Carnival Corp Ltd.

Previous 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.

Current 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.

Previous wording

•Events and conditions around the world, including geopolitical uncertainty, war and other military actions, inflation, higher fuel prices, higher interest rates and other general concerns impacting the ability or desire of people to travel have led, and may in the future lead, to a decline in demand for cruises as well as negative impacts to our operating costs and profitability.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

•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 severity of adverse weather conditions could adversely affect our business.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

•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.

Current wording

•We rely on suppliers who are integral to the operations of our businesses. These suppliers and service providers may be unable to deliver on their commitments, which could negatively impact our business.

Previous wording

•We believe the volatility in the price of fuel and foreign currency exchange rates are reasonably likely to impact our profitability.

Current wording

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

Previous wording

•We believe the increasing global focus on climate change, including the reduction of greenhouse gas emissions and new and evolving regulatory requirements, is reasonably likely to have a material negative impact on our future financial results. We became subject to the EU ETS on January 1, 2024, which includes a three-year phase-in period. The impact in 2024 will be approximately $50 million.

Current wording

•We believe the increasing focus on the reduction of greenhouse gas emissions and new and evolving related regulatory requirements, is reasonably likely to have a material negative impact on our future financial results. We became subject to the EU Emissions Trading System (“ETS”) on January 1, 2024, which includes a three-year phase-in period. The impact of this regulation in 2024 was $46 million, which represented costs associated with 40% of emissions under the ETS operational scope. In 2025, 70% of emissions under the ETS scope will be impacted, and in 2026, all in scope emissions will be impacted.

Previous wording

(c)For the three months ended August 31, 2024 compared to the three months ended August 31, 2023, we had a 6.2% capacity increase in ALBDs comprised of a 10% capacity increase in our NAA segment and a 0.7% capacity decrease in our Europe segment.

Current wording

(c)For the three months ended February 28, 2025 compared to the three months ended February 29, 2024, we had a 2.5% capacity increase in ALBDs comprised of a 5.7% capacity increase in our North America segment and a 2.9% capacity decrease in our Europe segment.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

•Seabourn 460-passenger capacity ship that was removed from service in September 2024

Previous wording

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

Current wording

•P&O Cruises (Australia) 2,000-passenger capacity that was removed from service in February 2025

Previous wording

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

Current wording

Our Europe segment’s capacity decrease was caused by a Costa Cruises 4,240-passenger capacity ship that transferred to Carnival Cruise Line in April 2024.

Previous wording

Passenger ticket revenues made up 66% of our 2024 total revenues. Passenger ticket revenues increased by $693 million, or 15%, to $5.2 billion in 2024 from $4.5 billion in 2023.

Current wording

Passenger ticket revenues made up 66% of our 2025 total revenues. Passenger ticket revenues increased by $216 million, or 6.0%, to $3.8 billion in 2025 from $3.6 billion in 2024.

Previous wording

The remaining 34% of 2024 total revenues was comprised of onboard and other revenues, which increased by $349 million, or 15%, to $2.7 billion in 2024 from $2.3 billion in 2023.

Current wording

The remaining 34% of 2025 total revenues was comprised of onboard and other revenues, which increased by $189 million, or 11%, to $2.0 billion in 2025 from $1.8 billion in 2024.

Previous wording

•$126 million - higher onboard and other cost of sales driven by higher onboard revenues

Current wording

•$126 million - higher onboard spending by our guests

Previous wording

Passenger ticket revenues made up 77% of our Europe segment’s 2024 total revenues. Passenger ticket revenues increased by $784 million, or 21%, to $4.5 billion in 2024 from $3.7 billion in 2023.

Current wording

Passenger ticket revenues made up 77% of our Europe segment’s 2025 total revenues. Passenger ticket revenues increased by $52 million, or 3.8%, and were $1.4 billion in 2025 and 2024.

Previous wording

•$29 million - net unfavorable foreign currency translational impact

Current wording

•$46 million - net unfavorable foreign currency translation

Previous wording

•$33 million - higher port expenses

Current wording

•$33 million - higher onboard and other cost of sales driven by higher onboard revenues

Previous wording

•$40 million - net favorable foreign currency translational impact

Current wording

•$40 million - net favorable foreign currency translation

Previous wording

•$23 million - lower repair and maintenance expenses (including dry-dock expenses)

Current wording

•$24 million - lower repair and maintenance expenses (including dry-dock expenses)

Previous wording

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

Current wording

•$44 million - lower repair and maintenance expenses (including dry-dock expenses)

Previous wording

Depreciation and amortization expenses decreased by $5 million, or 1.1%, to $501 million in 2024 from $506 million in 2023.

Current wording

Depreciation and amortization expenses increased by $5 million, or 3.0%, to $169 million in 2025 from $164 million in 2024.

Previous wording

Our consolidated operating income increased by $554 million to $2.2 billion in 2024 from $1.6 billion in 2023. Our NAA segment’s operating income increased by $335 million to $1.4 billion in 2024 from $1.1 billion in 2023, and our Europe segment’s operating income increased by $201 million to $770 million in 2024 from $569 million in 2023. These changes were primarily due to the reasons discussed above.

Current wording

Our consolidated operating income increased by $267 million to $543 million in 2025 from $276 million in 2024. Our North America segment’s operating income increased by $244 million to $516 million in 2025 from $272 million in 2024, and our Europe segment’s operating income increased by $21 million to $140 million in 2025 from $119 million in 2024. These changes were primarily due to the reasons discussed above.

Previous wording

Interest expense, net of capitalized interest, decreased by $248 million, or 16%, to $1.4 billion in 2024 from $1.6 billion in 2023. The decrease was substantially all due to a decrease in total debt and lower average interest rates.

Current wording

Interest expense, net of capitalized interest, decreased by $94 million, or 20%, to $377 million in 2025 from $471 million in 2024. The decrease was substantially all due to a decrease in total debt and lower average interest rates.

Previous wording

Debt extinguishment and modification costs decreased by $33 million, or 30%, to $78 million in 2024 from $112 million in 2023 as a result of debt transactions occurring during the respective periods.

Current wording

Debt extinguishment and modification costs increased by $218 million to $252 million in 2025 from $33 million in 2024 as a result of debt transactions occurring during the respective periods.

Previous wording

As of August 31, 2024, we had $4.5 billion of liquidity including $1.5 billion of cash and cash equivalents and $3.0 billion of borrowings available under our Revolving Facility. 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 February 28, 2025, we had $3.8 billion of liquidity including $0.8 billion of cash and cash equivalents and $2.9 billion of borrowings available under our multi-currency revolving credit facility. In addition, we had$7.8 billion of undrawn export credit facilities to fund ship deliveries planned through 2033. 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 $8.6 billion as of August 31, 2024 compared to a working capital deficit of $6.2 billion as of November 30, 2023. The increase in working capital deficit was caused by an increase in customer deposits, an increase in accrued liabilities and other, 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 $6.4 billion and $6.1 billion of customer deposits as of August 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.

Current wording

We had a working capital deficit of $8.6 billion as of February 28, 2025 compared to a working capital deficit of $8.2 billion as of November 30, 2024. The increase in working capital deficit was caused by an increase in customer deposits and decreases in cash and cash equivalents as well as accrued liabilities 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 $6.9 billion and $6.4 billion of current customer deposits as of February 28, 2025 and November 30, 2024. 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 $5.0 billion of net cash flows from operating activities during the nine months ended August 31, 2024, an increase of $1.7 billion, compared to $3.4 billion provided for the same period in 2023. This was caused by an increase in cash provided by the release of $0.8 billion in credit card reserve funds (included in the change in prepaid expenses and other assets) and our net income position of $1.6 billion in 2024 compared to our net loss position of $26 million for the same period in 2023, partially offset by a decrease in other working capital changes.

Current wording

Our business provided $0.9 billion of net cash flows from operating activities during the three months ended February 28, 2025, a decrease of $0.8 billion, compared to $1.8 billion provided for the same period in 2024. This was driven by the nonrecurrence of cash provided by the release of $0.8 billion in credit card reserves in 2024 (included in the change in prepaid expenses and other assets).

Previous wording

During the nine months ended August 31, 2024, net cash used in investing activities was $4.0 billion. This was caused by capital expenditures of $4.0 billion primarily attributable to the delivery of a 5,360 and a 4,310-passenger capacity NAA segment ships and one 2,960-passenger capacity Europe segment ship.

Current wording

During the three months ended February 29, 2024, net cash used in investing activities was $2.2 billion. This was driven by capital expenditures of $2.1 billion principally attributable to the delivery of two North America segment ships.

Previous wording

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

Current wording

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

Previous wording

•Debt issuance costs of $122 million

Current wording

•Debt issuance costs of $24 million

Previous wording

•Debt extinguishment costs of $41 million

Current wording

•Debt extinguishment costs of $197 million

Previous wording

•Debt issuance costs of $116 million

Current wording

•Debt issuance costs of $77 million

Previous wording

•Debt extinguishment costs of $67 million

Current wording

•Debt extinguishment costs of $31 million

Previous wording

As of August 31, 2024, we had $4.5 billion of liquidity including $1.5 billion of cash and cash equivalents and $3.0 billion of borrowings available under our Revolving Facility. Refer to Note 3 - “Debt” of the consolidated financial statements for additional discussion. In addition, we had $3.4 billion of undrawn export credit facilities to fund ship deliveries planned through 2028. We plan to use existing liquidity and future cash flows from operations to fund our cash requirements including capital expenditures not funded by our export credit facilities. We 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 financial institutions, and export credit agencies and diversifying our counterparties.

Current wording

We plan to use existing liquidity and future cash flows from operations to fund our cash requirements including capital expenditures not funded by our export credit facilities. We 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 financial institutions, and export credit agencies and diversifying our counterparties.