CARNIVAL PLC

Previous wording

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, 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,” and similar expressions of future intent or the negative of such terms.

Current wording

Some of the statements, estimates or projections contained in this Quarterly Report on Form 10-Q are “forward-looking statements” that involve risks, uncertainties and assumptions with respect to us, including some statements concerning future results, operations, outlooks, plans, goals, reputation, cash flows, liquidity and other events which have not yet occurred. These statements are intended to qualify for the safe harbors from liability provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. 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,” and similar expressions of future intent or the negative of such terms.

Previous wording

Because forward-looking statements involve risks and uncertainties, there are many factors that could cause our actual results, performance or achievements to differ materially from those expressed or implied by our forward-looking statements. This note contains important cautionary statements of the known factors that we consider could materially affect the accuracy of our forward-looking statements and adversely affect our business, results of operations and financial position. Additionally, many of these risks and uncertainties are currently, and in the future may continue to be, amplified by our substantial debt balance incurred during the pause of our guest cruise operations. There may be additional risks that we consider immaterial or which are unknown. These factors include, but are not limited to, the following:

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Passenger ticket revenues made up 67% of our 2024 total revenues. Passenger ticket revenues increased by $747 million, or 26%, to $3.6 billion in 2024 from $2.9 billion in 2023.

Current wording

Passenger ticket revenues made up 65% of our 2024 total revenues. Passenger ticket revenues increased by $613 million, or 20%, to $3.8 billion in 2024 from $3.1 billion in 2023.

Previous wording

The remaining 33% of 2024 total revenues was comprised of onboard and other revenues, which increased by $227 million, or 15%, to $1.8 billion in 2024 from $1.6 billion in 2023.

Current wording

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

Previous wording

•$47 million - higher commissions, transportation costs, and other expenses driven by higher commission on increased ticket pricing and an increase in the number of guests

Current wording

•$47 million - higher onboard spending by our guests

Previous wording

The remaining 37% of our NAA segment’s 2024 total revenues were comprised of onboard and other revenues, which increased by $120 million, or 10%, to $1.3 billion in 2024 compared to $1.2 billion in 2023.

Current wording

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

Previous wording

Passenger ticket revenues made up 77% of our Europe segment’s 2024 total revenues. Passenger ticket revenues increased by $373 million, or 38%, to $1.4 billion in 2024 compared to $1.0 billion in 2023.

Current wording

Passenger ticket revenues made up 77% of our Europe segment’s 2024 total revenues. Passenger ticket revenues increased by $190 million, or 17%, to $1.3 billion in 2024 compared to $1.1 billion in 2023.

Previous wording

These increases were partially offset by:

Current wording

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

Previous wording

Our consolidated operating income (loss) increased by $447 million to $276 million in 2024 from $(172) million in 2023. Our NAA segment’s operating income (loss) increased by $187 million to $272 million in 2024 from $86 million in 2023, and our Europe segment’s operating income (loss) increased by $286 million to $119 million in 2024 from $(166) million in 2023. These changes were primarily due to the reasons discussed above.

Current wording

Our consolidated operating income (loss) increased by $440 million to $560 million in 2024 from $120 million in 2023. Our NAA segment’s operating income (loss) increased by $260 million to $525 million in 2024 from $265 million in 2023, and our Europe segment’s operating income (loss) increased by $195 million to $168 million in 2024 from $(27) million in 2023. These changes were primarily due to the reasons discussed above.

Previous wording

Interest expense, net of capitalized interest, decreased by $68 million, or 13%, to $471 million in 2024 from $539 million in 2023. The decrease was caused by a decrease in total debt.

Current wording

Interest expense, net of capitalized interest, decreased by $93 million, or 17%, to $450 million in 2024 from $542 million in 2023. The decrease was substantially all due to a decrease in total debt and lower interest rates.

Previous wording

•$32 million - net favorable foreign currency translational impact

Current wording

•$35 million - net favorable foreign currency translational impact

Previous wording

Passenger ticket revenues made up 63% of our NAA segment’s 2024 total revenues. Passenger ticket revenues increased by $376 million, or 20%, to $2.3 billion in 2024 from $1.9 billion in 2023.

Current wording

Passenger ticket revenues made up 63% of our NAA segment’s 2024 total revenues. Passenger ticket revenues increased by $804 million, or 20%, to $4.7 billion in 2024 from $3.9 billion in 2023.

Previous wording

•$34 million - net favorable foreign currency translational impact

Current wording

•$39 million - net favorable foreign currency translational impact

Previous wording

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

Current wording

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

Previous wording

•$17 million - higher onboard and other cost of sales driven by higher onboard revenues

Current wording

•$17 million - higher onboard spending by our guests

Previous wording

•$25 million - net unfavorable foreign currency translational impact

Current wording

•$29 million - net unfavorable foreign currency translational impact

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Operating costs and expenses increased by $213 million, or 9.7%, to $2.4 billion in 2024 from $2.2 billion in 2023.

Current wording

Operating costs and expenses increased by $207 million, or 10%, to $2.4 billion in 2024 from $2.2 billion in 2023.

Previous wording

•$79 million - higher commissions, transportation costs, and other expenses driven by an increase in the number of guests

Current wording

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

Previous wording

•$27 million - net unfavorable foreign currency translational impact

Current wording

•$33 million - net unfavorable foreign currency translational impact

Previous wording

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

Current wording

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

Previous wording

As of February 29, 2024, we had $5.2 billion of liquidity including $2.2 billion of cash and cash equivalents and $3.0 billion of borrowings available under our Revolving Facility, which matures in August 2024, at which point it will be replaced by the $2.5 billion New Revolving Facility available through August 2027. We will continue to pursue various opportunities to repay portions of our existing indebtedness and refinance future debt maturities to extend maturity dates and reduce interest expense. Refer to Note 3 - “Debt” of the consolidated financial statements and Funding Sources below for additional details.

Current wording

As of May 31, 2024, we had $4.6 billion of liquidity including $1.6 billion of cash and cash equivalents and $3.0 billion of borrowings available under our Revolving Facility, which matures in August 2024, at which point it will be replaced by the $2.5 billion New Revolving Facility available through August 2027. We will continue to pursue various opportunities to repay portions of our existing indebtedness and refinance future debt maturities to extend maturity dates and reduce interest expense. Refer to Note 3 - “Debt” of the consolidated financial statements and Funding Sources below for additional details.

Previous wording

We had a working capital deficit of $7.9 billion as of February 29, 2024 compared to a working capital deficit of $6.2 billion as of November 30, 2023. The increase in working capital deficit was primarily due to an increase in customer deposits and the current portion of long-term debt as well as a decrease in prepaid expenses and other. We operate with a substantial working capital deficit. This deficit is mainly attributable to the fact that, under our business model, substantially all of our passenger ticket receipts are collected in advance of the applicable sailing date. These advance passenger receipts generally remain a current liability on our balance sheet until the sailing date. The cash generated from these advance receipts is used interchangeably with cash on hand from other sources, such as our borrowings and other cash from operations. The cash received as advanced receipts can be used to fund operating expenses, pay down our debt, make long-term investments or any other use of cash. Included within our working capital are $6.6 billion and $6.1 billion of customer deposits as of February 29, 2024 and November 30, 2023, respectively. We have agreements with a number of credit card processors that transact customer deposits related to our cruise vacations. Certain of these agreements allow the credit card processors to request, under certain circumstances, that we provide a capped reserve fund in cash. In addition, we have a relatively low level of accounts receivable and limited investment in inventories.

Current wording

We had a working capital deficit of $9.6 billion as of May 31, 2024 compared to a working capital deficit of $6.2 billion as of November 30, 2023. The increase in working capital deficit was substantially all due to an increase in customer deposits, a decrease in cash and cash equivalents and a decrease in prepaid expenses and other. We operate with a substantial working capital deficit. This deficit is mainly attributable to the fact that, under our business model, substantially all of our passenger ticket receipts are collected in advance of the applicable sailing date. These advance passenger receipts generally remain a current liability on our balance sheet until the sailing date. The cash generated from these advance receipts is used interchangeably with cash on hand from other sources, such as our borrowings and other cash from operations. The cash received as advanced receipts can be used to fund operating expenses, pay down our debt, make long-term investments or any other use of cash. Included within our working capital are $7.9 billion and $6.1 billion of customer deposits as of May 31, 2024 and November 30, 2023, respectively. We have agreements with a number of credit card processors that transact customer deposits related to our cruise vacations. Certain of these agreements allow the credit card processors to request, under certain circumstances, that we provide a capped reserve fund in cash. In addition, we have a relatively low level of accounts receivable and limited investment in inventories.

Previous wording

Our business provided $1.8 billion of net cash flows from operating activities during the three months ended February 29, 2024, an increase of $1.4 billion, compared to $0.4 billion provided for the same period in 2023. This was driven by an increase in net cash provided by operating activities and an increase in cash provided by the release of substantially all credit card reserves (included in the change in prepaid expenses and other assets).

Current wording

Our business provided $3.8 billion of net cash flows from operating activities during the six months ended May 31, 2024, an increase of $2.3 billion, compared to $1.5 billion provided for the same period in 2023. This was caused by an increase in cash provided by the release of substantially all credit card reserves (included in the change in prepaid expenses and other assets), a decrease in the net loss compared to the same period in 2023 and other working capital changes.

Previous wording

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

Current wording

During the six months ended May 31, 2024, net cash used in investing activities was $3.4 billion. This was caused by capital expenditures of $3.5 billion primarily attributable to the delivery of a 5,360 and a 4,310-passenger capacity NAA segment ships and one 2,960-passenger capacity Europe segment ship.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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