Washington, D.C. 20549
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 ☐
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. ☐
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
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.”
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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
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| | | | | | | | | | | |
| 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”) |
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| | | | | | | | | | | |
| 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 Location | | August 31, 2023 | | November 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 other | | 1 | | | — | |
| | | | | |
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 liabilities | | 16 | | | — | |
Total derivative liabilities | | | $ | 26 | | | $ | — | |
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| | | | | | | | | |
(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. |
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(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. |
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(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. |
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(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 |
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| | | | | | | | | | |
| | 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) | 2023 | | 2022 | | 2023 | | 2022 |
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 | |
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| | | | | | | |
| 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.
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| | | | | | | |
| 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:
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| | | | | | | | | | | | |
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 |
| | | | |
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(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
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.
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| | | | | | | | | | | |
| Entered Into | | Matures in | | Weighted-Average Floor Rate | | Weighted- Average Ceiling Rate |
Carnival Horizon | 2016 | | March 2018 | | $ | 1.02 |
| | $ | 1.25 |
|
Seabourn Ovation | 2016 | | April 2018 | | $ | 1.02 |
| | $ | 1.25 |
|
Nieuw Statendam | 2016 | | 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
and Other segment represents the hotel and transportation operations of Holland America Princess Alaska Tours and other operations.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended August 31, |
(in millions) | Revenues | | Operating costs and expenses | | Selling 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 Support | 56 | | | 30 | | | 87 | | | 47 | | | (109) | |
Tour and Other | 172 | | | 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 Support | 41 | | | 21 | | | 78 | | | 36 | | | (94) | |
Tour and Other | 118 | | | 94 | | | 6 | | | 15 | | | 3 | |
| $ | 4,305 | | | $ | 3,379 | | | $ | 625 | | | $ | 581 | | | $ | (279) | |
| | | | | | | | | |
| Nine Months Ended August 31, |
(in millions) | Revenues | | Operating 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 Support | 162 | | | 85 | | | 211 | | | 137 | | | (271) | |
Tour and Other | 216 | | | 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 Support | 114 | | | 76 | | | 154 | | | 104 | | | (220) | |
Tour and Other | 154 | | | 151 | | | 17 | | | 26 | | | (40) | |
| $ | 8,329 | | | $ | 8,092 | | | $ | 1,774 | | | $ | 1,707 | | | $ | (3,244) | |
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| | | | | | | | | | | | | | | | | | | |
| 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 |
|
EA | 1,503 |
| | 1,005 |
| | 188 |
| | 157 |
| | 154 |
|
Cruise Support | 32 |
| | 33 |
| | 55 |
| | 23 |
| | (78 | ) |
Tour and Other | 13 |
| | 14 |
| | 6 |
| | 10 |
| | (17 | ) |
Intersegment elimination | — |
| | — |
| | — |
| | — |
| | — |
|
| $ | 4,232 |
| | $ | 2,709 |
| | $ | 616 |
| | $ | 488 |
| | $ | 419 |
|
2017 | | | | | | | | | |
NAA | $ | 2,517 |
| | $ | 1,557 |
| | $ | 333 |
| | $ | 289 |
| | $ | 338 |
|
EA | 1,226 |
| | 859 |
| | 159 |
| | 130 |
| | 78 |
|
Cruise Support | 39 |
| | 6 |
| | 55 |
| | 11 |
| | (33 | ) |
Tour and Other | 9 |
| | 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) | 2023 | | 2022 | | 2023 | | 2022 |
North America | $ | 4,253 | | | $ | 2,753 | | | $ | 9,937 | | | $ | 5,491 | |
Europe | 2,165 | | | 1,456 | | | 4,798 | | | 2,676 | |
Australia | 238 | | | 56 | | | 883 | | | 60 | |
Other | 198 | | | 40 | | | 578 | | | 101 | |
| $ | 6,854 | | | $ | 4,305 | | | $ | 16,197 | | | $ | 8,329 | |
NOTE 67 – Earnings Per Share
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended August 31, | | Nine Months Ended August 31, |
(in millions, except per share data) | 2023 | | 2022 | | 2023 | | 2022 |
Net income (loss) | $ | 1,074 | | | $ | (770) | | | $ | (26) | | | $ | (4,495) | |
Interest expense on dilutive convertible notes | 24 | | | — | | | — | | | — | |
Net income (loss) for diluted earnings per share | $ | 1,098 | | | $ | (770) | | | $ | (26) | | | $ | (4,495) | |
| | | | | | | |
Weighted-average shares outstanding | 1,263 | | | 1,185 | | | 1,262 | | | 1,154 | |
Dilutive effect of equity awards | 6 | | | — | | | — | | | — | |
Dilutive effect of convertible notes | 127 | | | — | | | — | | | — | |
Diluted weighted-average shares outstanding | 1,396 | | | 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 outstanding | 717 |
| | 725 |
|
Dilutive effect of equity plans | 2 |
| | 3 |
|
Diluted weighted-average shares outstanding | 719 |
| | 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) | 2023 | | 2022 | | 2023 | | 2022 |
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, 2023 | | November 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).
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.
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.
•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.
Statistical Information
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended August 31, | | Nine Months Ended August 31, |
| 2023 | | 2022 | | 2023 | | 2022 |
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 ALBDs | 31.1 | | | 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 ALBDs | 40.1 |
| | 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.
Results of Operations
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consolidated | | | | | | | | | | | | | | | |
| Three Months Ended August 31, | | | | | | Nine Months Ended August 31, | | | | |
(in millions) | 2023 | | 2022 | | Change | | | 2023 | | 2022 | | Change | |
Revenues | | | | | | | | | | | | | | | |
Passenger ticket | $ | 4,546 | | | $ | 2,595 | | | $ | 1,951 | | | | | $ | 10,557 | | | $ | 4,753 | | | $ | 5,804 | | | |
Onboard and other | 2,308 | | | 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 other | 823 | | | 565 | | | 258 | | | | | 2,097 | | | 1,141 | | | 956 | | | |
Onboard and other | 752 | | | 537 | | | 215 | | | | | 1,785 | | | 1,060 | | | 725 | | | |
Payroll and related | 585 | | | 563 | | | 22 | | | | | 1,768 | | | 1,601 | | | 167 | | | |
Fuel | 468 | | | 668 | | | (199) | | | | | 1,492 | | | 1,577 | | | (86) | | | |
Food | 364 | | | 259 | | | 105 | | | | | 1,000 | | | 586 | | | 414 | | | |
Ship and other impairments | — | | | — | | | — | | | | | — | | | 8 | | | (8) | | | |
Other operating | 928 | | | 787 | | | 141 | | | | | 2,546 | | | 2,118 | | | 428 | | | |
Cruise and tour operating expenses | 3,921 | | | 3,379 | | | 542 | | | | | 10,688 | | | 8,092 | | | 2,596 | | | |
| | | | | | | | | | | | | | | |
Selling and administrative | 713 | | | 625 | | | 89 | | | | | 2,162 | | | 1,774 | | | 388 | | | |
Depreciation and amortization | 596 | | | 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 income | 59 | | | 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) | 2023 | | 2022 | | Change | | | 2023 | | 2022 | | Change | |
Revenues | | | | | | | | | | | | | | | |
Passenger ticket | $ | 2,963 | | | $ | 1,716 | | | $ | 1,247 | | | | | $ | 6,896 | | | $ | 3,163 | | | $ | 3,733 | | | |
Onboard and other | 1,603 | | | 1,164 | | | 439 | | | | | 4,104 | | | 2,509 | | | 1,595 | | | |
| 4,566 | | | 2,880 | | | 1,686 | | | | | 11,000 | | | 5,672 | | | 5,328 | | | |
| | | | | | | | | | | | | | | |
Operating Costs and Expenses | 2,661 | | | 2,280 | | | 381 | | | | | 7,132 | | | 5,335 | | | 1,797 | | | |
Selling and administrative | 420 | | | 368 | | | 52 | | | | | 1,295 | | | 1,078 | | | 217 | | | |
Depreciation and amortization | 377 | | | 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 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Europe | | | | | | | | | | | | | | | |
| Three Months Ended August 31, | | | | | | Nine Months Ended August 31, | | | | |
(in millions) | 2023 | | 2022 | | Change | | | 2023 | | 2022 | | Change | |
Revenues | | | | | | | | | | | | | | | |
Passenger ticket | $ | 1,595 | | | $ | 972 | | | $ | 623 | | | | | $ | 3,699 | | | $ | 1,804 | | | $ | 1,895 | | | |
Onboard and other | 465 | | | 294 | | | 171 | | | | | 1,120 | | | 585 | | | 535 | | | |
| 2,060 | | | 1,266 | | | 794 | | | | | 4,819 | | | 2,389 | | | 2,430 | | | |
| | | | | | | | | | | | | | | |
Operating Costs and Expenses | 1,124 | | | 983 | | | 141 | | | | | 3,303 | | | 2,529 | | | 774 | | | |
Selling and administrative | 199 | | | 173 | | | 26 | | | | | 634 | | | 524 | | | 110 | | | |
Depreciation and amortization | 168 | | | 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
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(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.
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
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 revenues | 1,071 |
| | 1,038 |
| | 978 |
|
Gross cruise revenues | 4,219 |
| | 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 revenues | 2,485 |
| | 2,378 |
| | 2,235 |
|
Net onboard and other revenues | 931 |
| | 903 |
| | 853 |
|
Net cruise revenues | $ | 3,416 |
| | $ | 3,280 |
| | $ | 3,088 |
|
ALBDs | 20,461,582 |
| | 20,461,582 |
| | 20,024,045 |
|
| | | | | |
Gross revenue yields | $ | 206.20 |
| | $ | 197.29 |
| | $ | 188.87 |
|
% increase | 9.2 | % | | 4.5 | % | |
|
Net revenue yields | $ | 166.95 |
| | $ | 160.32 |
| | $ | 154.22 |
|
% increase | 8.3 | % | | 4.0 | % | |
|
Net passenger ticket revenue yields | $ | 121.46 |
| | $ | 116.21 |
| | $ | 111.60 |
|
% increase | 8.8 | % | | 4.1 | % | |
|
Net onboard and other revenue yields | $ | 45.50 |
| | $ | 44.11 |
| | $ | 42.62 |
|
% increase | 6.8 | % | | 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 revenues | 931 |
| | 906 |
| | 853 |
|
Net cruise revenues | $ | 3,416 |
| | $ | 3,280 |
| | $ | 3,088 |
|
ALBDs | 20,461,582 |
| | 20,461,582 |
| | 20,024,045 |
|
| | | | | |
Net revenue yields | $ | 166.95 |
| | $ | 160.31 |
| | $ | 154.22 |
|
% increase | 8.3 | % | | 3.9 | % | |
|
Net passenger ticket revenue yields | $ | 121.46 |
| | $ | 116.04 |
| | $ | 111.60 |
|
% increase | 8.8 | % | | 4.0 | % | |
|
Net onboard and other revenue yields | $ | 45.50 |
| | $ | 44.27 |
| | $ | 42.62 |
|
% increase | 6.8 | % | | 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 expenses | 610 |
| | 587 |
| | 546 |
|
Gross cruise costs | 3,305 |
| | 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 costs | 2,485 |
| | 2,402 |
| | 2,275 |
|
Less fuel | (359 | ) | | (359 | ) | | (297 | ) |
Net cruise costs excluding fuel | $ | 2,127 |
| | $ | 2,044 |
| | $ | 1,978 |
|
ALBDs | 20,461,582 |
| | 20,461,582 |
| | 20,024,045 |
|
| | | | | |
Gross cruise costs per ALBD | $ | 161.51 |
| | $ | 155.16 |
| | $ | 148.24 |
|
% increase | 9.0 | % | | 4.7 | % | |
|
Net cruise costs excluding fuel per ALBD | $ | 103.92 |
| | $ | 99.84 |
| | $ | 98.81 |
|
% increase | 5.2 | % | | 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 |
|
ALBDs | 20,461,582 |
| | 20,461,582 |
| | 20,024,045 |
|
| | | | | |
Net cruise costs excluding fuel per ALBD | $ | 103.92 |
| | $ | 99.81 |
| | $ | 98.81 |
|
% increase | 5.2 | % | | 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 impairments | 16 |
| | — |
|
Restructuring expenses | — |
| | — |
|
Other | — |
| | (1 | ) |
Adjusted net income | $ | 375 |
| | $ | 279 |
|
Weighted-average shares outstanding | 719 |
| | 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 impairments | 0.02 |
| | — |
|
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
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) | | 2023 | | 2024 | | 2025 |
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.
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:
$0.06 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 rate | 2163 | % |
EUR fixed rate | 3817 | % |
Floating rate | 115 | % |
EUR floating rate | 2015 | % |
GBP floating rate | 10 | % |
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.
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:
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| | | | | | | | | | | |
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:
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| | | | | | | | | | | |
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).
Item 6. Exhibits.Exhibits. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
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 | | | | 8-K | | 3.1 | | 4/17/2003 | | |
3.2 | | | | 8-K | | 3.1 | | 4/20/2009 | | |
3.3 | | | | 8-K | | 3.3 | | 4/20/2009 | | |
| | | | | | | | | | |
Material Contracts | | | | | | | | |
10.1 | | Amendment No. 5, dated as of June 16, 2023, by and among Carnival Corporation and Carnival Finance, LLC, as borrowers, and JPMorgan Chase Bank, N.A., as administrative agent, to Term Loan Agreement, dated as of June 30, 2020. | | | | | | | | X |
| | | | | | | | | | |
10.2 | | Term Loan Agreement, dated as of August 8, 2023, among Carnival Finance, LLC and Carnival Corporation, as borrowers, Carnival plc, the other guarantors party thereto, the various financial institutions as are or shall become parties thereto, JPMorgan Chase Bank, N.A., as administrative agent for the lenders, and U.S. Bank Trust Company, National Association, as security agent. | | | | | | | | X |
| | | | | | | | | | |
10.3 | | Indenture, dated as of August 8, 2023, among Carnival Corporation, as issuer, Carnival plc, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee, principal paying agent, transfer agent, registrar and security agent, relating to the 7.000% First-Priority Senior Secured Notes due 2029. | | | | | | | | X |
| | | | | | | | | | |
Rule 13a-14(a)/15d-14(a) certifications | | | | | | | | |
31.1 | | | | | | | | | | X |
31.2 | | | | | | | | | | X |
31.3 | | | | | | | | | | X |
31.4 | | | | | | | | | | X |
| | | | | | | | | | |
Section 1350 certifications | | | | | | | | |
| | | | | | | | | | |
32.1* | | | | | | | | | | X |
|
| | | | | | | | | | |
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 | | | | 8-K | | 3.1 | | 4/17/2003 | | |
3.2 | | | | 8-K | | 3.1 | | 4/20/2009 | | |
3.3 | | | | 8-K | | 3.3 | | 4/20/2009 | | |
| | | | | | | | |
Material contracts | | | | | | | | |
10.1 | | | | | | | | | | X |
10.2 | | | | | | | | | | X |
10.3 | | | | | | | | | | X |
10.4 | | | | | | | | | | X |
| | | | | | | | | | |
Statement regarding computations of ratios | | | | | | | | |
| | | | | | | | | | |
12 | | | | | | | | | | X |
| | | | | | | | | | |
Rule 13a-14(a)/15d-14(a) certifications | | | | | | | | |
| | | | | | | | | | |
31.1 | | | | | | | | | | X |
31.2 | | | | | | | | | | X |
31.3 | | | | | | | | | | X |
31.4 | | | | | | | | | | X |
| | | | | | | | | | |
Section 1350 certifications | | | | | | | | |
| | | | | | | | | | |
32.1* | | | | | | | | | | X |
32.2* | | | | | | | | | | X |
32.3* | | | | | | | | | | X |
32.4* | | | | | | | | | | X |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
INDEX TO EXHIBITS |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | Incorporated by Reference | | Filed/ Furnished
Herewith
|
Exhibit Number
| | Exhibit Description | | Form | | Exhibit | | Filing Date
| |
32.2* | | | | | | | | | | X |
32.3* | | | | | | | | | | X |
32.4* | | | | | | | | | | X |
| | | | | | | | | | |
Interactive Data File | | | | | | | | |
| | | | | | | | | | |
101 | | The 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 |
| | | | | | | | | | |
104 | | The 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. |
SIGNATURES
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 CORPORATION | | | CARNIVAL PLC |
| | | | |
By: | CARNIVAL CORPORATION/s/ Josh Weinstein | | By: | CARNIVAL PLC/s/ Josh Weinstein |
| Josh Weinstein | | | Josh Weinstein |
By: | /s/ Arnold W. Donald | | By: | /s/ Arnold W. Donald |
| Arnold W. Donald | | | Arnold W. Donald |
| President, and Chief Executive Officer | | | President and Chief Climate Officer | | | President, Chief Executive Officer and Chief Climate Officer |
| | | | |
By: | /s/ David Bernstein | | By: | /s/ David Bernstein |
| David Bernstein | | | David Bernstein |
| Chief Financial Officer and Chief Accounting Officer | | | Chief Financial Officer and Chief Accounting Officer |
| | | | |
| Date: March 22, 2018September 29, 2023 | | | Date: March 22, 2018September 29, 2023 |
| | | | |