitability.
•We believe a potential global minimum tax as well as any other changes in domestic and international tax rules and regulations could have a material impact on our effective tax rate.
•We believe the increasing global focus on climate change, including the reduction of carbon emissions and new and evolving regulatory requirements, is reasonably likely to have a material negative impact on our future financial results. The full impact of climate change to our business is not yet known.
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Statistical Information
Three Months Ended
August 31,		Nine Months Ended
August 31,
2023202220232022
Passenger Cruise Days (“PCDs”) (in millions) (a)
25.8 17.7 67.8 36.4 
Available Lower Berth Days (“ALBDs”) (in millions) (b)
23.7 21.0 68.1 51.0 
Occupancy percentage (c)109 %84 %100 %71 %
Passengers carried (in millions)
3.6 2.6 9.3 5.2 
Fuel consumption in metric tons (in millions)
0.7 0.7 2.2 1.9 
Fuel consumption in metric tons per thousand ALBDs31.1 33.4 32.3 37.2 
Fuel cost per metric ton consumed$636 $958 $681 $836 
Currencies (USD to 1)
AUD$0.66 $0.70 $0.67 $0.71 
CAD$0.75 $0.78 $0.74 $0.78 
EUR$1.09 $1.03 $1.08 $1.08 
GBP$1.27 $1.21 $1.24 $1.28 
 Three Months Ended
February 28,
 2018 2017
Available Lower Berth Days ("ALBDs") (in thousands) (a) (b)20,462
 20,024
Occupancy percentage (c)104.7% 104.6%
Passengers carried (in thousands)2,860
 2,769
Fuel consumption in metric tons (in thousands)821
 818
Fuel consumption in metric tons per thousand ALBDs40.1
 40.9
Fuel cost per metric ton consumed$437
 $362
Currencies (USD to 1)   
AUD$0.78
 $0.75
CAD$0.79
 $0.76
EUR$1.21
 $1.06
GBP$1.37
 $1.24
RMB$0.15
 $0.15


(a)ALBD is a standard measure of passenger capacity for the period that we use to approximate rate and capacity variances, based on consistently applied formulas that we use to perform analyses to determine the main non-capacity driven factors that cause our cruise revenues and expenses to vary. 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.

(b)For the three months ended February 28, 2018 compared to the three months ended February 28, 2017, we had a 2.2% capacity increase in ALBDs comprised of a 1.4% capacity increase in our NAA segment and a 3.5% capacity increase in our EA segment.

Notes to Statistical Information
Our NAA capacity increase was caused by:
Full quarter impact from one Princess Cruises 3,560-passenger capacity ship that entered into service in April 2017
Partially offset(a)PCD represents the number of cruise passengers on a voyage multiplied by the number of revenue-producing ship operating days for that voyage.

(b)ALBD is a standard measure of passenger capacity for the period that we use to approximate rate and capacity variances, based on consistently applied formulas that we use to perform analyses to determine the main non-capacity driven factors that cause our cruise revenues and expenses to vary. 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)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.




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Results of Operations
Consolidated
Three Months Ended
August 31,		Nine Months Ended
August 31,
(in millions)20232022Change20232022Change
Revenues
    Passenger ticket$4,546 $2,595 $1,951 $10,557 $4,753 $5,804 
    Onboard and other2,308 1,711 597 5,640 3,577 2,063 
6,854 4,305 2,548 16,197 8,329 7,868 
Operating Costs and Expenses
    Commissions, transportation and other823 565 258 2,097 1,141 956 
    Onboard and other752 537 215 1,785 1,060 725 
    Payroll and related585 563 22 1,768 1,601 167 
    Fuel468 668 (199)1,492 1,577 (86)
    Food364 259 105 1,000 586 414 
    Ship and other impairments— — — — 8 (8)
    Other operating928 787 141 2,546 2,118 428 
    Cruise and tour operating expenses3,921 3,379 542 10,688 8,092 2,596 
    Selling and administrative713 625 89 2,162 1,774 388 
    Depreciation and amortization596 581 15 1,774 1,707 67 
5,230 4,585 645 14,624 11,573 3,052 
Operating Income (Loss)1,624 (279)1,903 1,572 (3,244)4,816 
Nonoperating Income (Expense)
Interest income59 24 35 183 34 150 
Interest expense, net of capitalized interest(518)(422)(96)(1,600)(1,161)(439)
 Debt extinguishment and modification costs(81)— (81)(112)— (112)
Other income (expense), net(19)(81)62 (67)(108)41 
(559)(479)(80)(1,595)(1,235)(360)
Income (Loss) Before Income Taxes$1,065 $(759)$1,823 $(23)$(4,478)$4,456 

NAA
Three Months Ended
August 31,		Nine Months Ended
August 31,
(in millions)20232022Change20232022Change
Revenues
    Passenger ticket$2,963 $1,716 $1,247 $6,896 $3,163 $3,733 
    Onboard and other1,603 1,164 439 4,104 2,509 1,595 
4,566 2,880 1,686 11,000 5,672 5,328 
Operating Costs and Expenses2,661 2,280 381 7,132 5,335 1,797 
Selling and administrative420 368 52 1,295 1,078 217 
Depreciation and amortization377 358 19 1,115 1,046 69 
3,459 3,007 452 9,542 7,460 2,083 
Operating Income (Loss)$1,107 $(126)$1,233 $1,458 $(1,787)$3,245 
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Europe
Three Months Ended
August 31,		Nine Months Ended
August 31,
(in millions)20232022Change20232022Change
Revenues
    Passenger ticket$1,595 $972 $623 $3,699 $1,804 $1,895 
    Onboard and other465 294 171 1,120 585 535 
2,060 1,266 794 4,819 2,389 2,430 
Operating Costs and Expenses1,124 983 141 3,303 2,529 774 
Selling and administrative199 173 26 634 524 110 
Depreciation and amortization168 172 (4)506 531 (25)
1,491 1,328 163 4,443 3,585 859 
Operating Income (Loss)$569 $(62)$631 $376 $(1,196)$1,572 

As a result of the pause in our guest cruise operations, we have a substantial debt balance and require a significant amount of cash to service our debt. Our ability to generate cash will be affected by general macroeconomic, financial, geopolitical, competitive, regulatory and other factors beyond our control. The full quarter impactextent of these impacts is uncertain and may be amplified by one P&O Cruises (Australia) 1,550-passenger capacity ship removed from the service in April 2017our substantial debt balance.

Our EA segment’s capacity increase was caused by:
Full quarter impact from one AIDA Cruises 3,290-passenger capacity ship that entered into service in June 2017


(c)In accordance with cruise industry practice, occupancy is calculated using 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 28, 2018August 31, 2023 (“2018”2023”) Compared to Three Months Ended February 28, 2017August 31, 2022 (“2017”2022”)


Revenues


Consolidated


Cruise passenger ticket revenues made up 74%66% of our 2018 total revenues. Cruise passenger ticket revenues increased by $345 million, or 12%, to $3.1 billion in 2018 from $2.8 billion in 2017.

This increase was driven by:
$149 million - foreign currency translational impact from a weaker U.S. dollar against the functional currencies of our foreign operations (“foreign currency translational impact”)
$76 million - increase in cruise ticket revenues, driven primarily by price improvements in our Caribbean, Australian, European and various other programs including World Cruises
$61 million - 2.2% capacity increase in ALBDs
$36 million - increase in air transportation revenues
$18 million - increase in other passenger revenue

The remaining 26% of 2018 total revenues were substantially all comprised of onboard and other cruise revenues, which increased by $93 million, or 9.5%, to $1.1 billion in 2018 from $1.0 billion in 2017.

This increase was driven by:
•$33 million - foreign currency translational impact
•$31 million - higher onboard spending by our guests
•$21 million - 2.2% capacity increase in ALBDs

Concession revenues, which are included in2023 while onboard and other revenues made up 34%. Revenues in 2023 increased by $21 million, or 9.1%$2.5 billion to $6.9 billion from $4.3 billion in 2022 due to the increase of ships in service and considerably higher occupancy levels in 2023 as compared to 2022. Our full fleet was serving guests as of August 31, 2023, compared to $24793% as of August 31, 2022. ALBDs increased to 23.7 million in 2018 from $2272023 as compared to 21.0 million in 2017.2022. Occupancy for 2023 was 109% compared to 84% in 2022.


NAA Segment


Cruise passenger ticket revenues made up 71%65% of our NAA segment’s 2018 total revenues. Cruise passenger ticket revenues increased by $117 million, or 6.5%, to $1.9 billion in 2018 compared to $1.8 billion in 2017. 

This increase was driven by:
$74 million - increase in cruise ticket revenues, driven primarily by price improvements in the Caribbean and Australian programs
$26 million - 1.4% capacity increase in ALBDs

The remaining 29% of our NAA segment’s 2018 total revenues were comprised ofin 2023 while onboard and other cruise revenues which made up 35%. NAA segment revenues in 2023increased by $50 million, or 6.9%,$1.7 billion to $767$4.6 billion from $2.9 billion in 2022 due to the increase of ships in service and considerably higher occupancy levels in 2023 as compared to 2022. Our NAA segment’s full fleet was serving guests as ofAugust 31, 2023, compared to 95% as of August 31, 2022. ALBDs increased to 14.6 million in 2018 from $7182023 as compared to 12.6 million in 2017.2022. Occupancy for 2023 was 111% compared to 92% in 2022.


This increase was driven by:
$33 million - higher onboard spending by our guests
$10 million - 1.4% capacity increase in ALBDs

Concession revenues, which are included in onboard and other revenues, increased by $10 million, or 6.0%, to $172 million in 2018 from $162 million in 2017.

EAEurope Segment


Cruise passenger ticket revenues made up 82%77% of our EAEurope segment’s 2018 total revenues. Cruise passenger ticket revenues increased by $232 million, or 23%, to $1.2 billion in 2018 compared to $1.0 billion in 2017.


This increase was driven by:
$145 million - foreign currency translational impact
$35 million - 3.5% capacity increase in ALBDs
$25 million - increase in air transportation revenues
$17 million - increase in cruise ticket revenues, driven primarily by price improvements in the European and various other programs including World Cruises

The remaining 18% of our EA segment’s 2018 total revenues were comprised ofin 2023while onboard and other cruise revenues whichmade up 23%. Europe segment revenues in 2023 increased by $45 million, or 21%$0.8 billion to $2.1 billion from $1.3 billion in 2022 due to the increase of ships in service and considerably higher occupancy levels in 2023 as compared to 2022. Our Europe segment’s full fleet was serving guests as of August 31, 2023, and were $265compared to 92% as of August 31, 2022. ALBDs increased to 9.1 million in 2018 and $2202023 as compared to 8.5 million in 2017. This increase2022. Occupancy for 2023 was driven by the foreign currency translational impact, which accounted for $31 million.106% compared to 73% in 2022.


Concession revenues, which are included in onboard and other revenues, increased by $11 million, or 17%, to $76 million in 2018 from $65 million in 2017.

CostsOperating Cost and Expenses


Consolidated


Operating costs and expenses increased by $275 million, or 11%,$0.5 billion to $2.7$3.9 billion in 20182023 from $2.4$3.4 billion in 2017.2022. These increases were driven by our resumption of guest cruise operations, an increase in ships in service and considerably higher occupancy.


This increase
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Fuel costs decreased by $199 million to $468 million in 2023 from $668 million in 2022. $238 million of this decrease was driven by:
$108 million - foreign currency translational impact
$61 million -caused by lower fuel prices and changes in fuel mix of $322 per metric ton consumed in 2023 compared to 2022, partially offset by higher fuel pricesconsumption due to the resumption of guest cruise operations.
$53 million - 2.2% capacity increase in ALBDs
$39 million - higher commissions, transportation and other

Selling and administrative expenses increased by $67$89 million or 12%, to $616$713 million in 20182023 from $549$625 million in 2017.

This2022. The increase was principally driven by:
$25 million - higherby increases in administrative expenses
$22 million - foreign currency translational impact
$12 million - 2.2% capacity incurred as part of our resumption of guest cruise operations, which includes an increase in ALBDsincentive compensation reflecting expected improvements in the company’s current and long-term performance.


DepreciationThe drivers in changes in costs and amortization expenses for our NAA and Europe segments are the same as those described for our consolidated results.

Nonoperating Income (Expense)

Interest expense, net of capitalized interest, increased by $49$96 million or 11%, to $488$518 million in 20182023 from $439$422 million in 2017.

This2022. The increase was caused by:by a higher average interest rate in 2023 compared to 2022.
$21
Debt extinguishment and modification costs were $81 million -in 2023 as a result of debt transactions during the quarter, where there were none in 2022.

Nine Months Ended August 31, 2023 (“2023”) Compared to Nine Months Ended August 31, 2022 (“2022”)

Revenues

Consolidated

Cruise passenger ticket revenues made up 65% of our total revenues in 2023 while onboard and other revenues made up 35%. Revenues in 2023 increased by $7.9 billion to $16.2 billion from $8.3 billion in 2022 due to the significant increase of ships in service and considerably higher occupancy levels in 2023 as compared to 2022. Our full fleet enhancements and investmentswas serving guests as ofAugust 31, 2023, compared to 93% as of August 31, 2022. ALBDs increased to 68.1 million in shoreside assets2023 as compared to 51.0 million in 2022. Occupancy for 2023 was 100% compared to 71% in 2022.
$19 million - foreign currency translational impact
$10 million - 2.2% capacity increase in ALBDs


NAA Segment


Cruise passenger ticket revenues made up 63% of our NAA segment’s total revenues in 2023 while onboard and other cruise revenues made up 37%. NAA segment revenues in 2023increased by $5.3 billion to $11.0 billion from $5.7 billion in 2022 due to the significant increase of ships in service and considerably higher occupancy levels in 2023 as compared to 2022. Our NAA segment’s full fleet was serving guests as ofAugust 31, 2023, compared to 95% as of August 31, 2022. ALBDs increased to 42.2 million in 2023 as compared to 31.4 million in 2022. Occupancy for 2023 was 104% compared to 78% in 2022.

Europe Segment

Cruise passenger ticket revenues made up 77% of our Europe segment’s total revenues in 2023while onboard and other cruise revenues made up 23%. Europe segment revenues in 2023 increased by $2.4 billion to $4.8 billion from $2.4 billion in 2022 due to the significant increase of ships in service and considerably higher occupancy levels in 2023 as compared to 2022. Our Europe segment’s full fleet was serving guests as of August 31, 2023, compared to 92% as of August 31, 2022. ALBDs increased to 25.9 million in 2023 as compared to 19.6 million in 2022. Occupancy for 2023 was 93% compared to 60% in 2022.

Operating Cost and Expenses

Consolidated

Operating costs and expenses increased by $101 million, or 6.5%,$2.6 billion to $1.7$10.7 billion in 20182023 from $1.6$8.1 billion in 2017.

This increase was caused by:
$42 million - higher fuel prices
$22 million - 1.4% capacity2022. These increases were driven by our resumption of guest cruise operations, an increase in ALBDsships in service and considerably higher occupancy.
$15 million - higher commissions, transportation and other
$13 million - higher cruise payroll and related expenses
$12 million - higher port expenses

Selling and administrative expenses increased by $34 million, or 10%,$0.4 billion to $367 million$2.2 billion in 20182023 from $333 million$1.8 billion in 2017.

This2022. The increase was driven by:
$15 million - highercaused by increases in advertising costs and promotion expenses
$14 million - higher administrative expenses incurred as part of our resumption of guest cruise operations, which includes an increase in incentive compensation reflecting expected improvements in the company’s current and long-term performance.


Depreciation and amortization expenses increased by $10 million, or 3.5%, to $299 millionThe drivers in 2018 from $289 millionchanges in 2017.


EA Segment

Operating costs and expenses increased by $146 million, or 17%, to $1.0 billion in 2018 from $0.9 billion in 2017.for our NAA and Europe segments are the same as those described for our

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This increase was caused by:consolidated results.
$104 million - foreign currency translational impact
$30 million - 3.5% capacity increase in ALBDs
$25 million - higher commissions, transportation and other
$20 million - higher fuel prices

These increases were partially offset by:
$12 million - lower dry-dock expenses and repair and maintenance expenses
$10 million - lower cruise payroll and related expenses

Selling and administrative expenses increased by $29 million, or 18%, to $188 million in 2018 from $159 million in 2017. This increase was driven by foreign currency translational impact, which accounted for $22 million.

Depreciation and amortization expenses increased by $27 million, or 20%, to $157 million in 2018 from $130 million in 2017. This increase was driven by foreign currency translational impact, which accounted for $18 million.

Operating Income

Our consolidated operating income increased by $51 million, or 14%, to $419 million in 2018 from $368 million in 2017. Our NAA segment’s operating income increased by $22 million, or 6.4%, to $360 million in 2018 from $338 million in 2017, and our EA segment’s operating income increased by $76 million, or 97%, to $154 million in 2018 from $78 million in 2017. These changes were primarily due to the reasons discussed above.


Nonoperating Income (Expense)

 Three Months Ended February 28,
(in millions)2018 2017
Unrealized gains on fuel derivatives, net$32
 $72
Realized losses on fuel derivatives, net(16) (45)
Gains on fuel derivatives, net$16
 $27

Explanations of Non-GAAP Financial Measures

Non-GAAP Financial Measures

We use net cruise revenues per ALBD (“net revenue yields”), net cruise costs excluding fuel per ALBD, adjusted net income and adjusted earnings per share as non-GAAP financial measures of our cruise segments’ and the company’s financial performance. These non-GAAP financial measures are provided along with U.S. GAAP gross cruise revenues per ALBD (“gross revenue yields”), gross cruise costs per ALBD and U.S. GAAP net income and U.S. GAAP earnings per share. 

Net revenue yields and net cruise costs excluding fuel per ALBD enable us to separate the impact of predictable capacity or ALBD changes from price and other changes that affect our business. We believe these non-GAAP measures provide useful information to investors and expanded insight to measure our revenue and cost performance as a supplement to our U.S. GAAP consolidated financial statements.

Under U.S. GAAP, the realized and unrealized gains and losses on fuel derivatives not qualifying as fuel hedges are recognized currently in earnings. We believe that unrealized gains and losses on fuel derivatives are not an indication of our earnings performance since they relate to future periods and may not ultimately be realized in our future earnings. Therefore, we believe it is more meaningful for the unrealized gains and losses on fuel derivatives to be excluded from our net income and earnings per share and, accordingly, we present adjusted net income and adjusted earnings per share excluding these unrealized gains and losses.


We believe that gains and losses on ship sales, impairment charges, restructuring and other expenses are not part of our core operating business and are not an indication of our future earnings performance. Therefore, we believe it is more meaningful for gains and losses on ship sales, impairment charges, and restructuring and other non-core gains and charges to be excluded from our net income and earnings per share and, accordingly, we present adjusted net income and adjusted earnings per share excluding these items.

The presentation of our non-GAAP financial information is not intended to be considered in isolation from, as substitute for, or superior to the financial information prepared in accordance with U.S. GAAP. It is possible that our non-GAAP financial measures may not be exactly comparable to the like-kind information presented by other companies, which is a potential risk associated with using these measures to compare us to other companies.

Net revenue yields are commonly used in the cruise industry to measure a company’s cruise segment revenue performance and for revenue management purposes. We use “net cruise revenues” rather than “gross cruise revenues” to calculate net revenue yields. We believe that net cruise revenues is a more meaningful measure in determining revenue yield than gross cruise revenues because it reflects the cruise revenues earnedInterest expense, net of our most significant variable costs, which are travel agent commissions, cost of air and other transportation, certain other costs that are directly associated with onboard and other revenues and credit and debit card fees. 

Net passenger ticket revenues reflect gross passenger ticket revenues, net of commissions, transportation and other costs.

Net onboard and other revenues reflect gross onboard and other revenues, net of onboard and other cruise costs.

Net cruise costs excluding fuel per ALBD is the measure we use to monitor our ability to control our cruise segments’ costs rather than gross cruise costs per ALBD. We exclude the same variable costs that are included in the calculation of net cruise revenues as well as fuel expense to calculate net cruise costs without fuel to avoid duplicating these variable costs in our non-GAAP financial measures. Substantially all of our net cruise costs excluding fuel are largely fixed, except for the impact of changing prices, once the number of ALBDs has been determined.

Reconciliation of Forecasted Data

We have not provided a reconciliation of forecasted gross cruise revenues to forecasted net cruise revenues or forecasted gross cruise costs to forecasted net cruise costs without fuel or forecasted U.S. GAAP net income to forecasted adjusted net income or forecasted U.S. GAAP earnings per share to forecasted adjusted earnings per share because preparation of meaningful U.S. GAAP forecasts of gross cruise revenues, gross cruise costs, net income and earnings per share would require unreasonable effort. We are unable to predict, without unreasonable effort, the future movement of foreign exchange rates and fuel prices. While we forecast realized gains and losses on fuel derivatives by applying current Brent prices to the derivatives that settle in the forecast period, we do not forecast the impact of unrealized gains and losses on fuel derivatives because we do not believe they are an indication of our future earnings performance. We are unable to determine the future impact of gains or losses on ships sales, restructuring expenses and other non-core gains and charges.
Constant Dollar and Constant Currency

Our operations primarily utilize the U.S. dollar, Australian dollar, euro and sterling as functional currencies to measure results and financial condition. Functional currencies other than the U.S. dollar subject us to foreign currency translational risk. Our operations also have revenues and expenses that are in currencies other than their functional currency, which subject us to foreign currency transactional risk.

We report net revenue yields, net passenger revenue yields, net onboard and other revenue yields and net cruise costs excluding fuel per ALBD on a “constant dollar” and “constant currency” basis assuming the 2018 periods’ currency exchange rates have remained constant with the 2017 periods’ rates. These metrics facilitate a comparative view for the changes in our business in an environment with fluctuating exchange rates.
Constant dollarreporting removes only the impact of changes in exchange rates on the translation of our operations.
Constant currencyreporting removes the impact of changes in exchange rates on the translation of our operations (as in constant dollar) plus the transactional impact of changes in exchange rates from revenues and expenses that are denominated in a currency other than the functional currency.



Examples:

The translation of our operations with functional currencies other than U.S. dollar to our U.S. dollar reporting currency results in decreases in reported U.S. dollar revenues and expenses if the U.S. dollar strengthens against these foreign currencies and increases in reported U.S. dollar revenues and expenses if the U.S. dollar weakens against these foreign currencies.

Our operations have revenue and expense transactions in currencies other than their functional currency. If their functional currency strengthens against these other currencies, it reduces the functional currency revenues and expenses. If the functional currency weakens against these other currencies, it increases the functional currency revenues and expenses.
Consolidated gross and net revenue yields were computed by dividing the gross and net cruise revenues by ALBDs as follows:
 Three Months Ended February 28,
(dollars in millions, except yields)2018 2018
Constant
Dollar		 2017
Passenger ticket revenues$3,148
 $2,999
 $2,804
Onboard and other revenues1,071
 1,038
 978
Gross cruise revenues4,219
 4,037
 3,782
Less cruise costs     
Commissions, transportation and other(663) (621) (569)
Onboard and other(140) (135) (125)
 (803) (756) (694)
Net passenger ticket revenues2,485
 2,378
 2,235
Net onboard and other revenues931
 903
 853
Net cruise revenues$3,416
 $3,280
 $3,088
ALBDs20,461,582
 20,461,582
 20,024,045
      
Gross revenue yields$206.20
 $197.29
 $188.87
% increase9.2% 4.5% 
 Net revenue yields$166.95
 $160.32
 $154.22
 % increase8.3% 4.0% 
Net passenger ticket revenue yields$121.46
 $116.21
 $111.60
     % increase8.8% 4.1% 
Net onboard and other revenue yields$45.50
 $44.11
 $42.62
     % increase6.8% 3.5% 

 Three Months Ended February 28,
(dollars in millions, except yields)2018 2018
Constant
Currency		 2017
Net passenger ticket revenues$2,485
 $2,374
 $2,235
Net onboard and other revenues931
 906
 853
Net cruise revenues$3,416
 $3,280
 $3,088
ALBDs20,461,582
 20,461,582
 20,024,045
      
 Net revenue yields$166.95
 $160.31
 $154.22
 % increase8.3% 3.9% 
Net passenger ticket revenue yields$121.46
 $116.04
 $111.60
% increase8.8% 4.0% 
Net onboard and other revenue yields$45.50
 $44.27
 $42.62
% increase6.8% 3.9% 


Consolidated gross and net cruise costs and net cruise costs excluding fuel per ALBD were computed by dividing the gross and net cruise costs and net cruise costs excluding fuel by ALBDs as follows:
 Three Months Ended February 28,
(dollars in millions, except costs per ALBD)2018 2018
Constant
Dollar		 2017
Cruise operating expenses$2,695
 $2,587
 $2,422
Cruise selling and administrative expenses610
 587
 546
Gross cruise costs3,305
 3,175
 2,968
Less cruise costs included above     
Commissions, transportation and other(663) (621) (569)
     Onboard and other(140) (135) (125)
     (Losses) gains on ship sales and impairments(16) (16) —
     Restructuring expenses—
 —
 —
     Other—
 —
 1
Net cruise costs2,485
 2,402
 2,275
Less fuel(359) (359) (297)
Net cruise costs excluding fuel$2,127
 $2,044
 $1,978
ALBDs20,461,582
 20,461,582
 20,024,045
      
Gross cruise costs per ALBD$161.51
 $155.16
 $148.24
% increase9.0% 4.7% 
Net cruise costs excluding fuel per ALBD$103.92
 $99.84
 $98.81
% increase5.2% 1.0% 

 Three Months Ended February 28,
(dollars in millions, except costs per ALBD)2018 2018
Constant
Currency		 2017
Net cruise costs excluding fuel$2,127
 $2,042
 $1,978
ALBDs20,461,582
 20,461,582
 20,024,045
      
Net cruise costs excluding fuel per ALBD$103.92
 $99.81
 $98.81
% increase5.2% 1.0% 


Adjusted fully diluted earnings per share was computed as follows:
 Three Months Ended
 February 28,
(in millions, except per share data)2018 2017
Net income   
     U.S. GAAP net income$391
 $352
     Unrealized (gains) losses on fuel derivatives, net(32) (72)
     (Gains) losses on ship sales and impairments16
 —
     Restructuring expenses—
 —
     Other—
 (1)
     Adjusted net income$375
 $279
Weighted-average shares outstanding719
 728
    
Earnings per share   
     U.S. GAAP earnings per share$0.54
 $0.48
     Unrealized (gains) losses on fuel derivatives, net(0.05) (0.10)
     (Gains) losses on ship sales and impairments0.02
 —
     Restructuring expenses—
 —
     Other—
 —
     Adjusted earnings per share$0.52
 $0.38
    

Net cruise revenuescapitalized interest, increased by $328 million, or 11%,$0.4 billion to $3.4$1.6 billion in 20182023 from $3.1$1.2 billion in 2017.
2022. The increase was caused by:by a higher average interest rate in 2023 compared to 2022.
$136 million - foreign currency impacts (including both the foreign currency translational
Debt extinguishment and transactional impacts)
$125 million - 3.9% increase in constant currency net revenue yields
$67 million - 2.2% capacity increase in ALBDs
The 3.9% increase in net revenue yields on a constant currency basis was due to a 4.0% increase in net passenger ticket revenue yields and a 3.9% increase in net onboard and other revenue yields.
The 4.0% increase in net passenger ticket revenue yields was driven primarily by price improvements in our Caribbean, Australian, European and various other programs including World Cruises. This 4.0% increase in net passenger ticket revenue yields was comprised of a 3.9% increase from our NAA segment and a 4.5% increase from our EA segment.
The 3.9% increase in net onboard and other revenue yields was caused by similar increases in our NAA and EA segments.
Gross cruise revenues increased by $437 million, or 12%, to $4.2 billion in 2018 from $3.8 billion in 2017 for largely the same reasons as discussed above.
Net cruisemodification costs excluding fuel increased by $148 million, or 7.5%, to $2.1 billion in 2018 from $2.0 billion in 2017.
The increase was driven by:
$84 million - foreign currency impacts (including both the foreign currency translational and transactional impacts)
$43 million - 2.2% capacity increase in ALBDs
$20 million - 1.0% increase in constant currency net cruise costs excluding fuel
Fuel costs increased by $62 million, or 21%, to $359were $112 million in 2018 from $297 million2023 as a result of debt transactions during the period, where there were none in 2017. This increase was driven by higher fuel prices, which accounted for $61 million.2022.
Gross cruise costs increased by $337 million, or 11%, to $3.3 billion in 2018 from $3.0 billion in 2017 for largely the same reasons as discussed above.

Liquidity, Financial Condition and Capital Resources


Our primary financial goals are to profitably grow our cruise business and increase our return on invested capital (“ROIC”), reaching double-digit returns, while maintaining a strong balance sheet and strong investment grade credit ratings. We define ROIC as the twelve month adjusted earnings before interest divided by the monthly averageAs of debt plus equity minus construction-in-progress. Our ability to generate significant operating cash flow allows us to internally fund our capital investments. We are committed to

returning free cash flow to our shareholders in the form of dividends and/or share repurchases. AsAugust 31, 2023, we continue to profitably grow our cruise business, we plan to increase our debt level in a manner consistent with maintaining our strong credit metrics. This will allow us to return both free cash flow and incremental debt proceeds to our shareholders in the form of dividends and/or share repurchases. Other objectives of our capital structure policy are to maintain a sufficient levelhad $5.7 billion of liquidity with our availableincluding cash and cash equivalents and committed financings for immediateborrowings available under our Revolving Facility. We will continue to pursue various opportunities to refinance future debt maturities to reduce interest expense and/or to extend the maturity dates associated with our existing indebtedness and future liquidity needs, and a reasonable debt maturity profile.obtain relevant financial covenant amendments or waivers, if needed.

Based on our historical results, projections and financial condition, we believe that our future operating cash flows and liquidity will be sufficient to fund all of our expected capital projects including shipbuilding commitments, ship improvements, debt service requirements, working capital needs and other firm commitments over the next several years. We believe that our ability to generate significant operating cash flows and our strong balance sheet, as evidenced by our investment grade credit ratings, provide us with the ability, in most financial credit market environments, to obtain debt financing.


We had a working capital deficit of $7.2$6.3 billion as of February 28, 2018 andAugust 31, 2023 compared to a working capital deficit of $3.1 billion as of November 30, 2017.2022. The increase in working capital deficit was caused by a decrease in cash and cash equivalents and restricted cash and an increase in customer deposits, partially offset by an increase in prepaid expenses and a decrease in short-term borrowings as well as the current portion of long-term debt. 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, invest in long termmake long-term investments or any other use of cash. Included within our working capital deficit are $4.3$6.0 billion and $4.0$4.9 billion of customer deposits as of February 28, 2018August 31, 2023 and November 30, 2017,2022, respectively. We have agreements with a number of credit card processors that transact customer deposits related to our cruise vacations. Certain of these agreements allow the credit card processors to request, under certain circumstances, that we provide a reserve fund in cash. In addition, we have a relatively low-levellow level of accounts receivable and limited investment in inventories. We generate substantial cash flows from operations and

Refer to Note 1 - “General,” of the consolidated financial statements for additional discussion regarding our business model has historically allowed us to maintain this working capital deficit and still meet our operating, investing and financing needs. We expect that we will continue to have working capital deficits in the future.liquidity.


Sources and Uses of Cash

Operating Activities

Our business provided $1.1$3.4 billion of net cash flows from operationsoperating activities during the threenine months ended February 28, 2018,August 31, 2023, an increase of $132 million, or 14%,$4.9 billion, compared to $0.9$1.6 billion used for the same period in 2017.2022. This increase was causeddriven by an increasea decrease in our revenues less expenses settledthe net loss compared to the same period in cash2022 and an increase in customer deposits.other working capital changes.


Investing Activities
During the threenine months ended February 28, 2018,August 31, 2023, net cash used in investing activities was $591 million.$2.3 billion. This was causeddriven by:
•Capital expenditures of $97 million$1.6 billion for our ongoing new shipbuilding program
•Capital expenditures of $477$991 million for ship improvements and replacements, information technology and buildings and improvements
Payments•Proceeds from sales of $21ships of $260 million for fuel derivative settlements


During the threenine months ended February 28, 2017,August 31, 2022, net cash used in investing activities was $474 million.$3.5 billion. This was driven by:
•Capital expenditures of $36 million$3.0 billion for our ongoing new shipbuilding program
•Capital expenditures of $376$776 million for ship improvements and replacements, information technology and buildings and improvements
Payments•Proceeds from sale of $52ships and other of $55 million for fuel derivative settlements
•Purchases of short-term investments of $315 million
•Proceeds from maturity of short-term investments of $515 million

Financing Activities
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Table of Contents

During the threenine months ended February 28, 2018,August 31, 2023, net cash used in financing activities of $428 million$4.2 billion was substantially due to the following:driven by:
Net proceeds of short-term borrowings of $611 million in connection with our availability of, and needs for, cash at various times throughout the period
•Repayments of $963$200 million of short term-borrowings
•Repayments of $6.8 billion of long-term debt
•Debt issuance costs of $116 million
•Debt extinguishment costs of $67 million
•Issuances of $469 million$3.0 billion of long-term debt under a term loan
Payments•Proceeds from issuance of cash dividends of $323 million
Purchases of $218$22 million of Carnival Corporation common stock and purchases of $20 million of Carnival plc ordinary shares in open market transactions under our RepurchaseStock Swap Program



During the threenine months ended February 28, 2017,August 31, 2022, net cash used inprovided by financing activities of $615 million$3.2 billion was substantially due to the following:caused by:
•Net repayments of short-term borrowings of $289$114 million in connection with our availability
•Repayments of $1.1 billion of long-term debt
•Debt issuance costs of $116 million
•Issuances of $3.3 billion of long-term debt
•Net proceeds of $1.2 billion from the public offering of Carnival Corporation common stock
•Proceeds from issuance of $89 million of Carnival Corporation common stock and needs for, cash at various times throughout the period
Paymentspurchases of cash dividends of $254 million
Purchases of $69$82 million of Carnival plc ordinary shares in open market transactions under our RepurchaseStock Swap Program


Future Commitments and Funding Sources
Our total annual capital expenditures consist
As of ships under contract for construction and estimated improvements to existing ships and shoreside assets which are currently expected to be:
(in billions) 2018 2019 2020 2021 2022 2023
Total annual capital expenditures $4.7
 $5.3
 $5.5
 $5.1
 $4.3
 $2.5
The year-over-year percentage increases in our annual capacity are expected to result primarily from contracted new ships entering service and are currently expected to be:
  2018 2019 2020 2021 2022 2023
Annual capacity increase (a) 2.0% 5.5% 7.4% 7.6% 5.3% 3.9%
(a)     These percentage increases include only contracted ship orders and dispositions.

At February 28, 2018,August 31, 2023, we had $5.7 billion of liquidity of $14.4 billion. Our liquidity consisted of $157 millionincluding $2.8 billion of cash and cash equivalents which excludes $296 millionand $2.9 billion of cash used for current operations, $2.1 billionborrowings available for borrowing under our revolvingRevolving Facility, which matures in August 2024. In February 2023, Carnival Holdings II entered into the New Revolving Facility, which may be utilized beginning in August 2024, at which date it will replace our Revolving Facility. Refer to Note 3 - “Debt” of the consolidated financial statements for additional discussion. In addition, we had $3.0 billion of undrawn export credit facilities net ofto fund ship deliveries planned through 2025. We plan to use existing liquidity and future cash flows from operations to fund our outstanding commercial paper borrowings, and $12.1 billion undercash requirements including capital expenditures not funded by our committed future financings, which are comprised of ship export credit facilities. These commitments are from numerous largeWe 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 banksfinancial institutions, and export credit agencies which we believe will honor their contractual agreements with us. and diversifying our counterparties.


(in billions)202320242025
Future export credit facilities at August 31, 2023$— $2.2 $0.7 
(in billions) 2018 2019 2020 2021 2022
Availability of committed future financing at February 28, 2018 $2.2
 $2.8
 $3.1
 $3.1
 $1.0


At February 28, 2018, all of our revolvingOur export credit facilities are scheduled to mature in 2021, except for $300 million that matures in 2020.

Substantially all of our debt agreements contain various financial covenants as described in Note 53 - “Unsecured Debt” in the annual consolidated financial statements, which are included within our Form 10-K.“Debt”. At February 28, 2018,August 31, 2023, we were in compliance with the applicable covenants under our debt covenants. In addition, based on, among other things, our forecasted operating results, financial condition and cash flows, we expect to be in compliance with our debt covenants for the foreseeable future. Generally, if an event of default under any debt agreement occurs, then pursuant to cross default acceleration clauses, substantially all of our outstanding debt and derivative contract payables could become due, and all debt and derivative contracts could be terminated.agreements.


Off-Balance Sheet Arrangements


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.


Item 3. Quantitative and Qualitative Disclosures About Market Risk.


For a discussion of our hedging strategies and market risks, see the discussion below and Note 410 - “Fair Value Measurements, Derivative Instruments and Hedging Activities”Activities and Financial Risks” in our consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations within our Form 10-K. There have been no material changes to our exposure to market risks since the date of our 2022 Form 10-K.



33
Operational Currency Risks

Our operations primarily utilize the U.S. dollar, Australian dollar, euro or sterling as their functional currencies. Our operations also have revenue and expenses denominated in non-functional currencies. Movements in foreign currency exchange rates will affect our financial statements.

Based on a 10% change in all currency exchange rates that were used in our March 22, 2018 guidance, we estimate that our adjusted diluted earnings per share guidance would change by the following:

$0.32 per share for the remaining three quartersTable of 2018Contents
$0.06 per share for the second quarter of 2018

Interest Rate Risks


The composition of our debt, including the effect of foreign currencyinterest rate swaps and interest ratecross currency swaps, was as follows:
February 28, 2018August 31, 2023
Fixed rate2163 %
EUR fixed rate3817 %
Floating rate115 %
EUR floating rate2015 %
GBP floating rate10%

Fuel Price Risks

Based on a 10% change in fuel prices versus the current spot price that was used to calculate fuel expense in our March 22, 2018 guidance, we estimate that our adjusted diluted earnings per share guidance would change by the following:

$0.15 per share for the remaining three quarters of 2018
$0.05 per share for the second quarter of 2018

Based on a 10% change in Brent prices versus the current spot price that was used to calculate realized gains (losses) on fuel derivatives in our March 22, 2018 guidance, we estimate that our adjusted diluted earnings per share guidance would change by the following:

$0.04 per share for the remaining three quarters of 2018
$0.01 per share for the second quarter of 2018

Item 4. Controls and Procedures.Procedures.


A. Evaluation of Disclosure Controls and Procedures


Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported, within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in our reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Our President, Chief Executive Officer and Chief ExecutiveClimate Officer and our Chief Financial Officer and Chief Accounting Officer have evaluated our disclosure controls and procedures and have concluded, as of February 28, 2018,August 31, 2023, that they are effective atto provide a reasonable level of assurance, as described above.



B. Changes in Internal Control over Financial Reporting


There have been no changes in our internal control over financial reporting during the quarter ended February 28, 2018August 31, 2023 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.


34
Table of Contents
PART II - OTHER INFORMATION


Item 1. Legal Proceedings.
As previously disclosed, on May 19, 2017, Holland America Line
The legal proceedings described in Note 4 – “Contingencies and Commitments” of our consolidated financial statements, including those described under “COVID-19 Actions” and “Regulatory or Governmental Inquiries and Investigations,” are incorporated in this “Legal Proceedings” section by reference. Additionally, SEC rules require disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that we believe may exceed $1 million.

On June 20, 2022, Princess Cruises notified the National OceanicAustralian Maritime Safety Authorization (“AMSA”) and Atmospheric Administration (“NOAA”)the flag state, Bermuda, regarding discharges madeapproximately six cubic meters of comminuted food waste (liquid biodigester effluent) inadvertently discharged by certain vessels inCoral Princess inside the recently expanded areaGreat Barrier Reef Marine Park. On June 23, 2022, the UK P&I Club N.V. provided a letter of undertaking for approximately $1.9 million (being the estimated maximum combined penalty). On May 31, 2023, we received a summons from the Australia Federal Prosecution Service indicating that formal charges are being pursued against Princess Cruises and the Captain of the National Marine Sanctuary in the Farallones Islands. NOAA continues to conduct an investigation.vessel. We believe the ultimate outcome will not have a material impact on our consolidated financial statements.


Item 1A. Risk Factors.


The risk factors that affect our business and financial results are discussed in “Item 1A. Risk Factors,” included in thethis Form 10-K, and there has been no material change to these risk factors since the Form 10-K filing. We wish to caution the reader that10-Q should be carefully considered, including the risk factors discussed in “Item 1A. Risk Factors,” included“Risk Factors” and other risks discussed in theour Form 10-K,10-K. These risks could materially and those described elsewhere in this report or other Securitiesadversely affect our results, operations, outlooks, plans, goals, growth, reputation, cash flows, liquidity, and Exchange Commission filings,stock price. Our business also could cause future results to differ materially from those stated in any forward-looking statements. Additionalbe affected by risks and uncertaintiesthat we are not currently known to uspresently aware of or that we currently deemconsider immaterial to be immaterial also may materially adversely affect our business, financial condition or future results.operations.


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.


A.Repurchase Program

Under a share repurchase program effective 2004, we are authorized to repurchase Carnival Corporation common stock and Carnival plc ordinary shares (the “Repurchase Program”). On April 6, 2017, the Boards of Directors approved a modification of the general authorization under the Repurchase Program, which replenished the remaining authorized repurchases at the time of the approval to $1.0 billion. The Repurchase Program does not have an expiration date and may be discontinued by our Boards of Directors at any time.

During the three months ended February 28, 2018, repurchases of Carnival Corporation common stock pursuant to the Repurchase Program were as follows:
Period Total Number of Shares of Carnival Corporation Common Stock Purchased (in millions) Average Price Paid per Share of Carnival Corporation Common Stock Maximum Dollar Value of Shares That May Yet Be Purchased Under the Repurchase Program
(in millions)
December 1, 2017 through December 31, 2017 0.1
 $66.01
 $515
January 1, 2018 through January 31, 2018 0.1
 $69.06
 $440
February 1, 2018 through February 28, 2018 —
 $64.97
 $370
Total 0.2
 $67.53
  

During the three months ended February 28, 2018, repurchases of Carnival plc ordinary shares pursuant to the Repurchase Program were as follows:
Period Total Number of Shares of Carnival plc Purchased (in millions) Average Price Paid per Share of Carnival plc Maximum Dollar Value of Shares That May Yet Be Purchased Under the Repurchase Program
(in millions)
December 1, 2017 through December 31, 2017 1.0
 $65.44
 $515
January 1, 2018 through January 31, 2018 1.0
 $68.23
 $440
February 1, 2018 through February 28, 2018 1.0
 $68.15
 $370
Total 3.0
 $67.25
  

No shares of Carnival Corporation common stock and Carnival plc ordinary shares were purchased outside of publicly announced plans or programs.

B. Stock Swap ProgramsProgram


In addition to the RepurchaseOur Stock Swap Program we have programs that allowallows us to obtain an economicrealize a net cash benefit when either Carnival Corporation common stock is trading at a premium to the price of Carnival plc ordinary shares or Carnival plc ordinary shares are trading at a premium to Carnival Corporation common stock (the “Stockshares. Under the Stock Swap Programs”). For example:

In the event Carnival Corporation common stock trades at a premium to Carnival plc ordinary shares,Program, we may elect to offer and sell shares of Carnival Corporation common stock at prevailing market prices in ordinary brokers’ transactions and repurchase an equivalent number of Carnival plc ordinary shares in the UK market.

In the event Carnival plc ordinary shares trade at a premium to Carnival Corporation common stock, we may elect to sell ordinary shares of Carnival plc, at prevailing market prices in ordinary brokers’ transactions and repurchase an equivalent number of shares of Carnival Corporation common stock in the U.S. market.

Any realized economic benefit under the Stock Swap Programs is used for general corporate purposes, which could include repurchasing additional stock under the Repurchase Program.


Under the Stock Swap ProgramsProgram effective 2008,as of June 2021, the BoardsBoard of Directors have madeauthorized the following authorizations:

In January 2017, to sellsale of up to 22.0$500 million shares of Carnival Corporation common stock in the U.S. market and repurchase up to 22.0 millionthe purchase of Carnival plc ordinary shares on at least an equivalent basis.

We may in the UK market.

In February 2016,future implement a program to sell upallow us to 26.9 million of existingobtain a net cash benefit when Carnival plc ordinary shares inare trading at a premium to the UK market and repurchase up to 26.9 million sharesprice of Carnival Corporation common stock in the U.S. market.stock.


Any sales of Carnival Corporation sharescommon stock and Carnival plc ordinary shares have been or will be registered under the Securities Act of 1933.1933, as amended. During the three months ended February 28, 2018,August 31, 2023, there were no sales or repurchases under the Stock Swap Program. Since the beginning of the Stock Swap Program, first authorized in June 2021,we have sold 17.2 million shares of Carnival Corporation common stock and repurchased the same amount of Carnival plc ordinary shares, resulting in net proceeds of $29 million. No shares of Carnival Corporation common stock or Carnival plc ordinary shares were sold or repurchased underduring the three months ended August 31, 2023 outside of the Stock Swap Programs.Program.


C. Carnival plc Shareholder Approvals

Item 5. Other Information.
Carnival plc ordinary share repurchases under both
C.Trading Plans

During the Repurchase Program and the Stock Swap Programs require annual shareholder approval. The existing shareholder approval is limited to a maximumquarter ended August 31, 2023, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of 21.6 million ordinary shares and is valid until the earlierRegulation S-K).
35
Table of the conclusion of the Carnival plc 2018 annual general meeting or July 4, 2018.Contents

Item 6. Exhibits.Exhibits.
INDEX TO EXHIBITS
Incorporated by ReferenceFiled/
Furnished
Herewith
Exhibit
Number		Exhibit DescriptionFormExhibitFiling
Date
Articles of incorporation and by-laws
3.1   8-K3.14/17/2003
3.2   8-K3.14/20/2009
3.3   8-K3.34/20/2009
Material Contracts
10.1X
10.2X
10.3X
Rule 13a-14(a)/15d-14(a) certifications
31.1X
31.2X
31.3X
31.4X
Section 1350 certifications
32.1*X
36
INDEX TO EXHIBITS        
           
    Incorporated by Reference 
Filed/
Furnished
Herewith
Exhibit
Number 
 Exhibit Description Form Exhibit 
Filing
Date
 
           
Articles of incorporation and by-laws        
           
3.1 
Third Amended and Restated Articles of Incorporation of Carnival Corporation.
    8-K 3.1 4/17/2003  
3.2 
Third Amended and Restated By-Laws of Carnival Corporation.
    8-K 3.1 4/20/2009  
3.3 
Articles of Association of Carnival plc.
    8-K 3.3 4/20/2009  
         
Material contracts        
10.1 
Form of Management Incentive Plan Tied Restricted Stock Unit Agreement for the Carnival Corporation 2011 Stock Plan.
       X
10.2 
Form of Management Incentive Plan Tied Restricted Share Unit Agreement for the Carnival plc 2014 Employee Share Plan.
       X
10.3 
Form of Performance-Based Restricted Stock Unit Agreement for the Carnival Corporation 2011 Stock Plan.
       X
10.4 
Form of Performance-Based Restricted Share Unit Agreement for the Carnival plc 2014 Employee Share Plan.
       X
           
Statement regarding computations of ratios        
           
 12 
Ratio of Earnings to Fixed Charges.
       X
           
Rule 13a-14(a)/15d-14(a) certifications        
           
 31.1 
Certification of President and Chief Executive Officer of Carnival Corporation pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
       X
 31.2 
Certification of Chief Financial Officer and Chief Accounting Officer of Carnival Corporation pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
       X
 31.3 
Certification of President and Chief Executive Officer of Carnival plc pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
       X
 31.4 
Certification of Chief Financial Officer and Chief Accounting Officer of Carnival plc pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
       X
           
Section 1350 certifications        
           
32.1* 
Certification of President and Chief Executive Officer of Carnival Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
       X
32.2* 
Certification of Chief Financial Officer and Chief Accounting Officer of Carnival Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
       X
32.3* 
Certification of President and Chief Executive Officer of Carnival plc pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
       X
32.4* 
Certification of Chief Financial Officer and Chief Accounting Officer of Carnival plc pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
       X
           

Table of Contents
INDEX TO EXHIBITS
Incorporated by Reference
Filed/

Furnished

Herewith
Exhibit

Number
Exhibit DescriptionFormExhibit
Filing

Date
32.2*X
32.3*X
32.4*X
Interactive Data File
101The consolidated financial statements from Carnival Corporation & plc’s joint Quarterly Report on Form 10-Q for the quarter ended February 28, 2018,August 31, 2023, as filed with the Securities and Exchange Commission on March 22, 2018,September 29, 2023, formatted in Inline XBRL, are as follows:
(i) the Consolidated Statements of Income (Loss) for the three and nine months ended February 28, 2018August 31, 2023 and 2017;2022;X
(ii) the Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended February 28, 2018August 31, 2023 and 2017;2022;X
(iii) the Consolidated Balance Sheets at February 28, 2018August 31, 2023 and November 30, 2017;2022;
X
(iv) the Consolidated Statements of Cash Flows for the threenine months ended February 28, 2018August 31, 2023 and 2017 and2022;X
(v) the Consolidated Statements of Shareholders’ Equity for the three and nine months ended August 31, 2023 and 2022;X
(vi) the notes to the consolidated financial statements, tagged in summary and detail.X
104The cover page from Carnival Corporation & plc’s joint Quarterly Report on Form 10-Q for the quarter ended August 31, 2023, as filed with the Securities and Exchange Commission on September 29, 2023, formatted in Inline XBRL (included as Exhibit 101).
*
*These items are furnished and not filed.



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SIGNATURES
Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CARNIVAL CORPORATIONCARNIVAL PLC
By:CARNIVAL CORPORATION/s/ Josh WeinsteinBy:CARNIVAL PLC/s/ Josh Weinstein
Josh WeinsteinJosh Weinstein
By:/s/ Arnold W. DonaldBy:/s/ Arnold W. Donald
Arnold W. DonaldArnold W. Donald
President, and Chief Executive OfficerPresident and Chief Climate OfficerPresident, Chief Executive Officer and Chief Climate Officer
By:/s/ David BernsteinBy:/s/ David Bernstein
David BernsteinDavid Bernstein
Chief Financial Officer and Chief Accounting OfficerChief Financial Officer and Chief Accounting Officer
Date: March 22, 2018September 29, 2023Date: March 22, 2018September 29, 2023





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