UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 2018August 31, 2022
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission file number: 001-9610
carnivalflaga01a01a02.jpg
Commission file number: 001-15136
Carnival Corporation
ccl-20220831_g1.jpg
Carnival plc
Carnival CorporationCarnival plc
(Exact name of registrant as

specified in its charter)
(Exact name of registrant as

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

incorporation or organization)
(State or other jurisdiction of

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

executive offices)

(Zip Code)
(Address of principal

executive offices)

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

(305)599-260001144 23 8065 5000
(Registrant’s telephone number,
including area code)		(Registrant’s telephone number,
including area code)
NoneNone
(Former name, former address
and former fiscal year, if
changed since last report)		(Former name, former address
and former fiscal year, if
changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock ($0.01 par value)CCLNew York Stock Exchange, Inc.
Ordinary Shares each represented by American Depository Shares ($1.66 par value), Special Voting Share, GBP 1.00 par value and Trust Shares of beneficial interest in the P&O Princess Special Voting TrustCUKNew York Stock Exchange, Inc.
1.875% Senior Notes due 2022CUK22New York Stock Exchange LLC
1.000% Senior Notes due 2029CUK29New York Stock Exchange LLC

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

☐
Emerging growth companies

☐
1

If emerging growth companies, indicate by check mark if the registrants have elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
At March 15, 2018,September 22, 2022, Carnival Corporation had outstanding 534,352,2221,112,706,805 shares of Common Stock, $0.01 par value.At March 15, 2018,September 22, 2022, Carnival plc had outstanding 207,338,276186,110,516 Ordinary Shares $1.66 par value, one Special Voting Share, GBP 1.00 par value and 534,352,2221,112,706,805 Trust Shares of beneficial interest in the P&O Princess Special Voting Trust.


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Table of Contents
CARNIVAL CORPORATION & PLC
TABLE OF CONTENTS
Page
Item 1.
4
Page
PART I - FINANCIAL INFORMATION
Item 1.
Financial Statements
3
Item 2.
1626
Item 3.
2634
Item 4.
2734
Item 1.
2835
Item 1A.��
2835
Item 2.
2835
Item 6.
3037
3239


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PART I - FINANCIAL INFORMATION


Item 1. Financial Statements.


CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(UNAUDITED)
(in millions, except per share data)
 Three Months Ended August 31,Nine Months Ended
August 31,
 2022202120222021
Revenues
  Passenger ticket$2,595 $303 $4,753 $326 
Onboard and other1,711 243 3,577 295 
4,305 546 8,329 621 
Operating Costs and Expenses
  Commissions, transportation and other565 79 1,141 116 
  Onboard and other537 72 1,060 94 
  Payroll and related563 375 1,601 834 
  Fuel668 182 1,577 398 
  Food259 52 586 80 
  Ship and other impairments— 475 8 524 
  Other operating787381 2,118 786 
3,379 1,616 8,092 2,832 
Selling and administrative625 425 1,774 1,305 
Depreciation and amortization581 562 1,707 1,681 
4,585 2,603 11,573 5,817 
Operating Income (Loss)(279)(2,057)(3,244)(5,196)
Nonoperating Income (Expense)
 Interest income24 3 34 10 
 Interest expense, net of capitalized interest(422)(418)(1,161)(1,253)
 Gain (loss) on debt extinguishment, net— (376)— (372)
 Other income (expense), net(81)(11)(108)(87)
(479)(802)(1,235)(1,702)
Income (Loss) Before Income Taxes(759)(2,859)(4,478)(6,898)
Income Tax Benefit (Expense), Net(11)23 (17)17 
Net Income (Loss)$(770)$(2,836)$(4,495)$(6,881)
Earnings Per Share
Basic$(0.65)$(2.50)$(3.89)$(6.14)
Diluted$(0.65)$(2.50)$(3.89)$(6.14)
 Three Months Ended
February 28,
 2018 2017
Revenues   
Cruise   
  Passenger ticket$3,148
 $2,804
  Onboard and other1,071
 978
Tour and other13
 9
 4,232
 3,791
Operating Costs and Expenses   
Cruise   
  Commissions, transportation and other663
 569
  Onboard and other140
 125
  Payroll and related558
 519
  Fuel359
 297
  Food264
 251
  Other ship operating711
 661
Tour and other14
 13
 2,709
 2,435
Selling and administrative616
 549
Depreciation and amortization488
 439
 3,813
 3,423
Operating Income419
 368
Nonoperating Income (Expense)   
Interest income3
 2
Interest expense, net of capitalized interest(48) (51)
Gains on fuel derivatives, net16
 27
Other income, net1
 8
 (28) (14)
Income Before Income Taxes390
 354
Income Tax Expense, Net—
 (2)
Net Income$391
 $352
Earnings Per Share   
Basic$0.54
 $0.48
Diluted$0.54
 $0.48
Dividends Declared Per Share$0.45
 $0.35

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

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Table of Contents
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(in millions)
 Three Months Ended
February 28,
 2018 2017
Net Income$391
 $352
Items Included in Other Comprehensive Income
 
Change in foreign currency translation adjustment292
 1
Other3
 14
Other Comprehensive Income295
 15
Total Comprehensive Income$686
 $367
 Three Months Ended August 31,Nine Months Ended
August 31,
 2022202120222021
Net Income (Loss)$(770)$(2,836)$(4,495)$(6,881)
Items Included in Other Comprehensive Income (Loss)
Change in foreign currency translation adjustment(283)(224)(529)79 
Other1 1 6 8 
Other Comprehensive Income (Loss)(282)(223)(523)87 
Total Comprehensive Income (Loss)$(1,052)$(3,059)$(5,018)$(6,794)
The accompanying notes are an integral part of these consolidated financial statements.



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Table of Contents
CARNIVAL CORPORATION & PLC
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except par values)
 February 28,
2018		 November 30,
2017
ASSETS   
Current Assets   
Cash and cash equivalents$453
 $395
Trade and other receivables, net345
 312
Inventories394
 387
Prepaid expenses and other475
 502
  Total current assets1,667
 1,596
Property and Equipment, Net35,027
 34,430
Goodwill3,014
 2,967
Other Intangibles1,198
 1,200
Other Assets535
 585
 $41,441
 $40,778
LIABILITIES AND SHAREHOLDERS’ EQUITY   
Current Liabilities   
Short-term borrowings$1,108
 $485
Current portion of long-term debt1,006
 1,717
Accounts payable795
 762
Accrued liabilities and other1,653
 1,877
Customer deposits4,288
 3,958
  Total current liabilities8,851
 8,800
Long-Term Debt7,445
 6,993
Other Long-Term Liabilities764
 769
Contingencies
 
Shareholders’ Equity   
Common stock of Carnival Corporation, $0.01 par value; 1,960 shares authorized; 656 shares at 2018 and 655 shares at 2017 issued7
 7
Ordinary shares of Carnival plc, $1.66 par value; 217 shares at 2018 and 2017 issued358
 358
Additional paid-in capital8,708
 8,690
Retained earnings23,360
 23,292
Accumulated other comprehensive loss(1,486) (1,782)
Treasury stock, 122 shares at 2018 and 2017 of Carnival Corporation and 35 shares at 2018 and 32 shares at 2017 of Carnival plc, at cost(6,565) (6,349)
  Total shareholders’ equity24,382
 24,216
 $41,441
 $40,778
 August 31,
2022		November 30, 2021
ASSETS
Current Assets
Cash and cash equivalents$7,071 $8,939 
Short-term investments— 200 
Trade and other receivables, net360 246 
Inventories420 356 
Prepaid expenses and other581 392 
  Total current assets8,432 10,133 
Property and Equipment, Net38,137 38,107 
Operating Lease Right-of-Use Assets1,163 1,333 
Goodwill579 579 
Other Intangibles1,151 1,181 
Other Assets2,455 2,011 
$51,917 $53,344 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Short-term borrowings$2,675 $2,790 
Current portion of long-term debt2,877 1,927 
Current portion of operating lease liabilities139 142 
Accounts payable920 797 
Accrued liabilities and other1,873 1,641 
Customer deposits4,470 3,112 
  Total current liabilities12,954 10,408 
Long-Term Debt28,518 28,509 
Long-Term Operating Lease Liabilities
1,076 1,239 
Other Long-Term Liabilities989 1,043 
Contingencies and Commitments
Shareholders’ Equity
Common stock of Carnival Corporation, $0.01 par value; 1,960 shares authorized; 1,243 shares at 2022 and 1,116 shares at 2021 issued12 11 
Ordinary shares of Carnival plc, $1.66 par value; 217 shares at 2022 and 2021 issued361 361 
Additional paid-in capital16,626 15,292 
Retained earnings1,868 6,448 
Accumulated other comprehensive income (loss) (“AOCI”)(2,024)(1,501)
Treasury stock, 130 shares at 2022 and 2021 of Carnival Corporation and 71 shares at 2022 and 67 shares at 2021 of Carnival plc, at cost(8,464)(8,466)
  Total shareholders’ equity8,379 12,144 
$51,917 $53,344 
The accompanying notes are an integral part of these consolidated financial statements.

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Table of Contents
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in millions)
 Nine Months Ended August 31, 2022
 20222021
OPERATING ACTIVITIES
Net income (loss)$(4,495)$(6,881)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation and amortization1,707 1,681 
Impairments8 541 
(Gain) loss on debt extinguishment— 372 
(Income) loss from equity-method investments— 35 
Share-based compensation79 95 
Amortization of discounts and debt issue costs131 131 
Noncash lease expense103 106 
Other, net30 85 
(2,438)(3,834)
Changes in operating assets and liabilities
Receivables(134)(37)
Inventories(87)(19)
Prepaid expenses and other(716)(1,221)
Accounts payable176 15 
Accrued liabilities and other262 458 
Customer deposits1,383 897 
Net cash provided by (used in) operating activities(1,553)(3,741)
INVESTING ACTIVITIES
Purchases of property and equipment(3,759)(3,120)
Proceeds from sales of ships and other55 351 
Purchase of minority interest(1)(90)
Purchase of short-term investments(315)(2,672)
Proceeds from maturity of short-term investments515 2,026 
Derivative settlements and other, net38 (29)
Net cash provided by (used in) investing activities(3,467)(3,535)
FINANCING ACTIVITIES
Proceeds from (repayments of) short-term borrowings, net(114)17 
Principal repayments of long-term debt(1,073)(3,507)
Premium paid on extinguishment of debt— (286)
Proceeds from issuance of long-term debt3,334 7,900 
Issuance of common stock, net1,180 1,003 
Issuance of common stock under the Stock Swap Program89 105 
Purchase of treasury stock under the Stock Swap Program(82)(94)
Debt issue costs and other, net(117)(239)
Net cash provided by (used in) financing activities3,217 4,899 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(67)13 
Net increase (decrease) in cash, cash equivalents and restricted cash(1,870)(2,363)
Cash, cash equivalents and restricted cash at beginning of period8,976 9,692 
Cash, cash equivalents and restricted cash at end of period$7,107 $7,329 
 Three Months Ended February 28,
 2018 2017
OPERATING ACTIVITIES   
Net income$391
 $352
Adjustments to reconcile net income to net cash provided by operating activities   
Depreciation and amortization488
 439
Gains on fuel derivatives, net(16) (27)
Share-based compensation18
 20
Other, net24
 20
 904
 804
Changes in operating assets and liabilities   
Receivables(30) (2)
Inventories1
 (35)
Prepaid expenses and other98
 (10)
Accounts payable19
 (47)
Accrued liabilities and other(198) 3
Customer deposits271
 219
Net cash provided by operating activities1,064
 932
INVESTING ACTIVITIES   
Purchases of property and equipment(574) (412)
Payments of fuel derivative settlements(21) (52)
Other, net4
 (10)
Net cash used in investing activities(591) (474)
FINANCING ACTIVITIES   
Proceeds from (repayments of) short-term borrowings, net611
 (289)
Principal repayments of long-term debt(963) (101)
Proceeds from issuance of long-term debt469
 100
Dividends paid(323) (254)
Purchases of treasury stock(218) (69)
Other, net(4) (2)
Net cash used in financing activities(428) (615)
Effect of exchange rate changes on cash and cash equivalents12
 (9)
Net increase (decrease) in cash and cash equivalents58
 (166)
Cash and cash equivalents at beginning of period395
 603
Cash and cash equivalents at end of period$453
 $437

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

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Table of Contents
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(UNAUDITED)
(in millions)
Three Months Ended
Common
stock		Ordinary
shares		Additional
paid-in
capital		Retained
earnings		AOCITreasury
stock		Total shareholders’ equity
At May 31, 2021$11 $361 $15,005 $12,030 $(1,126)$(8,404)$17,876 
Net income (loss)— — — (2,836)— — (2,836)
Other comprehensive income (loss)— — — — (223)— (223)
Issuance of common stock, net— — 7 — — — 7 
Conversion of Convertible Notes— — 2 — — — 2 
Purchases and issuances under the Stock Swap Program— — 105 — — (95)10 
Share-based compensation and other— — 28 — — — 28 
At August 31, 2021$11 $361 $15,146 $9,194 $(1,349)$(8,500)$14,863 
At May 31, 2022$11 $361 $15,457 $2,649 $(1,742)$(8,476)$8,260 
Net income (loss)— — — (770)— — (770)
Other comprehensive income (loss)— — — — (282)— (282)
Issuances of common stock, net1 — 1,148 — — — 1,149 
Issuance of treasury shares for vested share-based awards— — — (12)— 12 — 
Share-based compensation and other— — 22 — — — 22 
At August 31, 2022$12 $361 $16,626 $1,868 $(2,024)$(8,464)$8,379 

Nine Months Ended
Common
stock		Ordinary
shares		Additional
paid-in
capital		Retained
earnings		AOCITreasury
stock		Total shareholders’ equity
At November 30, 2020$11 $361 $13,948 $16,075 $(1,436)$(8,404)$20,555 
Net income (loss)— — — (6,881)— — (6,881)
Other comprehensive income (loss)— — — — 87 — 87 
Issuance of common stock, net— — 1,003 — — — 1,003 
Conversion of Convertible Notes— — 2 — — — 2 
Purchases and issuances under the Stock Swap Program— — 105 — — (95)10 
Share-based compensation and other— — 88 — — — 88 
At August 31, 2021$11 $361 $15,146 $9,194 $(1,349)$(8,500)$14,863 
At November 30, 2021$11 $361 $15,292 $6,448 $(1,501)$(8,466)$12,144 
Net income (loss)— — — (4,495)— — (4,495)
Other comprehensive income (loss)— — — — (523)— (523)
Issuances of common stock, net1 — 1,178 — — — 1,180 
Purchases and issuances under the Stock Swap program, net— — 89 — — (82)8 
Issuance of treasury shares for vested share-based awards— — — (84)— 84 — 
Share-based compensation and other— — 67 (1)— — 66 
At August 31, 2022$12 $361 $16,626 $1,868 $(2,024)$(8,464)$8,379 
The accompanying notes are an integral part of these consolidated financial statements.
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CARNIVAL CORPORATION & PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1 – General


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


Liquidity and Management’s Plans

In the face of the global impact of COVID-19, we paused our guest cruise operations in mid-March 2020 and began resuming guest cruise operations in 2021. As of August 31, 2022, 93% of our capacity was serving guests.

COVID-19 and its ongoing effects, inflation, higher fuel prices and higher interest rates are collectively having a material impact on our business, including our results of operations, liquidity and financial position. The extent of the collective impact of such items is uncertain and will depend on future developments, including the length of time it takes to return the company to profitability.

The estimation of our future liquidity requirements includes numerous assumptions that are subject to various risks and uncertainties. The principal assumptions used to estimate our future liquidity requirements consist of:

•Continued resumption of guest cruise operations
•Expected increases in revenue in 2023 on a per passenger basis compared to 2019, particularly with the relaxation of COVID-19 related protocols aligning towards land-based vacation alternatives
•Expected improvement in occupancy on a year-over-year basis returning to historical levels during 2023
•Expected moderation of fuel prices continuing into the fourth quarter of 2022 and 2023
•Expected inflation and supply chain challenges to continue to weigh on costs, though moderated by a larger, more efficient fleet as compared to 2019
•Maintaining collateral and reserves at reasonable levels

In addition, we make certain assumptions about new ship deliveries, improvements and removals, and consider the future export credit financings that are associated with the new ship deliveries.

We cannot make assurances that our assumptions used to estimate our liquidity requirements may not change because we have never previously experienced a complete cessation and subsequent resumption of our guest cruise operations, and as a consequence, our ability to be predictive is uncertain. In addition, the effects of the COVID-19 global pandemic, inflation, higher fuel prices and higher interest rates are uncertain. We have made reasonable estimates and judgments of the impact of these events within our consolidated financial statements and there may be changes to those estimates in future periods. We took, and may continue as appropriate to take, actions to improve our liquidity, including completing various capital market transactions, capital expenditure and operating expense reductions and accelerating the removal of certain ships from our fleet. We expect to continue to address maturities well in advance and obtain relevant financial covenant amendments or waivers, as needed.

Based on these actions and our assumptions, considering our $7.4 billion of liquidity including cash and borrowings available under our $1.7 billion, €1.0 billion and £0.2 billion multi-currency revolving credit facility (the “Revolving Facility”) at August 31, 2022, as well as our continued return to service, we have concluded that we have sufficient liquidity to satisfy our obligations for at least the next twelve months.

Basis of Presentation

The Consolidated Statements of Income and(Loss), the Consolidated Statements of Comprehensive Income (Loss) and the Consolidated Statements of Shareholders’ Equity for the three and nine months ended February 28, 2018August 31, 2022 and 2017, the Consolidated Balance Sheet at February 28, 2018 and2021, the Consolidated Statements of Cash Flows for the threenine months ended February 28, 2018August 31, 2022 and 20172021 and the Consolidated Balance Sheet at August 31, 2022 are unaudited and, in the opinion of our management, contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement. Our interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in the Carnival Corporation & plc 20172021 joint Annual Report on Form 10-K (“Form 10-K”) filed with the U.S. Securities and Exchange Commission on January 29, 2018. Our27, 2022.
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Use of Estimates and Risks and Uncertainty

The preparation of our interim consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported and disclosed. The full extent to which the effects of COVID-19, inflation, higher fuel prices and higher interest rates will directly or indirectly impact our business, operations, results of operations and financial condition, including our valuation of goodwill and trademarks, impairment of ships, collectability of trade and notes receivables as well as provisions for pending litigation, will depend on future developments that are seasonaluncertain. We have made reasonable estimates and results for interim periods are not necessarily indicativejudgments of the results for the entire year.such items within our financial statements and there may be changes to those estimates in future periods.

Accounting Pronouncements


TheIn March 2020, the Financial Accounting Standards Board (the “FASB”(“FASB”) issued amended guidance, Compensation - Retirement Benefits - ImprovingAccounting Standard Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the PresentationEffects of Net Periodic Pension Cost and Net Periodic Postretirement Benefit CostReference Rate Reform on Financial Reporting (“ASU No. 2020-04”), which requiresprovides temporary optional expedients and exceptions to accounting guidance on contract modifications and hedge accounting to ease entities’ financial reporting burdens as the bifurcation of service costsmarket transitions from the London Interbank Offered Rate (“LIBOR”) and other componentsinterbank offered rates to alternative reference rates. ASU 2020-04 is effective upon issuance and can be applied through December 31, 2022. The use of net benefit cost. The presentationLIBOR was phased out at the end of 2021, although the other componentsphase-out of net benefit costU.S. dollar LIBOR for existing agreements has been delayed until June 2023. We continue to monitor developments related to the LIBOR transition and identification of an alternative, market-accepted rate.

In December 2021, we amended our £350 million long-term debt agreement which referenced the British Pound sterling (“GBP”) LIBOR to the Sterling Overnight Index Average (“SONIA”) and applied the practical expedient. This amendment did not have been recorded in other income. On December 1, 2017, we adopteda material impact on our consolidated financial statements. As of August 31, 2022, approximately $8.4 billion of our outstanding indebtedness bears interest at floating rates referenced to U.S. dollar LIBOR with maturity dates extending beyond June 30, 2023. We are currently evaluating our contracts referenced to U.S. dollar LIBOR and working with our creditors on updating credit agreements as necessary to include language regarding the successor or alternate rate to LIBOR. We do not expect the adoption of this guidance using the retrospective transition method for the presentation of the service cost component and other components of net benefit cost. Thestandard to have a material impact of adopting this guidance was immaterial toon our consolidated financial statements and as such, prior period information was not revised.during the LIBOR transition period.


The FASB issued guidance,Revenue from Debt - Debt with Conversion and Other Options and Derivative and Hedging - Contracts with Customersin Entity’s Own Equity, which requiressimplifies the accounting for convertible instruments. This guidance eliminates certain models that require separate accounting for embedded conversion features, in certain cases. Additionally, among other changes, the guidance eliminates certain of the conditions for equity classification for contracts in an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. When effective, this standard will replace most existing revenue recognitionentity’s own equity. The guidance in U.S. generally accepted accounting principles (“U.S. GAAP”). The standard also requires more detailed disclosuresentities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and provides additionalinclude the effect of share settlement for instruments that may be settled in cash or shares, except for certain liability-classified share-based payment awards. We will adopt this guidance for transactions that were not comprehensively addressed in U.S. GAAP. This guidance is required to be adopted by us in the first quarter of 2019 and can be applied2023 using either a retrospective or athe modified retrospective approach. Based on our assessment to date,We do not expect the adoption of this guidance is not expected to have a material impact to the timing of our recognition of revenue and will require additional disclosures. We are currently evaluating if this guidance will have any other impact on our consolidated financial statements.


The FASB issued amended guidance, Business Combinations - Clarifying the Definition
NOTE 2 – Revenue and Expense Recognition

Guest cruise deposits and advance onboard purchases are initially included in customer deposit liabilities when received. Customer deposits are subsequently recognized as cruise revenues, together with revenues from onboard and other activities, and all associated direct costs and expenses of a Business,which assists entitiesvoyage are recognized as cruise costs and expenses, upon completion of voyages with evaluating whether transactions should be accounted for as acquisitions (or disposals)durations of assetsten nights or businesses. This guidance is required to be adopted by us in the first quarter of 2019less and on a prospective basis. Early adoption is permitted, including adoptionpro rata basis for voyages in an interim period.excess of ten nights. The adoptionimpact of this guidancerecognizing these shorter duration cruise revenues and costs and expenses on a completed voyage basis versus on a pro rata basis is not expected to have a material impact tomaterial. Certain of our consolidated financial statements.

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

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

The FASB issued amended guidance, Service Concession Arrangements, which clarifies that the grantor in a service arrangement should be considered the customervalue of the operating entitybundled services and goods between passenger ticket revenues and onboard and other revenues based upon the estimated standalone selling prices of those goods and services. Guest cancellation fees, when applicable, are recognized in all cases. This guidance is requiredpassenger ticket revenues at the time of cancellation.

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


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

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

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

Other

Cruise passengerPassenger ticket revenues include fees, taxes and charges collected by us from our guests. The portion of thesefees, taxes and charges that vary with guest head counts and are directly imposed on a revenue-producing arrangement are expensed in commissions, transportation and other costs when the corresponding revenues are recognized. For the three and nine months ended August 31, fees, taxes, and charges included in passenger ticket revenues and commissions, transportation and other costs were $148$141 million and $143$305 million in 2022 and were $16 million and $28 million in 2021. The remaining portion of fees, taxes and charges are expensed in other operating expenses when the corresponding revenues are recognized.

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

Customer Deposits

Our payment terms generally require an initial deposit to confirm a reservation, with the balance due prior to the voyage. Cash received from guests in advance of the cruise is recorded in customer deposits and in other long-term liabilities on our Consolidated Balance Sheets. These amounts include refundable deposits. In certain situations, we have provided flexibility to guests by allowing guests to rebook at a future date, receive future cruise credits (“FCCs”) or elect to receive refunds in cash. We have at times issued enhanced FCCs. Enhanced FCCs provide the guest with an additional credit value above the original cash deposit received, and the enhanced value is recognized as a discount applied to the future cruise in the period used. We record a liability for unexpired FCCs to the extent we have received and not refunded cash from guests for cancelled bookings. We had total customer deposits of $4.8 billion as of August 31, 2022 and $3.5 billion as of November 30, 2021. Refunds payable to guests who have elected cash refunds are recorded in accounts payable. During the nine months ended August 31, 2022 and 2021, we recognized revenues of $1.7 billion and an immaterial amount related to our customer deposits as of November 30, 2021 and 2020. Historically, our customer deposits balance changes due to the seasonal nature of cash collections, the recognition of revenue, refunds of customer deposits and foreign currency translation.

Trade and Other Receivables

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

Contract Assets

Contract assets are amounts paid prior to the start of a voyage as a result of obtaining the ticket contract and include prepaid travel agent commissions and prepaid credit and debit card fees. We record these amounts within prepaid expenses and other and subsequently recognize these amounts as commissions, transportation and other at the time of revenue recognition or at the time of voyage cancellation. We had contract assets of $191 million as of August 31, 2022 and $55 million as of November 30, 2021.

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NOTE 3 – Debt

August 31,November 30,
(in millions)MaturityRate (a) (b)20222021
Secured Debt
Notes
NotesFeb 202610.5%$775 $775 
EUR NotesFeb 202610.1%425 481 
NotesJun 20277.9%192 192 
NotesAug 20279.9%900 900 
NotesAug 20284.0%2,406 2,406 
Loans
EUR fixed rateNov 20225.5% - 6.2%67 98 
EUR floating rateNov 2022 - Jun 2025EURIBOR + 2.7% - 3.8%829 951 
Floating rateJun 2025 - Oct 2028LIBOR + 3.0% - 3.3%4,111 4,137 
Total Secured Debt9,704 9,939 
Unsecured Debt
Revolver
Facility(c)LIBOR + 0.7%2,675 2,790 
Notes
EUR NotesNov 20221.9%550 622 
Convertible NotesApr 20235.8%183 522 
NotesOct 20237.2%125 125 
Convertible NotesOct 20245.8%339 — 
NotesMar 20267.6%1,450 1,450 
EUR NotesMar 20267.6%500 566 
NotesMar 20275.8%3,500 3,500 
NotesJan 20286.7%200 200 
NotesMay 20296.0%2,000 2,000 
EUR NotesOct 20291.0%600 679 
NotesJun 203010.5%1,000 — 
Loans
Floating rateFeb 2023 - Sep 2024LIBOR + 3.8% - 4.5%590 590 
GBP floating rateFeb 2025SONIA + 0.9% (d)410 467 
EUR floating rateDec 2021 - Mar 2026EURIBOR + 1.8% - 4.8%800 1,375 
Export Credit Facilities
Floating rateFeb 2022 - Dec 2031LIBOR + 0.5% - 1.5%1,312 1,363 
Fixed rateAug 2027 - Dec 20322.4% - 3.4%3,240 3,488 
EUR floating rateFeb 2022 - Dec 2033EURIBOR + 0.2% - 1.6%3,102 2,742 
EUR fixed rateFeb 2031 - Jan 20341.1% - 1.6%2,529 1,551 
Total Unsecured Debt25,104 24,031 
Total Debt34,808 33,970 
Less: unamortized debt issuance costs and discounts(737)(744)
Total Debt, net of unamortized debt issuance costs and discounts34,071 33,226 
Less: short-term borrowings(2,675)(2,790)
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Less: current portion of long-term debt(2,877)(1,927)
Long-Term Debt$28,518 $28,509 

(a)Substantially all of our variable debt has a 0.0% to 0.75% floor.
(b)The above debt table does not include the impact of our interest rate swaps and as of November 30, 2021, it also excludes the impact of our foreign currency swaps. As of August 31, 2022, we had no foreign currency swaps. The interest rates on some of our debt, including our Revolving Facility, fluctuate based on the applicable rating of senior unsecured long-term securities of Carnival Corporation or Carnival plc.
(c)Amounts outstanding under our Revolving Facility were drawn in 2020 for an initial six-month term. We may continue to re-borrow or otherwise utilize available amounts under the Revolving Facility through August 2024, subject to satisfaction of the conditions in the facility. We had $0.3 billion available for borrowing under our Revolving Facility as of August 31, 2022. The Revolving Facility also includes an emissions linked margin adjustment whereby, after the initial applicable margin is set per the margin pricing grid, the margin may be adjusted based on performance in achieving certain agreed annual carbon emissions goals. We are required to pay a commitment fee on any unutilized portion.
(d)As of August 31, 2022 the interest rate for the three months ended February 28, 2018GBP unsecured loan was linked to SONIA and 2017, respectively.subject to a credit adjustment spread ranging from 0.03% to 0.28%. As of November 30, 2021, this loan was referenced to GBP LIBOR.


Carnival Corporation and/or Carnival plc is the primary obligor of all of our debt, with the exception of $0.6 billion of debt for which our subsidiary Costa Crociere S.p.A. is the primary obligor, and which is guaranteed by Carnival Corporation and Carnival plc.
NOTE 2 – Unsecured Debt

Short-Term Borrowings
At February 28, 2018,
As of August 31, 2022 and November 30, 2021, our short-term borrowings consisted of euro-$2.7 billion and U.S. dollar-denominated commercial paper of $862 million and a euro-denominated bank loan of $246 million$2.8 billion under our Revolving Facility.

Export Credit Facility Borrowings

During the nine months ended August 31, 2022, we borrowed $2.3 billion under export credit facilities due in 2019. Forsemi-annual installments through 2034. As of August 31, 2022, the three months endednet book value of the vessels subject to negative pledges was $13.0 billion.

Secured Debt

Our secured debt is secured on either a first or second-priority basis, depending on the instrument, by certain collateral, which includes vessels and certain assets related to those vessels and material intellectual property (combined net book value of approximately $24.0 billion, including $22.4 billion related to vessels and certain assets related to those vessels) as of August 31, 2022 and certain other assets.

2030 Senior Unsecured Notes

In May 2022, we issued an aggregate principal amount of $1.0 billion senior unsecured notes that mature on June 1, 2030 (the “2030 Senior Unsecured Notes”). The 2030 Senior Unsecured Notes bear interest at a rate of 10.5% per year.

Convertible Notes

In 2020, we issued $2.0 billion aggregate principal amount of 5.75% convertible senior notes due 2023 (the “2023 Convertible Notes”). The 2023 Convertible Notes mature on April 1, 2023, unless earlier repurchased or redeemed by us or earlier converted in accordance with their terms prior to the maturity date. Since April 2020, we repurchased, exchanged and converted a portion of the 2023 Convertible Notes which resulted in a decrease of the principal amount of the 2023 Convertible Notes to $0.2 billion.

In August 2022, we issued $339 million aggregate principal amount of 5.75% convertible senior notes due 2024 (the “2024 Convertible Notes” and, together with the 2023 Convertible Notes, the “Convertible Notes”) pursuant to privately-negotiated non-cash exchange agreements with certain holders of the 2023 Convertible Notes, pursuant to which such holders agreed to exchange their 2023 Convertible Notes for an equal amount of 2024 Convertible Notes. The 2024 Convertible Notes mature on
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October 1, 2024, unless earlier repurchased or redeemed by us or earlier converted in accordance with their terms prior to the maturity date.

The Convertible Notes are convertible by holders, subject to the conditions described within the respective indentures that govern the Convertible Notes, into cash, shares of Carnival Corporation common stock, or a combination thereof, at our election. The Convertible Notes have an initial conversion rate of 100 shares of Carnival Corporation common stock per $1,000 principal amount of the Convertible Notes, equivalent to an initial conversion price of $10 per share of common stock. The initial conversion price of the Convertible Notes is subject to certain anti-dilutive adjustments and may also increase if such Convertible Notes are converted in connection with a tax redemption or certain corporate events. The 2024 Convertible Notes were convertible from the date of issuance of the 2024 Convertible Notes until August 31, 2022, and thereafter may become convertible if certain conditions are met. As of August 31, 2022, no condition allowing holders of the 2023 Convertible Notes or the 2024 Convertible Notes to convert had been met and therefore the Convertible Notes are not convertible.

We may redeem the 2023 Convertible Notes, in whole but not in part, at any time on or prior to December 31, 2022 at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, if we or any guarantor would have to pay any additional amounts on the 2023 Convertible Notes due to a change in tax laws, regulations or rulings or a change in the official application, administration or interpretation thereof. We may redeem the 2024 Convertible Notes, in whole but not in part, at any time on or prior to June 30, 2024 at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, if we or any guarantor would have to pay any additional amounts on the 2024 Convertible Notes due to a change in tax laws, regulations or rulings or a change in the official application, administration or interpretation thereof.

We account for the Convertible Notes as separate liability and equity components. We determined the carrying amount of the liability component as the present value of its cash flows.

The carrying amount of the equity component representing the conversion option was $286 million on the date of issuance of the 2023 Convertible Notes and was calculated by deducting the carrying value of the liability component from the initial proceeds from the 2023 Convertible Notes. The carrying amount of the equity component was reduced to zero in conjunction with the partial repurchase of Convertible Notes in August 2020 because at the time of repurchase, the fair value of the equity component for the portion of the Convertible Notes that was repurchased, exceeded the total amount of the equity component recorded at the time the Convertible Notes were issued. The fair value of the conversion option remained unchanged after the exchange of the portion of the 2023 Convertible Notes for the 2024 Convertible Notes and, as a result, there was no adjustment to the carrying amount of the equity component.

The debt discount, which represented the excess of the principal amount of the 2023 Convertible Notes over the carrying amount of the liability component on the date of issuance of the 2023 Convertible Notes, was capitalized and amortized to interest expense under the effective interest rate method over the term of the 2023 Convertible Notes. Following the exchange of the portion of the 2023 Convertible Notes for the 2024 Convertible Notes, the remaining unamortized discount was allocated between the 2023 Convertible Notes and the 2024 Convertible Notes and is amortized to interest expense over each respective term using the effective interest rate method.

The net carrying value of the liability component of the Convertible Notes was as follows:
(in millions)August 31, 2022November 30, 2021
Principal$522 $522 
Less: Unamortized debt discount(22)(45)
$501 $478 

As of August 31, 2022, the if-converted value on available shares of 52 million for the Convertible Notes was below par.

Covenant Compliance

As of August 31, 2022, our Revolving Facility and substantially all of our unsecured loans and export credit facilities contain certain covenants, the most restrictive of which require us to:

•Maintain minimum interest coverage (adjusted EBITDA to consolidated net interest charges) (the “Interest Coverage Covenant”) at the end of each fiscal quarter from August 31, 2023, at a ratio of not less than 2.0 to 1.0 for the August
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31, 2023 testing date, 2.5 to 1.0 for the November 30, 2023 testing date, and 3.0 to 1.0 for the February 28, 201829, 2024 testing date onwards, or through their respective maturity dates
•Maintain minimum shareholders’ equity of $5.0 billion
•Limit our debt to capital (as defined) percentage from the November 30, 2021 testing date until the May 31, 2023 testing date, to a percentage not to exceed 75%, following which it will be tested at levels which decline ratably to 65% from the May 31, 2024 testing date onwards
•Maintain minimum liquidity of $1.5 billion through November 30, 2026
•Adhere to certain restrictive covenants through November 30, 2024
•Limit the amounts of our secured assets as well as secured and 2017,other indebtedness

During August and September 2022, we hadentered into letter agreements to waive compliance with the Interest Coverage Covenant under our Revolving Facility and $0.7 billion of $11.4 billion of our unsecured loans and export credit facilities, which contain the covenant through February 29, 2024. We will be required to comply beginning with the next testing date of May 31, 2024.

At August 31, 2022, we were in compliance with the applicable covenants under our debt agreements. 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. Any financial covenant amendment may lead to increased costs, increased interest rates, additional restrictive covenants and other available lenderprotections that would be applicable.

Carnival Corporation or Carnival plc and certain of our subsidiaries have guaranteed substantially all of our indebtedness.

As of August 31, 2022, the scheduled maturities of our debt are as follows:
(in millions)
YearPrincipal Payments
4Q 2022$991 
20232,377 
2024 (a)4,935 
20254,258 
20264,385 
Thereafter17,862 
Total$34,808 
(a)Includes borrowings of $2 million and $111 million and repayments$2.7 billion under our Revolving Facility. Amounts outstanding under our Revolving Facility were drawn in 2020 for an initial six-month term. We may continue to re-borrow or otherwise utilize available amounts under the Revolving Facility through August 2024, subject to satisfaction of $0 million and $240 millionthe conditions in the facility. We had $0.3 billion available for borrowing under our Revolving Facility as of commercial paper with original maturities greater than three months.August 31, 2022.


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

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

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

NOTE 34 – Contingencies and Commitments

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

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

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

As previously disclosed, on May 2, 2019, two lawsuits were filed against Carnival Corporation in the U.S. District Court for the Southern District of Florida under Title III of the Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton Act, alleging that Carnival Corporation “trafficked” in confiscated Cuban property when certain ships docked at certain ports in Cuba, and that this alleged “trafficking” entitles the plaintiffs to treble damages. In the matter filed by Havana Docks Corporation, the hearings on motions for summary judgment were concluded on January 18, 2022. On March 21, 2022, the court granted summary judgment in favor of Havana Docks Corporation as to liability. On August 31, 2022, the court determined that the trebling provision of the Helms-Burton statute applies to damages and interest. Accordingly, we have adjusted our estimated liability for this matter as of August 31, 2022. The court held a status conference on September 22, 2022, at which time it was determined that a jury trial is no longer necessary. All remaining issues, including calculation of damages and certain pending constitutional matters, will be addressed via briefing to the court. The briefing schedule is set to have all briefing completed on December 2, 2022. In the matter filed by Javier Bengochea on December 20, 2021, the court issued an order inviting an amicus brief from the U.S. government on several issues involved in the appeal. The U.S. government filed its brief and the court ordered the parties to respond. On May 6, 2022 we filed our response brief. We continue to believe we have a meritorious defense to these actions and we believe that any final liability which may arise as a result of these actions is unlikely to have a material impact on our consolidated financial statements.

As previously disclosed, on April 8, 2020, DeCurtis LLC (“DeCurtis”), a former vendor, filed an action against Carnival Corporation in the U.S. District Court for the Middle District of Florida seeking declaratory relief that DeCurtis is not infringing on several of Carnival Corporation’s patents in relation to its OCEAN Medallion systems and technology. The action also raises certain monopolization claims under The Sherman Antitrust Act of 1890, unfair competition and tortious interference, and seeks declaratory judgment that certain Carnival Corporation patents are unenforceable. DeCurtis seeks damages, including its fees and costs, and seeks declarations that it is not infringing and/or that Carnival Corporation’s patents are unenforceable. On April 10, 2020, Carnival Corporation filed an action against DeCurtis in the U.S. District Court for the Southern District of Florida for breach of contract, trade secrets violations and patent infringement. Carnival Corporation seeks damages, including its fees and costs, as well as an order permanently enjoining DeCurtis from engaging in such activities. These two cases have now been consolidated in the Southern District of Florida. On April 25, 2022, we moved for summary judgment on our breach of contract claims and on all of DeCurtis’s claims. DeCurtis also filed a motion for summary judgment on certain portions of our claims. Both motions for summary judgment are fully briefed. On July 28, 2022, the court adopted the Magistrate Judge’s report and recommendation granting our opening claim construction brief and denying DeCurtis’s motion for summary judgment regarding the invalidity of various patent claims. The court has set the trial date for February 27, 2023. We believe the ultimate outcome of these claims and lawsuits will not have a material impact on our consolidated financial statements.

COVID-19 Actions

Private Actions

We have been named in a number of individual actions related to COVID-19. Private parties have brought approximately 73 individual lawsuits as of August 31, 2022 in several U.S. federal and state courts as well as others in France, Belgium, Italy and Brazil. These actions include tort claims based on a variety of theories, including negligence and failure to warn. The plaintiffs in these actions allege a variety of injuries: some plaintiffs confined their claim to emotional distress, while others allege injuries arising from testing positive for COVID-19. A smaller number of actions include wrongful death claims. As of August 31, 2022, 71 of these individual actions in the U.S. have now been dismissed or settled for immaterial amounts and two remain. We believe the ultimate outcome of the remaining individual actions will not have a material impact on our consolidated financial statements.

Additionally, as of August 31, 2022, 10 purported class actions have been brought by former guests from Ruby Princess, Diamond Princess, Grand Princess, Coral Princess and Zaandam in several U.S. federal courts and in the Federal Court of Australia. These actions include tort claims based on a variety of theories, including negligence, gross negligence and failure to warn, physical injuries and severe emotional distress associated with being exposed to and/or contracting COVID-19 onboard. As of August 31, 2022, nine of these class actions have either been settled individually for immaterial amounts or had their class allegations dismissed by the courts and only the Australian matter remains.

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

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

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Governmental Inquiries and Investigations

Federal and non-U.S. governmental agencies and officials are investigating or otherwise seeking information, testimony and/or documents, regarding COVID-19 incidents and related matters. We are investigating these matters internally and are cooperating with all requests. The investigations could result in the imposition of civil and criminal penalties in the future.

Other Regulatory or Governmental Inquiries and Investigations

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

As previously disclosed, on June 24, 2022, we finalized a settlement with the New York Department of Financial Services (“NY DFS”) in connection with previously disclosed cybersecurity events, pursuant to which we have paid an amount that did not have a material impact on our consolidated financial statements. In addition, as previously disclosed, we finalized a settlement with the State Attorneys General from 46 states in connection with the same cybersecurity events, pursuant to which we have paid an amount that did not have a material impact on our consolidated financial statements.

We continue to work with regulators regarding cyber incidents we have experienced. We have incurred legal and other costs in connection with cyber incidents that have impacted us. While these incidents are not expected to have a material adverse effect on our business, results of operations, financial position or liquidity, no assurances can be given about the future and we may be subject to future litigation, attacks or incidents that could have such a material adverse effect.

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

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

We have agreements with a number of credit card processors that transact customer deposits related to our cruise vacations. Certain of these agreements allow the credit card processors to request, under certain circumstances, that we provide a reserve fund in cash. Although the agreements vary, these requirements may generally be satisfied either through a withheld percentage of customer payments or providing cash funds directly to the credit card processor. As of August 31, 2022 and November 30, 2021, we had $1.6 billion and $1.1 billion in reserve funds related to our customer deposits provided to satisfy these requirements which are included within other assets. We continue to expect to provide reserve funds under these agreements. Additionally, as of August 31, 2022 and November 30, 2021, we had $30 million of cash collateral in escrow which is included within other assets.

Ship Commitments

As of August 31, 2022, we expect the timing of our new ship growth capital commitments to be as follows:
(in millions)
Year
Remainder of 2022$1,117 
20232,268 
20241,499 (a)
2025864 (a)
Thereafter— 
$5,748 

(a) Includes a ship subject to financing

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


Financial Instruments that are not Measured at Fair Value on a Recurring Basis
February 28, 2018 November 30, 2017 August 31, 2022November 30, 2021
Carrying
Value		 Fair Value Carrying
Value		 Fair Value Carrying
Value		Fair ValueCarrying
Value		Fair Value
(in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3(in millions)Level 1Level 2Level 3Level 1Level 2Level 3
Assets      
       
Long-term other assets (a)$117
 $—
 $43
 $71
 $126
 $—
 $49
 $75
LiabilitiesLiabilities
Fixed rate debt (a)Fixed rate debt (a)$20,980 $— $16,431 $— $19,555 $— $19,013 $— 
Floating rate debt (a)Floating rate debt (a)13,828 — 12,004 — 14,415 — 13,451 — 
Total$117
 $—
 $43
 $71
 $126
 $—
 $49
 $75
Total$34,808 $— $28,435 $— $33,970 $— $32,463 $— 
Liabilities      
       
Fixed rate debt (b)$5,168
 $—
 $5,418
 $—
 $5,588
 $—
 $5,892
 $—
Floating rate debt (b)4,442
 —
 4,488
 —
 3,658
 —
 3,697
 —
Total$9,610
 $—
 $9,906
 $—
 $9,246
 $—
 $9,589
 $—
 
(a)Long-term other assets are comprised of notes receivable. The fair values of our Level 2 notes receivable were based on estimated future cash flows discounted at appropriate market interest rates. The fair values of our Level 3 notes receivable were estimated using risk-adjusted discount rates.
(b)The debt amounts above do not include the impact of interest rate swaps or debt issuance costs. The fair values of our publicly-traded notes were based on their unadjusted quoted market prices in markets that are not sufficiently active to be Level 1 and, accordingly, are considered Level 2. The fair values of our other debt were estimated based on current market interest rates being applied to this debt.

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


Financial Instruments that are Measured at Fair Value on a Recurring Basis
 August 31, 2022November 30, 2021
(in millions)Level 1Level 2Level 3Level 1Level 2Level 3
Assets
Cash and cash equivalents$7,071 $— $— $8,939 $— $— 
Short-term investments (a)— — — 200 — — 
Derivative financial instruments— — — — 1 — 
Total$7,071 $— $— $9,139 $1 $— 
Liabilities
Derivative financial instruments$— $1 $— $— $13 $— 
Total$— $1 $— $— $13 $— 

(a)Short term investments consist of marketable securities with original maturities of between three and twelve months.
18
 February 28, 2018 November 30, 2017
(in millions)Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Assets           
Cash and cash equivalents$453
 $—
 $—
 $395
 $—
 $—
Restricted cash29
 —
 —
 26
 —
 —
Marketable securities held in rabbi trusts (a)6
 —
 —
 97
 —
 —
Derivative financial instruments—
 17
 —
 —
 15
 —
Total$488
 $17
 $—
 $518
 $15
 $—
Liabilities           
Derivative financial instruments$—
 $130
 $—
 $—
 $161
 $—
Total$—
 $130
 $—
 $—
 $161
 $—
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(a)The use of marketable securities held in rabbi trusts is restricted to funding certain deferred compensation and non-qualified U.S. pension plans.
Nonfinancial Instruments that are Measured at Fair Value on a Nonrecurring Basis
Valuation of Goodwill and Other IntangiblesTrademarks 

 Goodwill
(in millions)NAA (a)
Segment		 EA (b)
Segment		 Total
At November 30, 2017$1,898
 $1,069
 $2,967
Foreign currency translation adjustment—
 47
 47
At February 28, 2018$1,898
 $1,115
 $3,014
 (a)North America & Australia (“NAA”)
 (b)Europe & Asia (“EA”)
 Trademarks
(in millions)NAA
Segment		 EA
Segment		 Total
At November 30, 2017$927
 $252
 $1,179
Foreign currency translation adjustment—
 11
 11
At February 28, 2018$927
 $263
 $1,190

The determinationAs of July 31, 2022, we performed our reporting unitannual goodwill and trademark fairimpairment reviews and determined there was no impairment for goodwill or trademarks.

As of August 31, 2022 and November 30, 2021, goodwill for our North America and Australia (“NAA”) segment was $579 million. We had no goodwill for our Europe and Asia (“EA”) segment as of August 31, 2022 and November 30, 2021.

Trademarks
(in millions)NAA
Segment		EA
Segment		Total
November 30, 2021$927 $248 $1,175 
Exchange movements— (30)(30)
August 31, 2022$927 $218 $1,145 

Impairment of Ships

We review our long-lived assets for impairment whenever events or circumstances indicate potential impairment. As a result of the continued effects of COVID-19 on our business, and our updated expectations of the estimated selling values includes numerous assumptionsfor certain of our ships, we determined that are subjecta ship, which we subsequently sold, had a net carrying value that exceeded its estimated discounted future cash flows as of February 28, 2022. We compared the estimated selling value to various risksthe net carrying value and, uncertainties.as a result, recognized ship impairment charges as summarized in the table below during the first quarter of 2022. The principal assumption used in our cash flow analyses was the timing of the sale and its proceeds, which is considered a Level 3 input. We believe that we have made reasonable estimates and judgments.judgments as part of our assessment. A change in the conditions, circumstances or strategy,principal assumptions, including those regarding ship deployment given Costa Cruises’ Asia markets, particularly China, remain closed to cruising, may result in a need to perform additional impairment reviews and a need to recognize anadditional impairment charge.charges.



The impairment charges summarized in the table below are included in ship and other impairments in our Consolidated Statements of Income (Loss).

Three Months Ended August 31,Nine Months Ended
August 31,
(in millions)2022202120222021
NAA Segment$— $273 $8 $273 
EA Segment— 202 — 251 
Total ship impairments$— $475 $8 $524 

Refer to Note 1 - “General, Use of Estimates and Risks and Uncertainty” for additional discussion.

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Derivative Instruments and Hedging Activities

(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
 $161
(in millions)Balance Sheet LocationAugust 31, 2022November 30, 2021
Derivative assets
Derivatives designated as hedging instruments
Cross currency swaps (a)Prepaid expenses and other$— $1 
Total derivative assets$— $1 
Derivative liabilities
Derivatives designated as hedging instruments
Cross currency swaps (a)Other long-term liabilities$— $8 
Interest rate swaps (b)Accrued liabilities and other1 3 
Other long-term liabilities— 2 
Total derivative liabilities$1 $13 
 
(a)At February 28, 2018 and November 30, 2017, we had foreign currency swaps totaling $337 million and $324 million, respectively, that are designated as hedges of our net investments in foreign operations with a euro-denominated functional currency. At February 28, 2018, these foreign currency swaps settle through September 2019.
(b)At February 28, 2018 and November 30, 2017, we had foreign currency derivatives consisting of foreign currency zero cost collars that are designated as foreign currency cash flow hedges for a portion of our euro-denominated shipbuilding payments. See “Newbuild Currency Risks” below for additional information regarding these derivatives.
(c)We have euro interest rate swaps designated as cash flow hedges whereby we receive floating interest rate payments in exchange for making fixed interest rate payments. These interest rate swap agreements effectively changed $485 million at February 28, 2018 and $479 million at November 30, 2017 of EURIBOR-based floating rate euro debt to fixed rate euro debt. At February 28, 2018, these interest rate swaps settle through March 2025.
(d)At February 28, 2018 and November 30, 2017, we had fuel derivatives consisting of zero cost collars on Brent crude oil (“Brent”) to cover a portion of our estimated fuel consumption through 2018. See “Fuel Price Risks” below for additional information regarding these derivatives.

(a)At August 31, 2022, we had no cross-currency swaps. At November 30, 2021, we had a cross currency swap totaling $201 million that was designated as a hedge of our net investment in foreign operations with a euro-denominated functional currency.
(b)We have 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 $108 million at August 31, 2022 and $160 million at November 30, 2021 of EURIBOR-based floating rate euro debt to fixed rate euro debt. At August 31, 2022, these interest rate swaps settle through 2025.

Our derivative contracts include rights of offset with our counterparties. We have elected to net certain of our derivative assets and liabilities within counterparties.counterparties, when applicable.

August 31, 2022
(in millions)Gross AmountsGross Amounts Offset in the Balance SheetTotal Net Amounts Presented in the Balance SheetGross Amounts not Offset in the Balance SheetNet Amounts
Assets$— $— $— $— $— 
Liabilities$1 $— $1 $— $1 
November 30, 2021
(in millions)Gross AmountsGross Amounts Offset in the Balance SheetTotal Net Amounts Presented in the Balance SheetGross Amounts not Offset in the Balance SheetNet Amounts
Assets$1 $— $1 $— $1 
Liabilities$13 $— $13 $— $13 

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

The effective gain (loss) portionseffect of our derivatives qualifying and designated as hedging instruments recognized in other comprehensive income were(loss) and in net income (loss) was as follows:
 Three Months Ended August 31,Nine Months Ended
August 31,
(in millions)2022202120222021
Gains (losses) recognized in AOCI:
Cross currency swaps – net investment hedges - included component$40 $— $72 $— 
Cross currency swaps – net investment hedges - excluded component$(7)$— $(26)$— 
Interest rate swaps - cash flow hedges$1 $1 $10 $3 
Gains (losses) reclassified from AOCI - cash flow hedges:
Interest rate swaps - Interest expense, net of capitalized interest$— $(1)$(1)$(4)
Foreign currency zero cost collars - Depreciation and amortization$1 $1 $2 $1 
Gains (losses) recognized on derivative instruments (amount excluded from effectiveness testing – net investment hedges)
Cross currency swaps – Interest expense, net of capitalized interest$2 $— $5 $— 
 Three Months Ended
February 28,
(in millions)2018 2017
Net investment hedges$(6) $1
Foreign currency zero cost collars – cash flow hedges$1
 $8
Interest rate swaps – cash flow hedges$4
 $2
There are no credit risk related contingent features in our derivative agreements, except for bilateral credit provisions within our fuel derivative counterparty agreements. These provisions require cash collateral to be posted or received to the extent the fuel derivative fair value payable to or receivable from an individual counterparty exceeds $100 million. At February 28, 2018 and November 30, 2017, no collateral was required to be posted to or received from our fuel derivative counterparties.
The amount of estimated cash flow hedges’ unrealized gains and losses that are expected to be reclassified to earnings in the next twelve months is 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 ship maintenance practices, modifying our 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.implementing innovative technologies.
Our zero cost collars are based on Brent prices whereas the actual fuel used on our ships is marine fuel. Changes in the Brent prices may not show a high degree of correlation with changes in our underlying marine fuel prices. We will not realize any economic gain or loss upon the monthly maturities of our zero cost collars unless the average monthly price of Brent is above the ceiling price or below the floor price. We believe that these zero cost collars will act as economic hedges; however, hedge accounting is not applied.
 Three Months Ended
February 28,
(in millions)2018
2017
Unrealized gains on fuel derivatives, net$32

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

Foreign Currency Exchange Rate Risks
Overall Strategy
We manage our exposure to fluctuations in foreign currency exchange rates through our normal operating and financing activities, including netting certain exposures to take advantage of any natural offsets and, when considered appropriate, through the use of derivative and non-derivative financial instruments. Our primary focus is to monitor our exposure to, and manage, the economic foreign currency exchange risks faced by our operations and realized if we exchange one currency for another. We currently only hedgeconsider hedging certain of our ship commitments and net investments in foreign operations. The financial impacts of theour hedging instruments we do employ generally offset the changes in the underlying exposures being hedged.
Operational Currency Risks
Our operations primarily utilize the U.S. dollar, Euro, Sterling or the Australian dollar euro or sterling as their functional currencies. Our operations also have revenue and expenses denominated in non-functional currencies. Movements in foreign currency exchange rates will affect our financial statements.
Investment Currency Risks
We consider our investments in foreign operations to be denominated in stable currencies. Our investments in foreign operations arecurrencies and of a long-term nature. We partially mitigate the currency exposure of our investments in foreign operations by designating a portion of our foreign currency debt and derivatives as hedges of these investments. As of August 31, 2022, we have $5.6 billion and $924designated $410 million of euro- andour sterling-denominated debt respectively, includingas non-derivative hedges of our net investments in foreign operations. For the effectthree and nine months ended August 31, 2022, we recognized $32 million and $57 million of foreign currency swaps,gains on these non-derivative net investment hedges in the cumulative translation adjustment section of other comprehensive income (loss). We also have euro-denominated debt, 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 of our foreign currency intercompany payables in our foreign operations’ functional currencies. 
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
21
Table 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.Contents
 Entered Into Matures in Weighted-Average Floor Rate Weighted- Average Ceiling Rate
Carnival Horizon2016 March 2018 $1.02
 $1.25
Seabourn Ovation2016 April 2018 $1.02
 $1.25
Nieuw Statendam2016 November 2018 $1.05
 $1.25
If the spot rate is between the ceiling and floor rates on the date of maturity, then we would not owe or receive any payments under these collars.
At February 28, 2018,August 31, 2022, our remaining newbuild currency exchange rate risk primarily relates to euro-denominated newbuild contract payments to non-euro functional currency brands, which represent a total unhedged commitment of $8.2$5.2 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’ 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 equivalents, investments, committednotes receivables, reserve funds related to customer deposits, future financing facilities, contingent obligations, derivative instruments, insurance contracts, long-term ship charters 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,August 31, 2022, our exposures under foreign currency and fuel derivative contracts and interest rate swap agreementsinstruments 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. Concentrations of credit risk associated with 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. Normally, we have not required collateral or other security to support normal credit sales. Historically, we have not experienced significant credit losses, including counterparty nonperformance; however, because of the impact COVID-19 is having on economies, we have experienced, and may continue to experience, an increase in credit losses.

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, 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. We have not experienced significant credit losses on our trade receivables, charter-hire agreements and contingent obligations. We do not normally require collateral or other security to support normal credit sales.

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 AsiaEA cruise operations, (“EA”), (3) Cruise Support and (4) Tour and Other.


The operating segments within each of our NAA and EA 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.

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Three Months Ended August 31,
(in millions)(in millions)RevenuesOperating costs and
expenses		Selling
and
administrative		Depreciation
and
amortization		Operating
income (loss)
20222022
NAANAA$2,880 $2,280 $368 $358 $(126)
EAEA1,266 983 173 172 (62)
Cruise SupportCruise Support41 21 78 36 (94)
Tour and OtherTour and Other118 94 6 15 3 
$4,305 $3,379 $625 $581 $(279)
20212021
NAANAA$271 $966 $219 $343 $(1,257)
EAEA232 610 139 180 (696)
Cruise SupportCruise Support14 13 61 34 (94)
Tour and OtherTour and Other28 27 6 6 (10)
$546 $1,616 $425 $562 $(2,057)
Three Months Ended February 28,Nine Months Ended August 31,
(in millions)Revenues Operating costs and
expenses		 Selling
and
administrative		 Depreciation
and
amortization		 Operating
income (loss)		(in millions)RevenuesOperating costs and
expenses		Selling
and
administrative		Depreciation
and
amortization		Operating
income (loss)
2018         
20222022
NAA$2,684
 $1,658
 $367
 $299
 $360
NAA$5,672 $5,335 $1,078 $1,046 $(1,787)
EA1,503
 1,005
 188
 157
 154
EA2,389 2,529 524 531 (1,196)
Cruise Support32
 33
 55
 23
 (78)Cruise Support114 76 154 104 (220)
Tour and Other13
 14
 6
 10
 (17)Tour and Other154 151 17 26 (40)
Intersegment elimination—
 —
 —
 —
 —
$4,232
 $2,709
 $616
 $488
 $419
$8,329 $8,092 $1,774 $1,707 $(3,244)
2017         
20212021
NAA$2,517
 $1,557
 $333
 $289
 $338
NAA$291 $1,647 $672 $1,018 $(3,046)
EA1,226
 859
 159
 130
 78
EA274 1,106 378 550 (1,760)
Cruise Support39
 6
 55
 11
 (33)Cruise Support15 28 232 95 (341)
Tour and Other9
 13
 2
 9
 (15)Tour and Other42 51 23 18 (49)
Intersegment elimination—
 —
 —
 —
 —
$3,791
 $2,435
 $549
 $439
 $368
$621 $2,832 $1,305 $1,681 $(5,196)


A portionRevenue by geographic areas, which are based on where our guests are sourced, were as follows:
(in millions)Three Months Ended August 31, 2022Nine Months Ended August 31, 2022
North America$2,753 $5,491 
Europe1,456 2,676 
Australia and Asia74 97 
Other22 64 
$4,305 $8,329 

As a result of the NAA segment’s revenues includes revenuespause in our guest cruise operations, revenue data for the tour portion of a cruise when a cruisethree and land tour package are sold together by Holland America Line and Princess Cruises. These intersegment tour revenues, which are alsonine months ended August 31, 2021 is not included in our Tour and Other segment, are eliminated by the NAA segment’s revenues and operating expenses in the line “Intersegment elimination.”table.


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NOTE 67 – Earnings Per Share
 Three Months Ended
August 31,		Nine Months Ended
August 31,
(in millions, except per share data)2022202120222021
Net income (loss) for basic and diluted earnings per share$(770)$(2,836)$(4,495)$(6,881)
Weighted-average shares outstanding1,185 1,133 1,154 1,120 
Dilutive effect of equity plans— — — — 
Diluted weighted-average shares outstanding1,185 1,133 1,154 1,120 
Basic earnings per share$(0.65)$(2.50)$(3.89)$(6.14)
Diluted earnings per share$(0.65)$(2.50)$(3.89)$(6.14)
 Three Months Ended
February 28,
(in millions, except per share data)2018 2017
Net income for basic and diluted earnings per share$391
 $352
Weighted-average shares outstanding717
 725
Dilutive effect of equity plans2
 3
Diluted weighted-average shares outstanding719
 728
Basic earnings per share$0.54
 $0.48
Diluted earnings per share$0.54
 $0.48


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

Three Months Ended
August 31,		Nine Months Ended
August 31,
(in millions)2022202120222021
Equity awards— 3 1 3 
Convertible Notes52 54 52 54 
Total antidilutive securities52 56 54 57 

NOTE 78 – Supplemental Cash Flow Information

(in millions)August 31, 2022November 30, 2021
Cash and cash equivalents (Consolidated Balance Sheets)$7,071 $8,939 
Restricted cash included in prepaid expenses and other and other assets35 38 
Total cash, cash equivalents and restricted cash (Consolidated Statements of Cash Flows)$7,107 $8,976 

For the nine months ended August 31, 2022 and 2021, we did not have borrowings or repayments of commercial paper with original maturities greater than three months.

NOTE 9 – Property and Equipment

Ship Sales

During 2022, we sold one NAA segment ship and one EA segment ship and entered into an agreement to sell one NAA segment ship, which collectively represents a passenger-capacity reduction of 4,110 for our NAA segment and 1,410 for our EA segment.

Refer to Note 5 - “Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks, Nonfinancial Instruments that are Measured at Fair Value on a Nonrecurring Basis, Impairment of Ships” for additional discussion.

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NOTE 10 – 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, 2022, there were no sales or repurchases under the Stock Swap Program. During the nine months ended August 31, 2022, we sold 5.2 million of Carnival Corporation common stock and repurchased 3.0 million sharesthe same amount of Carnival plc ordinary shares, resulting in net proceeds of $8 million, which were used for general corporate purposes. During the three and 0.2nine months ended August 31, 2021, under the Stock Swap Program, we sold 4.6 million shares of Carnival Corporation common stock and repurchased the same amount of Carnival plc ordinary shares resulting in net proceeds of $10 million, which were used for $204general corporate purposes.

Outside of public equity offerings, during the three months ended August 31, 2022, there were no sales of Carnival Corporation common stock. In addition, outside of public equity offerings, during the nine months ended August 31, 2022, we sold 1.6 million and $12 million, respectively, under our general authorization to repurchaseshares of Carnival Corporation common stock and/or Carnival plc ordinary shares (the “Repurchase Program”). At February 28, 2018, the remaining availability under the Repurchase Program was $370at an average price per share of $19.27, resulting in net proceeds of $30 million.

Public Equity Offerings

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

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


Cautionary Note Concerning Factors That May Affect Future Results


Some of the statements, estimates or projections contained in this document are “forward-looking statements” that involve risks, uncertainties and assumptions with respect to us, including some statements concerning future results, operations, outlooks, plans, goals, reputation, cash flows, liquidity and other events which have not yet occurred. These statements are intended to qualify for the safe harbors from liability provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.1934, as amended. All statements other than statements of historical facts are statements that could be deemed forward-looking. These statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and the beliefs and assumptions of our management. We have tried, whenever possible, to identify these statements by using words like “will,” “may,” “could,” “should,” “would,” “believe,” “depends,” “expect,” “goal,” “aspiration,” “anticipate,” “forecast,” “project,” “future,” “intend,” “plan,” “estimate,” “target,” “indicate,” “outlook”“outlook,” and similar expressions of future intent or the negative of such terms.


Forward-looking statements include those statements that relate to our outlook and financial position including, but not limited to, statements regarding:
•    Net revenue yieldsPricing
•    Net cruise costs, excluding fuel per available lower berth dayGoodwill, ship and trademark fair values
•Booking levels
•Liquidity and credit ratings
•Occupancy
•Adjusted earnings per share
•Interest, tax and fuel expenses
•Return to guest cruise operations
•Currency exchange rates
•Impact of the COVID-19 coronavirus global pandemic on our financial condition and results of operations
•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 share
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 COVID-19. It is not possible to predict or identify all such risks. There may be additional risks that we consider immaterial or which are unknown. These factors include, but are not limited to, the following:

•COVID-19 has had, and is expected to continue to have, a significant impact on our financial condition and operations. The current, and uncertain future, impact of COVID-19, including its effect on the ability or desire of people to travel (including on cruises), is expected to continue to impact our results, operations, outlooks, plans, goals, reputation, litigation, cash flows, liquidity, and stock price.
The demand for cruises may decline due to adverse•Events and conditions around the world, eventsincluding war and other military actions, such as the current invasion of Ukraine, inflation, higher fuel prices, 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, impacting our operating costs and profitability.
•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, 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 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 employees, our inability to recruit develop andor retain qualified shoreside and shipboard personnel who liveemployees 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.
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•We rely on supply chain vendors who are integral to the operations of our businesses. These vendors and service providers are also affected by COVID-19 and may be unable to deliver on their commitments which could 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
Continuing financial viability of our travel agent distribution system, air service providers and other key vendors may lead to a decline in our supply chain, as well as reductions in the availability of,cruise sales, pricing and increases in the prices for, the services and products provided by these vendorsdestination options.
•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 may be slow to developoperations and ultimately not develop how we expectthe satisfaction of our guests.


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-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.


New Accounting Pronouncements


Refer to ourNote 1 - “General, Accounting Pronouncements” of the consolidated financial statements for further information on Accounting Pronouncements.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, demand 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 seasonalityThis historical trend was disrupted in 2020 by the pause and in 2021 by the ongoing resumption of our results also increases due to ships being taken out-of-service for maintenance, which we schedule during non-peak demand periods.guest cruise operations. 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 increased cost of fuel, liquefied natural gas and other related costs are reasonably likely to continue to impact our profitability in both the short and long-term.
•We expect inflation, higher interest rates and supply chain challenges to continue to weigh on our costs, and they are reasonably likely to continue to impact our profitability.
•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 materially impact our future costs, capital expenditures and revenues and/or the relationship between them. The full impact of climate change to our business is not yet known.
•In addition, we are experiencing some challenges with onboard staffing which have resulted in occupancy constraints on certain voyages and are reasonably likely to impact our profitability in the short-term.
•We expect a net loss for the fourth quarter of 2022 and continue to expect a net loss for the full year 2022.
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Statistical Information
Three Months Ended
August 31,		Nine Months Ended
August 31,
2022202120222021
Passenger Cruise Days (“PCDs”) (in thousands) (a)17,700 2,053 36,363 2,219 
Available Lower Berth Days (“ALBDs”) (in thousands) (b)21,015 3,788 51,004 4,405 
Occupancy percentage (c)84 %54 %71 %50 %
Passengers carried (in thousands)2,571 340 5,233 372 
Fuel consumption in metric tons (in thousands)701 344 1,899 852 
Fuel consumption in metric tons per thousand ALBDs33 (d)37 (d)
Fuel cost per metric ton consumed$958 $537 $836 $472 
Currencies (USD to 1)
AUD$0.70 $0.75 $0.71 $0.76 
CAD$0.78 $0.80 $0.78 $0.80 
EUR$1.03 $1.19 $1.08 $1.20 
GBP$1.21 $1.39 $1.28 $1.38 

The resumption of guest cruise operations has impacted the comparability of all aspects of our business.

Notes to Statistical Information

(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 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.

(d)Fuel consumption in metric tons per thousand ALBDs for 2021 is not meaningful.


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 Three Months Ended
February 28,
 2018 2017
Available Lower Berth Days ("ALBDs") (in thousands) (a) (b)20,462
 20,024
Occupancy percentage (c)104.7% 104.6%
Passengers carried (in thousands)2,860
 2,769
Fuel consumption in metric tons (in thousands)821
 818
Fuel consumption in metric tons per thousand ALBDs40.1
 40.9
Fuel cost per metric ton consumed$437
 $362
Currencies (USD to 1)   
AUD$0.78
 $0.75
CAD$0.79
 $0.76
EUR$1.21
 $1.06
GBP$1.37
 $1.24
RMB$0.15
 $0.15
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(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.

Results of Operations
Consolidated
Three Months Ended August 31,Nine Months Ended
August 31,
(in millions)20222021Change20222021Change
Revenues
    Passenger ticket$2,595 $303 $2,292 $4,753 $326 $4,426 
    Onboard and other1,711 243 1,468 3,577 295 3,282 
4,305 546 3,760 8,329 621 7,708 
Operating Costs and Expenses
    Commissions, transportation and other565 79 486 1,141 116 1,025 
    Onboard and other537 72 465 1,060 94 966 
    Payroll and related563 375 188 1,601 834 767 
    Fuel668 182 486 1,577 398 1,179 
    Food259 52 208 586 80 506 
    Ship and other impairments— 475 (475)8 524 (517)
    Other operating787 381 406 2,118 786 1,332 
3,379 1,616 1,763 8,092 2,832 5,260 
    Selling and administrative625 425 199 1,774 1,305 469 
    Depreciation and amortization581 562 19 1,707 1,681 26 
4,585 2,603 1,982 11,573 5,817 5,756 
Operating Income (Loss)(279)(2,057)1,778 (3,244)(5,196)1,952 
Nonoperating Income (Expense)
Interest income24 3 22 34 10 24 
Interest expense, net of capitalized interest(422)(418)(5)(1,161)(1,253)92 
Gains (losses) on debt extinguishment, net— (376)376 — (372)372 
Other income (expense), net(81)(11)(70)(108)(87)(21)
(479)(802)323 (1,235)(1,702)467 
Income (Loss) Before Income Taxes$(759)$(2,859)$2,101 $(4,478)$(6,898)$2,420 

NAA
Three Months Ended August 31,Nine Months Ended
August 31,
(in millions)20222021Change20222021Change
Revenues
    Passenger ticket$1,716 $151 $1,565 $3,163 $152 $3,011 
    Onboard and other1,164 121 1,044 2,509 139 2,370 
2,880 271 2,609 5,672 291 5,382 
Operating Costs and Expenses2,280 966 1,314 5,335 1,647 3,689 
Selling and administrative368 219 149 1,078 672 406 
Depreciation and amortization358 343 16 1,046 1,018 28 
3,007 1,528 1,479 7,460 3,337 4,123 
Operating Income (Loss)$(126)$(1,257)$1,130 $(1,787)$(3,046)$1,259 
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EA
Three Months Ended August 31,Nine Months Ended
August 31,
(in millions)20222021Change20222021Change
Revenues
    Passenger ticket$972 $164 $808 $1,804 $186 $1,619 
    Onboard and other294 69 225 585 88 497 
1,266 232 1,034 2,389 274 2,115 
Operating Costs and Expenses983 610 374 2,529 1,106 1,423 
Selling and administrative173 139 34 524 378 146 
Depreciation and amortization172 180 (8)531 550 (19)
1,328 929 399 3,585 2,034 1,551 
Operating Income (Loss)$(62)$(696)$634 $(1,196)$(1,760)$564 

We paused our guest cruise operations in March 2020. We began our resumption of guest cruise operations in 2021 and continued into 2022. As of August 31, 2022,93% of our capacity was serving guests, compared to 35% as of August 31, 2021. Our NAA segment had 95% of its capacity increase was caused by:
Full quarter impact from one Princess Cruises 3,560-passengerserving guests as of August 31, 2022, compared to 31% as of August 31, 2021. Our EA segment had 92% of its capacity ship that entered into service in April 2017
Partially offsetserving guests as of August 31, 2022, compared to 43% as of August 31, 2021. We expect eight of our nine brands will have their entire fleet serving guests by the end of the fourth quarter of 2022. Given Costa Cruises’ significant presence in Asia, particularly China, which remains closed to cruising, the brand continues to evaluate deployment options and fleet optimization alternatives beyond the previously announced transfers of Costa Luminosa to Carnival Cruise Line as well as Costa Venezia and Costa Firenze to the COSTA® by CARNIVAL® concept.

The effects of the COVID-19 global pandemic, inflation, higher fuel prices and higher interest rates are collectively having a material negative impact on all aspects of our business, including our results of operations, liquidity and financial position.The full quarter impact by one P&O Cruises (Australia) 1,550-passenger capacity ship removed from the service in April 2017extent of these impacts are uncertain.

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


(c)In accordance with cruise industry practice, occupancy is calculated using a denominator of ALBDs, which assumes two passengers per cabin even though some cabins can accommodate three or more passengers. Percentages in excess of 100% indicate that on average more than two passengers occupied some cabins.


Three Months Ended February 28, 2018August 31, 2022 (“2018”2022”) Compared to Three Months Ended February 28, 2017August 31, 2021 (“2017”2021”)


Revenues


Consolidated


Cruise passenger ticket revenues made up 74%60% 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 in2022 while onboard and other revenues made up 40%. Revenues in 2022 increased by $21 million, or 9.1%,$3.8 billion as compared to $2472021 due to the resumption of guest cruise operations and the significant increase of ships in service. ALBDs increased to 21.0 million in 2018 from $2272022 as compared to 3.8 million in 2017.2021. Occupancy in 2022 was 84% compared to 54% in 2021.


NAA Segment


Cruise passenger ticket revenues made up 71%60% 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 2022 while onboard and other cruise revenues which made up 40%. NAA segment revenues in 2022increased by $50 million, or 6.9%,$2.6 billion as compared to $7672021 due to the resumption of guest cruise operations and the significant increase of ships in service. ALBDs increased to 12.6 million in 2018 from $7182022 as compared to 1.4 million in 2017.2021. Occupancy in 2022 was 92% compared to 68% in 2021.

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.


EA Segment


Cruise passenger ticket revenues made up 82%77% of our EA 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 2022while onboard and other cruise revenues whichmade up 23%. EA segment revenues in 2022 increased by $45 million, or 21%,$1.0 billion as compared to 2021 due to the resumption of guest cruise operations and were $265the significant increase of ships in service. ALBDs increased to 8.5 million in 2018 and $2202022 as compared to 2.4 million in 2017. This increase2021. Occupancy in 2022 was driven by the foreign currency translational impact, which accounted for $31 million.73% compared to 47% in 2021.


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.

Operating Costs and Expenses


Consolidated


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Operating costs and expenses increased by $275 million, or 11%,$1.8 billion to $2.7$3.4 billion in 20182022 from $2.4$1.6 billion in 2017.2021. These increases were driven by our resumption of guest cruise operations and restart related expenses, including the cost of returning ships to guest cruise operations and returning crew members to our ships, the cost of maintaining enhanced health and safety protocols, inflation and supply chain disruptions. We anticipate that many of these costs and expenses will end in 2022.


Fuel costs increased by $486 million to $668 million in 2022 from $182 million in 2021. This increase was driven by:
$108 million - foreign currency translational impact
$61 million -caused by higher fuel prices
$53 million - 2.2% capacityconsumption of 357 thousand metric tons, due to the resumption of guest cruise operations, and an increase in ALBDsfuel prices of $421 per metric ton consumed in 2022 compared to 2021.
$39
There were no ship impairment charges recognized in 2022 and $475 million - higher commissions, transportation and otherof ship impairment charges recognized in 2021.


Selling and administrative expenses increased by $67$199 million or 12%, to $616$625 million in 20182022 from $549$425 million in 2017.

This increase was driven by:
$25 million - higher administrative expenses
$22 million - foreign currency translational impact
$12 million - 2.2% capacity increase in ALBDs

Depreciation and amortization expenses increased by $49 million, or 11%, to $488 million in 2018 from $439 million in 2017.

2021.This increase was caused by:by higher administrative expenses and increased advertising and promotional spend incurred as part of our resumption of guest cruise operations.
$21
The drivers in changes in costs and expenses for our NAA and EA segments are the same as those described for our consolidated results.

Nonoperating Income (Expense)

Gains (losses) on debt extinguishment, net decreased to $0 million - fleet enhancementsin 2022 from $376 million in 2021.

Nine Months Ended August 31, 2022 (“2022”) Compared to Nine Months Ended August 31, 2021 (“2021”)

Revenues

Consolidated

Cruise passenger ticket revenues made up 57% of our total revenues in 2022 while onboard and investmentsother revenues made up 43%. Revenues in shoreside assets2022 increased by $7.7 billion as compared to 2021 due to the resumption of guest cruise operations and the significant increase of ships in service. ALBDs increased to 51.0 million in 2022 as compared to 4.4 million in 2021. Occupancy in 2022 was 71% compared to 50% in 2021.
$19 million - foreign currency translational impact
$10 million - 2.2% capacity increase in ALBDs


NAA Segment


Cruise passenger ticket revenues made up 56% of our NAA segment’s total revenues in 2022 while onboard and other cruise revenues made up 44%. NAA segment revenues in 2022 increased by $5.4 billion as compared to 2021 due to the resumption of guest cruise operations and the significant increase of ships in service. ALBDs increased to 31.4 million in 2022 as compared to 1.4 million in 2021. Occupancy in 2022 was 78% compared to 68% in 2021.

EA Segment

Cruise passenger ticket revenues made up 76% of our EA segment’s total revenues in 2022 while onboard and other cruise revenues made up 24%. EA segment revenues in 2022increased by $2.1 billion as compared to 2021 due to the resumption of guest cruise operations and the significant increase of ships in service. ALBDs increased to 19.6 million in 2022 as compared to 3.0 million in 2021. Occupancy in 2022 was 60% compared to 43% in 2021.

Operating Costs and Expenses

Consolidated

Operating costs and expenses increased by $101 million, or 6.5%,$5.3 billion to $1.7$8.1 billion in 20182022 from $2.8 billion in 2021. These increases were driven by our resumption of guest cruise operations and restart related expenses, including the cost of returning ships to guest cruise operations and returning crew members to our ships, higher number of dry-dock days, the cost of maintaining enhanced health and safety protocols, inflation and supply chain disruptions.We anticipate that many of these costs and expenses will end in 2022.

Fuel costs increased by $1.2 billion to $1.6 billion in 2017.

This2022 from $0.4 billion in 2021. The increase was caused by:
$42 million -by higher fuel prices
$22consumption of 1.0 million - 1.4% capacitymetric tons, due to the resumption of guest cruise operations, and an increase in ALBDsfuel prices of $364 per metric ton consumed in 2022 compared to 2021.
$15
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We recognized a ship impairment charge of $8 million - higher commissions, transportationin 2022 and othership impairment charges of $524 million in 2021.
$13 million - higher cruise payroll and related expenses
$12 million - higher port expenses

Selling and administrative expenses increased by $34 million, or 10%,$0.5 billion to $367 million$1.8 billion for 2022 from $1.3 billion in 2018 from $333 million in 2017.

This2021. The increase was driven by:
$15 million -caused by higher administrative expenses and increased advertising and promotion expensespromotional spend incurred as part of our resumption of guest cruise operations.
$14 million - higher administrative expenses

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 EA segments are the same as those described for our consolidated results.

This increase was caused by:
$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 usecapitalized interest, decreased by $0.1 billion to monitor our ability to control our cruise segments’ costs rather than gross cruise costs per ALBD. We exclude the same variable costs that are included in the calculation of net cruise revenues as well as fuel expense to calculate net cruise costs without fuel to avoid duplicating these variable costs in our non-GAAP financial measures. Substantially all of our net cruise costs excluding fuel are largely fixed, except for the impact of changing prices, once the number of ALBDs has been determined.

Reconciliation of Forecasted Data

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

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

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



Examples:

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

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

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


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

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


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

Net cruise revenues increased by $328 million, or 11%, to $3.4$1.2 billion in 20182022 from $3.1$1.3 billion in 2017.
2021. The increase was caused by:
$136 million - foreign currency impacts (including both the foreign currency translational 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 yieldsdecrease was caused by similar increasesa lower average interest rate as a result of completed refinancing efforts and was partially offset by a higher average debt balance in our NAA and EA segments.2022 compared to 2021.
Gross cruise revenues increased by $437
Gains (losses) on debt extinguishment, net decreased to $0 million or 12%, to $4.2 billion in 20182022 from $3.8 billion in 2017 for largely the same reasons as discussed above.
Net cruise 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 $359$372 million in 2018 from $297 million in 2017. This increase was driven by higher fuel prices, which accounted for $61 million.2021.
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 areAs of August 31, 2022, we had $7.4 billion of liquidity including cash and borrowings available under our Revolving Facility.During the remainder of 2022 and 2023 we expect 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 average 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. As we continue to profitably grow our cruise business, we plan to increase our debt leveladdress maturities well in a manner consistent with maintaining our strong credit metrics. This will allow us to return both free cash flowadvance and incremental debt proceeds to our shareholders in the form of dividends and/obtain relevant financial covenant amendments or share repurchases. Other objectives of our capital structure policy are to maintain a sufficient level of liquidity with our available cash and cash equivalents and committed financings for immediate and future liquidity needs, and a reasonable debt maturity profile.waivers, as 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$4.5 billion as of February 28, 2018 andAugust 31, 2022 compared to working capital deficit of $0.3 billion as of November 30, 2017.2021. The increase in working capital deficit was caused by a decrease in cash and cash equivalents, a decrease in short-term investments, an increase in customer deposits and an increase in 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 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$4.5 billion and $4.0$3.1 billion of customer deposits as of February 28, 2018August 31, 2022 and November 30, 2017,2021, respectively. We have paid refunds of customer deposits with respect to a portion of cancelled cruises. The amount of any future cash refunds may depend on future cruise cancellations and guest rebookings. 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-level of accounts receivable and limited investment in inventories. We generate substantial cash flows from operations

Refer to Note 1 - “General, Liquidity and Management’s Plans” 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 $1.1used $1.6 billion of net cash from operationsflows in operating activities during the threenine months ended February 28, 2018, an increaseAugust 31, 2022, a decrease of $132 million, or 14%,$2.2 billion, compared to $0.9$3.7 billion of net cash flows used for the same period in 2017.2021. This increase was caused by an increasedue to a decrease in our revenues less expenses settled in cashthe net loss and an increase in cash inflows from customer deposits.deposits during the nine months ended August 31, 2022 compared to the same period in 2021 and other working capital changes.


Investing Activities
During the threenine months ended February 28, 2018,August 31, 2022, net cash used in investing activities was $591 million.$3.5 billion. This was caused by:driven by the following:
•Capital expenditures of $97 million$3.0 billion for our ongoing new shipbuilding program
•Capital expenditures of $477$776 million for ship improvements and replacements, information technology and buildings and improvements
Payments•Proceeds from sale of $21ships 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
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During the threenine months ended February 28, 2017,August 31, 2021, net cash used in investing activities was $474 million.$3.5 billion. This was driven by:by the following:
•Capital expenditures of $36 million$2.8 billion for our ongoing new shipbuilding program
•Capital expenditures of $376$332 million for ship improvements and replacements, information technology and buildings and improvements
Payments•Proceeds from sale of $52ships and other of $351 million for fuel derivative settlements
•Purchases of short-term investments of $2.7 billion
•Proceeds from maturity of short-term investments of $2.0 billion

Financing Activities

During the threenine months ended February 28, 2018,August 31, 2022, net cash used inprovided by financing activities of $428 million$3.2 billion was substantially due tocaused by the following:
•Issuances of $3.3 billion of long-term debt
•Repayments of $1.1 billion of long-term debt
•Payments of $116 million related to debt issuance costs
•Net proceedsrepayments of short-term borrowings of $611$114 million in connection with our availability
•Net proceeds of and needs for, cash at various times throughout$1.2 billion from the periodpublic offering of Carnival Corporation common stock
Repayments•Purchases of $963$82 million of long-term debt
IssuancesCarnival plc ordinary shares and issuances of $469 million of long-term debt under a term loan
Payments of cash dividends of $323 million
Purchases of $218$89 million of Carnival Corporation common stock and Carnival plc ordinary shares in open market transactions under our RepurchaseStock Swap Program



During the threenine months ended February 28, 2017,August 31, 2021, net cash used inprovided by financing activities of $615$4.9 billion was caused by the following:
•Issuances of $7.9 billion of long-term debt, including net proceeds of $3.4 billion from the issuance of the 2027 Senior Unsecured Notes, net proceeds of $2.4 billion from the issuance of the 2028 Senior Secured Notes, and net proceeds of $2.1 billion borrowed under export credit facilities to fund ship deliveries
•Repayments of $3.5 billion of long-term debt, including $2.0 billion repurchase of the 2023 Senior Secured Notes
•Premium payments of $286 million was substantially duerelated to the following:repurchase of the 2023 Senior Secured Notes
•Net repaymentsproceeds of short-term borrowings of $289 million in connection with our availability of, and needs for, cash at various times throughout the period$1.0 billion from Carnival Corporation common stock
Payments of cash dividends of $254 million
•Purchases of $69$94 million of Carnival plc ordinary shares in open market transactionsand issuances of $105 million of Carnival Corporation common stock under our RepurchaseStock Swap Program

•Payments of $233 million related to debt issuance costs
Future Commitments and
Funding Sources
Our total annual
As of August 31, 2022, we had $7.4 billion of liquidity including cash and borrowings available under our Revolving Facility. In addition, we had $2.9 billion of undrawn export credit facilities to fund ship deliveries planned through 2024. We plan to use future cash flows from operations to fund our cash requirements including capital expenditures consist of ships under contract for construction and estimated improvements to existing ships and shoreside assets which are currently expected to be:not funded by our export credit facilities.

(in billions) 2018 2019 2020 2021 2022 2023(in billions)202220232024
Total annual capital expenditures $4.7
 $5.3
 $5.5
 $5.1
 $4.3
 $2.5
Future export credit facilities at August 31, 2022Future export credit facilities at August 31, 2022$0.8 $1.6 $0.5 
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, we had liquidity of $14.4 billion. Our liquidity consisted of $157 million of cash and cash equivalents, which excludes $296 million of cash used for current operations, $2.1 billion available for borrowing under our revolvingexport credit facilities net of our outstanding commercial paper borrowings, and $12.1 billion under our committed future financings, which are comprised of ship export credit facilities. These commitments are from numerous large and well-established banks and export credit agencies, which we believe will honor their contractual agreements with us. 

(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 revolving 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, 2022, 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.


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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. 


Operational Currency Risks

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

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

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


Interest Rate Risks


The composition of our debt including the effect of foreign currency swaps and interest rate swaps, was as follows:
February 28, 2018August 31, 2022
Fixed rate2147 %
EUR fixed rate3814 %
Floating rate1125 %
EUR floating rate2013 %
GBP floating rate101 %

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, 2022, that they are effective at 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, 2022 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.


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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 “Other 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 National Marine Sanctuary in the Farallones Islands. NOAA continues to conduct an investigation.estimated maximum combined penalty). 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 below 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 our operations.

Operating Risk Factors

•Events and conditions around the world, including war and other military actions, such as the current invasion of Ukraine, 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, impacting our operating costs and profitability.

We have been, and may continue to be, immaterialimpacted by the public’s concerns regarding the health, safety and security of travel, including government travel advisories and travel restrictions, political instability and civil unrest, terrorist attacks, war and military action, most recently the current invasion of Ukraine, and other general concerns. The current invasion of Ukraine and its resulting impacts, including supply chain disruptions, increased fuel prices and international sanctions and other measures that have been imposed, have adversely affected, and may continue to adversely affect, our business. These factors may also mayhave the effect of heightening many other risks to our business, any of which could materially and adversely affect our business financial conditionand results of operations. Additionally, we have been, and may continue to be, impacted by heightened regulations around customs and border control, travel bans to and from certain geographical areas, voluntary changes to our itineraries in light of geopolitical events, government policies increasing the difficulty of travel and limitations on issuing international travel visas. We have been and may continue to be impacted by inflation, higher fuel prices, higher interest rates and supply chain disruptions and may also be impacted by adverse changes in the perceived or future results.actual economic climate, such as global or regional recessions, higher unemployment and underemployment rates and declines in income levels.


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


A.Repurchase Program

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

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

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

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

B. Stock Swap ProgramsProgram


In addition to the Repurchase Program, weWe have programsa program 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,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.


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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, 2022, 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 14.1 million shares of Carnival Corporation common stock orand repurchased the same amount of Carnival plc ordinary shares, resulting in net proceeds of $27 million. As of August 31, 2022, the maximum number of Carnival plc Ordinary Shares that may yet be purchased under the Stock Swap Program was 4.2 million.

B.    Repurchases

No shares of Carnival Corporation common stock and Carnival plc ordinary shares were soldpurchased outside of publicly announced plans or repurchased under the Stock Swap Programs.programs.


C. Carnival plc Shareholder Approvals
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Carnival plc ordinary share repurchases under both the Repurchase Program and the Stock Swap Programs require annual shareholder approval. The existing shareholder approval is limited to a maximum of 21.6 million ordinary shares and is valid until the earlier of the conclusion of the Carnival plc 2018 annual general meeting or July 4, 2018.

Item 6. Exhibits.Exhibits.
INDEX TO EXHIBITS
Incorporated by ReferenceFiled/
Furnished
Herewith
Exhibit
Number		Exhibit DescriptionFormExhibitFiling
Date
Articles of incorporation and by-laws
3.1   8-K3.14/17/2003
3.2   8-K3.14/20/2009
3.3   8-K3.34/20/2009
Material Contracts
10.18-K4.18/22/2022
10.2X
Rule 13a-14(a)/15d-14(a) certifications
31.1X
31.2X
31.3X
31.4X
Section 1350 certifications
37
INDEX TO EXHIBITS        
           
    Incorporated by Reference 
Filed/
Furnished
Herewith
Exhibit
Number 
 Exhibit Description Form Exhibit 
Filing
Date
 
           
Articles of incorporation and by-laws        
           
3.1 
Third Amended and Restated Articles of Incorporation of Carnival Corporation.
    8-K 3.1 4/17/2003  
3.2 
Third Amended and Restated By-Laws of Carnival Corporation.
    8-K 3.1 4/20/2009  
3.3 
Articles of Association of Carnival plc.
    8-K 3.3 4/20/2009  
         
Material contracts        
10.1 
Form of Management Incentive Plan Tied Restricted Stock Unit Agreement for the Carnival Corporation 2011 Stock Plan.
       X
10.2 
Form of Management Incentive Plan Tied Restricted Share Unit Agreement for the Carnival plc 2014 Employee Share Plan.
       X
10.3 
Form of Performance-Based Restricted Stock Unit Agreement for the Carnival Corporation 2011 Stock Plan.
       X
10.4 
Form of Performance-Based Restricted Share Unit Agreement for the Carnival plc 2014 Employee Share Plan.
       X
           
Statement regarding computations of ratios        
           
 12 
Ratio of Earnings to Fixed Charges.
       X
           
Rule 13a-14(a)/15d-14(a) certifications        
           
 31.1 
Certification of President and Chief Executive Officer of Carnival Corporation pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
       X
 31.2 
Certification of Chief Financial Officer and Chief Accounting Officer of Carnival Corporation pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
       X
 31.3 
Certification of President and Chief Executive Officer of Carnival plc pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
       X
 31.4 
Certification of Chief Financial Officer and Chief Accounting Officer of Carnival plc pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
       X
           
Section 1350 certifications        
           
32.1* 
Certification of President and Chief Executive Officer of Carnival Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
       X
32.2* 
Certification of Chief Financial Officer and Chief Accounting Officer of Carnival Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
       X
32.3* 
Certification of President and Chief Executive Officer of Carnival plc pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
       X
32.4* 
Certification of Chief Financial Officer and Chief Accounting Officer of Carnival plc pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
       X
           

Table of Contents
INDEX TO EXHIBITS
Incorporated by Reference
Filed/

Furnished

Herewith
Exhibit

Number
Exhibit DescriptionFormExhibit
Filing

Date
32.1*X
32.2*X
32.3*X
32.4*X
Interactive Data File
101The consolidated financial statements from Carnival Corporation & plc’s joint Quarterly Report on Form 10-Q for the quarter ended February 28, 2018,August 31, 2022, as filed with the Securities and Exchange Commission on March 22, 2018,September 30, 2022, 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, 2022 and 2017;2021;X
(ii) the Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended February 28, 2018August 31, 2022 and 2017;2021;X
(iii) the Consolidated Balance Sheets at February 28, 2018August 31, 2022 and November 30, 2017;2021;X
(iv) the Consolidated Statements of Cash Flows for the threenine months ended February 28, 2018August 31, 2022 and 2017 and2021;X
(v) the Consolidated Statements of Shareholders’ Equity for the three and nine months ended August 31, 2022 and 2021;X
(vi) the notes to the consolidated financial statements, tagged in summary and detail.X
104The cover page from Carnival Corporation & plc’s joint Quarterly Report on Form 10-Q for the quarter ended August 31, 2022, as filed with the Securities and Exchange Commission on September 30, 2022, formatted in Inline XBRL (included as Exhibit 101).
*
*These items are furnished and not filed.



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SIGNATURES
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SIGNATURES

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

CARNIVAL CORPORATIONCARNIVAL PLC
By:CARNIVAL CORPORATION/s/ Josh WeinsteinBy:CARNIVAL PLC/s/ Josh Weinstein
Josh WeinsteinJosh Weinstein
By:/s/ Arnold W. DonaldBy:/s/ Arnold W. Donald
Arnold W. DonaldArnold W. Donald
President, and Chief Executive OfficerPresident and Chief Climate OfficerPresident, Chief Executive Officer and Chief Climate Officer
By:/s/ David BernsteinBy:/s/ David Bernstein
David BernsteinDavid Bernstein
Chief Financial Officer and Chief Accounting OfficerChief Financial Officer and Chief Accounting Officer
Date: March 22, 2018September 30, 2022Date: March 22, 2018September 30, 2022





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