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 ~~May 31, 2021~~February 28, 2022


☐			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 Commission file number: 001-15136~~

Commission file number: 001-9610

Commission file number: 001-15136

Carnival Corporation

Carnival plc

(Exact name of registrant as
specified in its charter)

Republic of Panama

England and Wales

(State or other jurisdiction of
incorporation or organization)

59-1562976

98-0357772

(I.R.S. Employer Identification No.)

3655 N.W. 87th Avenue

Carnival House, 100 Harbour Parade

Miami,

Florida

33178-2428

Southampton

SO15 1ST

United Kingdom

(Address of principal
executive offices)
(Zip Code)


(305)	599-2600	011	44 23 8065 5000
(Registrant’s telephone number, including area code)		(Registrant’s telephone number, including area code)

None		None
(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 class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock ($0.01 par value)	CCL	New 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 Trust	CUK	New York Stock Exchange, Inc.
1.875% Senior Notes due 2022	CUK22	New York Stock Exchange LLC
1.000% Senior Notes due 2029	CUK29	New 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 every Interactive Data File required to be submitted 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 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

☐

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 ~~June 18, 2021,~~March 21, 2022, Carnival Corporation had outstanding ~~973,824,517~~989,700,876 shares of Common Stock, $0.01 par value.						At ~~June 18, 2021,~~March 21, 2022, Carnival plc had outstanding ~~184,132,549~~185,724,456 Ordinary Shares $1.66 par value, one Special Voting Share, GBP 1.00 par value and ~~973,824,517~~989,700,876 Trust Shares of beneficial interest in the P&O Princess Special Voting Trust.

Table of Contents

CARNIVAL CORPORATION & PLC

TABLE OF CONTENTS

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

CARNIVAL CORPORATION & PLC

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(UNAUDITED)

(in millions, except per share data)


		Three Months Ended May 31,				Six Months Ended May 31,					Three Months Ended February 28,
		2021		2020		2021		2020			2022		2021
Revenues	Revenues									Revenues
Passenger ticket	Passenger ticket	$	20	$	446	$	23	$	3,680	Passenger ticket	$	873	$	3
Onboard and other	Onboard and other	29		294		52		1,849		Onboard and other	750		23
		50		740		75		5,529			1,623		26
Operating Costs and Expenses	Operating Costs and Expenses									Operating Costs and Expenses
Commissions, transportation and other	Commissions, transportation and other	22		297		37		1,064		Commissions, transportation and other	251		15
Onboard and other	Onboard and other	15		114		22		585		Onboard and other	209		7
Payroll and related	Payroll and related	241		705		460		1,315		Payroll and related	506		218
Fuel	Fuel	113		201		216		598		Fuel	365		103
Food	Food	17		108		28		385		Food	136		11
Ship and other impairments	Ship and other impairments	49		589		49		919		Ship and other impairments	8		—
Other operating	Other operating	224		471		404		1,142		Other operating	557		181
		681		2,484		1,216		6,007			2,030		535
Selling and administrative	Selling and administrative	417		492		879		1,170		Selling and administrative	530		462
Depreciation and amortization	Depreciation and amortization	567		577		1,119		1,147		Depreciation and amortization	554		552
Goodwill impairments		0		1,364		0		2,096

		1,665		4,918		3,214		10,420			3,114		1,549
Operating Income (Loss)	Operating Income (Loss)	(1,616)		(4,177)		(3,139)		(4,891)		Operating Income (Loss)	(1,491)		(1,524)
Nonoperating Income (Expense)	Nonoperating Income (Expense)									Nonoperating Income (Expense)
Interest income	Interest income	4		6		7		11		Interest income	3		3
Interest expense, net of capitalized interest	Interest expense, net of capitalized interest	(437)		(182)		(835)		(237)		Interest expense, net of capitalized interest	(368)		(398)

Gains (losses) on debt extinguishment, net										Gains (losses) on debt extinguishment, net	—		2
Other income (expense), net	Other income (expense), net	(11)		(32)		(71)		(39)		Other income (expense), net	(32)		(62)
		(444)		(208)		(900)		(265)			(397)		(455)
Income (Loss) Before Income Taxes	Income (Loss) Before Income Taxes	(2,060)		(4,385)		(4,039)		(5,155)		Income (Loss) Before Income Taxes	(1,888)		(1,979)
Income Tax Benefit (Expense), Net	Income Tax Benefit (Expense), Net	(12)		11		(6)		0		Income Tax Benefit (Expense), Net	(3)		6
Net Income (Loss)	Net Income (Loss)	$	(2,072)	$	(4,374)	$	(4,045)	$	(5,155)	Net Income (Loss)	$	(1,891)	$	(1,973)
Earnings Per Share	Earnings Per Share									Earnings Per Share
Basic	Basic	$	(1.83)	$	(6.07)	$	(3.63)	$	(7.34)	Basic	$	(1.66)	$	(1.80)
Diluted	Diluted	$	(1.83)	$	(6.07)	$	(3.63)	$	(7.34)	Diluted	$	(1.66)	$	(1.80)

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

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CARNIVAL CORPORATION & PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(in millions)


		Three Months Ended May 31,				Six Months Ended May 31,					Three Months Ended February 28,
		2021		2020		2021		2020			2022		2021
Net Income (Loss)	Net Income (Loss)	$	(2,072)	$	(4,374)	$	(4,045)	$	(5,155)	Net Income (Loss)	$	(1,891)	$	(1,973)
Items Included in Other Comprehensive Income (Loss)	Items Included in Other Comprehensive Income (Loss)									Items Included in Other Comprehensive Income (Loss)
Change in foreign currency translation adjustment	Change in foreign currency translation adjustment	104		23		303		48		Change in foreign currency translation adjustment	13		199
Other	Other	3		43		7		56		Other	2		4
Other Comprehensive Income (Loss)	Other Comprehensive Income (Loss)	107		65		310		103		Other Comprehensive Income (Loss)	16		203
Total Comprehensive Income (Loss)	Total Comprehensive Income (Loss)	$	(1,965)	$	(4,309)	$	(3,735)	$	(5,052)	Total Comprehensive Income (Loss)	$	(1,876)	$	(1,770)

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

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CARNIVAL CORPORATION & PLC

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in millions, except par values)


		May 31, 2021		November 30, 2020			February 28, 2022		November 30, 2021
ASSETS	ASSETS					ASSETS
Current Assets	Current Assets					Current Assets
Cash and cash equivalents	Cash and cash equivalents	$	7,067	$	9,513	Cash and cash equivalents	$	6,414	$	8,939
Short-term investments	Short-term investments	2,204		0		Short-term investments	515		200
Trade and other receivables, net	Trade and other receivables, net	218		273		Trade and other receivables, net	267		246
Inventories	Inventories	308		335		Inventories	392		356
Prepaid expenses and other	Prepaid expenses and other	400		443		Prepaid expenses and other	470		392
Total current assets	Total current assets	10,198		10,563		Total current assets	8,057		10,133
Property and Equipment, Net	Property and Equipment, Net	39,499		38,073		Property and Equipment, Net	40,183		38,107
Operating Lease Right-of-Use Assets	Operating Lease Right-of-Use Assets	1,415		1,370		Operating Lease Right-of-Use Assets	1,278		1,333
Goodwill	Goodwill	818		807		Goodwill	579		579
Other Intangibles	Other Intangibles	1,198		1,186		Other Intangibles	1,181		1,181
Other Assets	Other Assets	1,936		1,594		Other Assets	2,002		2,011
		$	55,064	$	53,593		$	53,281	$	53,344
LIABILITIES AND SHAREHOLDERS’ EQUITY	LIABILITIES AND SHAREHOLDERS’ EQUITY					LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities	Current Liabilities					Current Liabilities
Short-term borrowings	Short-term borrowings	$	3,099	$	3,084	Short-term borrowings	$	2,741	$	2,790
Current portion of long-term debt	Current portion of long-term debt	1,708		1,742		Current portion of long-term debt	2,272		1,927
Current portion of operating lease liabilities	Current portion of operating lease liabilities	142		151		Current portion of operating lease liabilities	139		142
Accounts payable	Accounts payable	499		624		Accounts payable	772		797
Accrued liabilities and other	Accrued liabilities and other	1,314		1,144		Accrued liabilities and other	1,627		1,641
Customer deposits	Customer deposits	1,992		1,940		Customer deposits	3,367		3,112
Total current liabilities	Total current liabilities	8,754		8,686		Total current liabilities	10,920		10,408
Long-Term Debt	Long-Term Debt	25,968		22,130		Long-Term Debt	29,887		28,509
Long-Term Operating Lease Liabilities	Long-Term Operating Lease Liabilities	1,317		1,273		Long-Term Operating Lease Liabilities	1,190		1,239
Other Long-Term Liabilities	Other Long-Term Liabilities	1,149		949		Other Long-Term Liabilities	973		1,043
Contingencies and Commitments	Contingencies and Commitments	0		0		Contingencies and Commitments	0		0
Shareholders’ Equity	Shareholders’ Equity					Shareholders’ Equity
Common stock of Carnival Corporation, $0.01 par value; 1,960 shares authorized; 1,104 shares at 2021 and 1,060 shares at 2020 issued		11		11
Ordinary shares of Carnival plc, $1.66 par value; 217 shares at 2021 and 2020 issued		361		361
Common stock of Carnival Corporation, $0.01 par value; 1,960 shares authorized; 1,120 shares at 2022 and 1,116 shares at 2021 issued						Common stock of Carnival Corporation, $0.01 par value; 1,960 shares authorized; 1,120 shares at 2022 and 1,116 shares at 2021 issued	11		11
Ordinary shares of Carnival plc, $1.66 par value; 217 shares at 2022 and 2021 issued						Ordinary shares of Carnival plc, $1.66 par value; 217 shares at 2022 and 2021 issued	361		361
Additional paid-in capital	Additional paid-in capital	15,005		13,948		Additional paid-in capital	15,360		15,292
Retained earnings	Retained earnings	12,030		16,075		Retained earnings	4,493		6,448
Accumulated other comprehensive income (loss) (“AOCI”)	Accumulated other comprehensive income (loss) (“AOCI”)	(1,126)		(1,436)		Accumulated other comprehensive income (loss) (“AOCI”)	(1,486)		(1,501)
Treasury stock, 130 shares at 2021 and 2020 of Carnival Corporation and 59 shares at 2021 and 60 shares at 2020 of Carnival plc, at cost		(8,404)		(8,404)
Treasury stock, 130 shares at 2022 and 2021 of Carnival Corporation and 68 shares at 2022 and 67 shares at 2021 of Carnival plc, at cost						Treasury stock, 130 shares at 2022 and 2021 of Carnival Corporation and 68 shares at 2022 and 67 shares at 2021 of Carnival plc, at cost	(8,428)		(8,466)
Total shareholders’ equity	Total shareholders’ equity	17,876		20,555		Total shareholders’ equity	10,311		12,144
		$	55,064	$	53,593		$	53,281	$	53,344

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

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CARNIVAL CORPORATION & PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in millions)


		Six Months Ended May 31,					Three Months Ended February 28,
		2021		2020			2022		2021
OPERATING ACTIVITIES	OPERATING ACTIVITIES					OPERATING ACTIVITIES
Net income (loss)	Net income (loss)	$	(4,045)	$	(5,155)	Net income (loss)	$	(1,891)	$	(1,973)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities	Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities					Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation and amortization	Depreciation and amortization	1,119		1,147		Depreciation and amortization	554		552
Impairments	Impairments	66		3,015		Impairments	8		17

(Gain) loss on debt extinguishment						(Gain) loss on debt extinguishment	—		(2)
(Income) loss from equity-method investments						(Income) loss from equity-method investments	11		8
Share-based compensation	Share-based compensation	66		38		Share-based compensation	26		40
Amortization of discounts and debt issue costs	Amortization of discounts and debt issue costs	83		33		Amortization of discounts and debt issue costs	46		42
Noncash lease expense	Noncash lease expense	71		99		Noncash lease expense	34		36
(Gain) loss on ship sales and other, net		80		(76)
Other, net						Other, net	5		44
		(2,559)		(900)			(1,207)		(1,236)
Changes in operating assets and liabilities	Changes in operating assets and liabilities					Changes in operating assets and liabilities
Receivables	Receivables	31		(202)		Receivables	(22)		6
Inventories	Inventories	0		58		Inventories	(37)		(1)
Prepaid expenses and other	Prepaid expenses and other	(696)		171		Prepaid expenses and other	(44)		(263)
Accounts payable	Accounts payable	(119)		1,052		Accounts payable	(24)		(128)
Accrued liabilities and other	Accrued liabilities and other	236		3		Accrued liabilities and other	(65)		167
Customer deposits	Customer deposits	245		(1,987)		Customer deposits	187		(49)
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	(2,862)		(1,804)		Net cash provided by (used in) operating activities	(1,212)		(1,503)
INVESTING ACTIVITIES	INVESTING ACTIVITIES					INVESTING ACTIVITIES
Purchases of property and equipment	Purchases of property and equipment	(2,157)		(1,668)		Purchases of property and equipment	(2,730)		(1,774)
Proceeds from sales of ships and other	Proceeds from sales of ships and other	324		236		Proceeds from sales of ships and other	18		9
Purchase of minority interest		(90)		(81)
Purchase of short-term investments	Purchase of short-term investments	(2,671)		0		Purchase of short-term investments	(315)		(1,840)
Proceeds from maturity of short-term investments		467		0
Derivative settlements and other, net	Derivative settlements and other, net	(27)		257		Derivative settlements and other, net	(6)		17
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(4,155)		(1,256)		Net cash provided by (used in) investing activities	(3,032)		(3,589)
FINANCING ACTIVITIES	FINANCING ACTIVITIES					FINANCING ACTIVITIES
Proceeds from (repayments of) short-term borrowings, net	Proceeds from (repayments of) short-term borrowings, net	17		3,333		Proceeds from (repayments of) short-term borrowings, net	(48)		—
Principal repayments of long-term debt	Principal repayments of long-term debt	(1,365)		(383)		Principal repayments of long-term debt	(503)		(668)
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	4,980		6,674		Proceeds from issuance of long-term debt	2,347		4,980
Dividends paid		0		(689)
Purchases of treasury stock		0		(12)
Issuance of common stock, net	Issuance of common stock, net	996		558		Issuance of common stock, net	15		997
Issuance of common stock under the Stock Swap Program						Issuance of common stock under the Stock Swap Program	27		—
Purchase of treasury stock under the Stock Swap Program						Purchase of treasury stock under the Stock Swap Program	(23)		—
Debt issue costs and other, net	Debt issue costs and other, net	(104)		(56)		Debt issue costs and other, net	(86)		(93)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	4,523		9,425		Net cash provided by (used in) financing activities	1,728		5,216
Effect of exchange rate changes on cash, cash equivalents and restricted cash	Effect of exchange rate changes on cash, cash equivalents and restricted cash	19		1		Effect of exchange rate changes on cash, cash equivalents and restricted cash	(8)		14
Net increase (decrease) in cash, cash equivalents and restricted cash	Net increase (decrease) in cash, cash equivalents and restricted cash	(2,474)		6,366		Net increase (decrease) in cash, cash equivalents and restricted cash	(2,524)		138
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	9,692		530		Cash, cash equivalents and restricted cash at beginning of period	8,976		9,692
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	7,218	$	6,896	Cash, cash equivalents and restricted cash at end of period	$	6,452	$	9,829

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

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CARNIVAL CORPORATION & PLC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

(in millions)

Three Months Ended
Common
stock Ordinary
shares Additional
paid-in
capital Retained
earnings AOCI Treasury
stock Total shareholders’ equity
At February 29, 2020 $ 7 $ 358 $ 8,829 $ 25,527 $ (2,028) $ (8,404) $ 24,290
Net income (loss) — — — (4,374) — — (4,374)
Other comprehensive income (loss) — — — — 65 — 65
Issuance of common stock through
underwritten public offering (net of offering expenses and underwriters’ discount) 1 — 555 — — — 556
Equity component of Convertible Senior Notes — — 286 — — — 286
Purchases of treasury stock under the
Repurchase Program and other — 2 12 2 — — 16
At May 31, 2020 $ 7 $ 360 $ 9,683 $ 21,155 $ (1,962) $ (8,404) $ 20,840
At February 28, 2021 $ 11 $ 361 $ 14,977 $ 14,102 $ (1,233) $ (8,404) $ 19,813
Net income (loss) — — — (2,072) — — (2,072)
Other comprehensive income (loss) — — — — 107 — 107
Other — — 28 — — — 28
At May 31, 2021 $ 11 $ 361 $ 15,005 $ 12,030 $ (1,126) $ (8,404) $ 17,876

Six Months Ended
Common
stock Ordinary
shares Additional
paid-in
capital Retained
earnings AOCI Treasury
stock Total
shareholders’
equity
At November 30, 2019 $ 7 $ 358 $ 8,807 $ 26,653 $ (2,066) $ (8,394) $ 25,365
Net income (loss) — — — (5,155) — — (5,155)
Other comprehensive income (loss) — — — — 103 — 103
Cash dividends declared ($0.50 per share) — — — (342) — — (342)
Issuance of common stock through underwritten public offering (net of offering expenses and underwriters’ discount) 1 — 555 — — — 556
Equity component of Convertible Senior Notes — — 286 — — — 286
Purchases of treasury stock under the Repurchase Program and other — 2 35 — — (10) 27
At May 31, 2020 $ 7 $ 360 $ 9,683 $ 21,155 $ (1,962) $ (8,404) $ 20,840
At November 30, 2020 $ 11 $ 361 $ 13,948 $ 16,075 $ (1,436) $ (8,404) $ 20,555
Net income (loss) — — — (4,045) — — (4,045)
Other comprehensive income (loss) — — — — 310 — 310
Issuance of common stock, net — — 996 — — — 997
Other — — 60 — — — 60
At May 31, 2021 $ 11 $ 361 $ 15,005 $ 12,030 $ (1,126) $ (8,404) $ 17,876


	Common stock		Ordinary shares		Additional paid-in capital		Retained earnings		AOCI		Treasury stock		Total shareholders’ equity
At November 30, 2020	$	11	$	361	$	13,948	$	16,075	$	(1,436)	$	(8,404)	$	20,555
Net income (loss)	—		—		—		(1,973)		—		—		(1,973)
Other comprehensive income (loss)	—		—		—		—		203		—		203
Issuance of common stock, net	—		—		996		—		—		—		997
Share-based compensation and other	—		—		32		—		—		—		32
At February 28, 2021	$	11	$	361	$	14,977	$	14,102	$	(1,233)	$	(8,404)	$	19,813

At November 30, 2021	$	11	$	361	$	15,292	$	6,448	$	(1,501)	$	(8,466)	$	12,144
Net income (loss)	—		—		—		(1,891)		—		—		(1,891)
Other comprehensive income (loss)	—		—		—		—		16		—		16
Issuances of common stock, net	—				15								15
Purchases and issuances under the Stock Swap program, net	—		—		27		—		—		(25)		2
Issuance of treasury shares for vested share-based awards	—		—		—		(63)				63		—
Share-based compensation and other	—				26		—				—		26
At February 28, 2022	$	11	$	361	$	15,360	$	4,493	$	(1,486)	$	(8,428)	$	10,311

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. As of ~~May 31, 2021, 5~~February 28, 2022, 71% of our ~~ships were operating with guests onboard. NaN of our 9 brands either have~~capacity had resumed ~~or are announced to resume~~ guest cruise operations ~~by November 30, 2021,~~ as part of our ~~phased~~ongoing return to service. ~~Significant events affecting travel, including COVID-19 and our phased resumption of guest cruise operations, have had and continue to have an impact on booking patterns.~~ The ~~full~~ extent of the ~~impact~~effects of COVID-19 on our business are uncertain and will ~~be determined by our phased return~~depend on future developments, including, but not limited to, ~~service~~the duration and continued severity of COVID-19 and the length of time ~~COVID-19 influences travel decisions. We believe that~~it takes to return the company to profitability. The ongoing ~~effects~~resumption of ~~COVID-19 on~~ our guest cruise operations and ~~global bookings have had, and will continue to have,~~the increased uncertainty given the current invasion of Ukraine, including its effect on the price of fuel, are collectively having a material negative impact on our business, including our liquidity, financial position and results ~~and liquidity.~~of operations.

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:

•~~Expected continued phased~~Ongoing resumption of guest cruise operations, with each brand’s full fleet expected to be back in guest cruise operations for its respective summer season where we historically generate the largest share of our operating income

•Expected ~~lower than comparable historical occupancy levels during the resumption~~sustained increase in revenue per passenger cruise day through a combination of ~~guest cruise operations~~both passenger ticket and onboard revenue as compared to 2019

•Expected ~~incremental~~improvement in occupancy throughout 2022 until we return to historical occupancy levels in 2023

•Expected continued spend ~~for~~to maintain enhanced health and safety protocols and to support the ongoing resumption of guest cruise operations, ~~for bringing our ships out~~including completing the return of ~~pause status, returning~~ crew members to our ships

•Fuel prices

•Maintaining collateral and ~~implementing enhanced health and safety protocols~~reserves at reasonable levels

In addition, we make certain assumptions about new ship deliveries, improvements and ~~disposals,~~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 ongoing resumption of our guest cruise operations, and as a consequence, our ability to be predictive is uncertain. In addition, the magnitude and duration of the global pandemic and the current invasion of Ukraine are uncertain. We have made reasonable estimates and judgments of the impact of ~~COVID-19~~these events within our consolidated financial statements and there may be changes to those estimates in future periods. ~~We continue to expect a net loss on both a U.S. GAAP and adjusted basis for the third quarter of 2021 and the full year ending November 30, 2021.~~ We have taken 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 and~~fleet. In addition, we expect to continue to pursue refinancing opportunities to reduce interest expense and extend ~~maturities.~~maturities and if appropriate, obtain relevant financial covenant amendments.

Based on these actions and our assumptions regarding the impact of COVID-19, ~~and~~ considering our ~~$9.3~~$7.2 billion of liquidity including cash, ~~and~~ short-term investments and borrowings available under our revolving facility at ~~May 31, 2021,~~February 28, 2022, as well as our continued ongoing 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 (Loss), the Consolidated Statements of Comprehensive Income (Loss), the Consolidated Statements of Cash Flows and the Consolidated Statements of Shareholders’ Equity for the three ~~and six~~ months ended ~~May 31,~~February 28, 2022 and 2021, ~~and 2020, Consolidated Statements of Cash Flows for the six months ended May 31, 2021 and 2020,~~ and the Consolidated Balance Sheet at ~~May 31, 2021~~February 28, 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 ~~2020~~2021 joint Annual Report on Form 10-K (“Form 10-K”) filed with the U.S. Securities and Exchange Commission on January ~~26, 2021.~~27, 2022.

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COVID-19 and the 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 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

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developments that are highly uncertain. We have made reasonable estimates and judgments of the impact of COVID-19 within our financial statements and there may be changes to those estimates in future periods.

Accounting Pronouncements

The Financial Accounting Standards Board issued guidance, Debt - Debt with Conversion and Other Options and Derivative and Hedging - Contracts in ~~Entity's~~Entity’s Own Equity, which simplifies the accounting for convertible instruments. This guidance eliminates certain models that require separate accounting for embedded conversion features, in certain cases. Additionally, among other changes, the guidance eliminates certain of the conditions for equity classification for contracts in an entity’s own equity. The guidance also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include the effect of share settlement for instruments that may be settled in cash or shares, except for certain liability-classified share-based payment awards. This guidance is required to be adopted by us in the first quarter of 2023 and must be applied using either a modified or full retrospective approach. We are currently evaluating the impact this guidance will have on our consolidated financial statements.

NOTE 2 – Revenue and Expense Recognition

Guest cruise deposits 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 voyage are recognized as cruise costs and expenses, upon completion of voyages with durations of ten nights or less and on a pro rata basis for voyages in excess of ten nights. The impact of recognizing these shorter duration cruise revenues and costs and expenses on a completed voyage basis versus on a pro rata basis is not material. Certain of our product offerings are bundled and we allocate the value of the bundled services and goods between passenger ticket revenues and onboard and other revenues based upon the estimated standalone selling prices of those goods and services. Guest cancellation fees, when applicable, are recognized in passenger ticket revenues at the time of cancellation.

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

Passenger ticket revenues include fees, taxes and charges collected by us from our guests. A portion of these fees, taxes and charges vary with guest head counts and are directly imposed on a revenue-producing arrangement. This portion of the fees, taxes and charges is expensed in commissions, transportation and other costs when the corresponding revenues are recognized. For the three ~~and six~~ months ended ~~May 31,~~February 28, 2022 and 2021, fees, taxes, and charges included in commissions, transportation and other costs were ~~not significant in 2021 and were $41~~$68 million and ~~$215 million in 2020.~~$41 million. 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. ~~Revenues from the long-term leasing of ships, which are also included in our Tour and Other segment, are recognized ratably over the term of the agreement.~~

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Customer Deposits

Our payment terms generally require an initial deposit to confirm a reservation, with the balance due prior to the voyage. Cash received from guests in advance of the cruise is recorded in customer deposits and in other long-term liabilities on our Consolidated Balance Sheets. These amounts include refundable deposits. We ~~are providing~~have provided flexibility to guests with bookings on sailings cancelled due to ~~the pause in cruise operations~~itinerary disruptions by allowing guests to rebook at a future date, receive enhanced future cruise credits (“FCC”) or elect to receive refunds in cash. 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 have paid ~~and expect to continue~~refunds ~~to pay cash refunds~~ of customer deposits with respect to a portion of ~~these~~ cancelled cruises. The amount of any future cash refunds ~~to be paid~~ may depend on ~~the level of guest acceptance of FCCs and~~ future cruise ~~cancellations.~~cancellations and guest rebookings. We record a liability for unexpired FCCs to the extent we have received and not refunded cash from guests ~~with bookings on~~for cancelled ~~sailings.~~bookings. We had total customer deposits of $~~2.5~~3.7 billion as of ~~May 31, 2021~~February 28, 2022 and ~~$2.2~~$3.5 billion as of November 30, ~~2020. As of May 31,~~ 2021 ~~the current portion of customer deposits was~~ ~~$2.0 billion. This amount includes deposits related to cancelled cruises prior to the election of a cash refund by guests.~~. Refunds payable to guests who have elected cash refunds are recorded in accounts payable. Due to the uncertainty associated with the duration and extent of COVID-19, we are unable to estimate the amount of the May 31, 2021 customer deposits that will be recognized in earnings compared to amounts that will be refunded to customers or issued as a credit for future travel.During the ~~six~~three months ended ~~May 31,~~February 28, 2022 and 2021, ~~and 2020,~~ we recognized revenues of $1.0 billion and an immaterial amount ~~and $3.5 billion, respectively,~~ related to our customer deposits as of November 30, ~~2020~~2021 and ~~2019.~~2020. Historically, our customer deposits balance changes due to the seasonal nature of cash collections, the recognition of revenue, ~~refund~~refunds of customer deposits and foreign currency translation.

Contract 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 also have receivables from credit card merchants 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, which we record as an asset within prepaid expenses and other and which are subsequently recognized as commissions, transportation and other at the time of revenue recognition or at the time of voyage cancellation. We ~~have~~had contract assets of ~~an immaterial amount~~$70 million as of ~~May 31, 2021~~February 28, 2022 and $55 million as of November 30, ~~2020.~~2021.

NOTE 3 – Debt

Short-Term Borrowings

As of February 28, 2022 and November 30, 2021, our short-term borrowings consisted of $2.7 billion and $2.8 billion under our $1.7 billion, €1.0 billion and £0.2 billion revolving credit facility (the “Revolving Facility”).

Export Credit Facility Borrowings

~~In December 2020,~~During the first quarter of 2022, we borrowed ~~$1.5~~$2.3 billion under export credit facilities due in semi-annual installments through ~~2033.~~

~~2027 Senior Unsecured Notes~~

In February 2021, we issued an aggregate principal amount of $3.5 billion senior unsecured notes that mature on March 1, 2027 (the “2027 Senior Unsecured Notes”). The 2027 Senior Unsecured Notes bear interest at a rate of 5.8% per year. The 2027 Senior Unsecured Notes are guaranteed by Carnival plc and the same subsidiaries of Carnival Corporation & plc that guarantee the 2023 Secured Notes, 2026 Secured Notes, 2027 Senior Secured Notes and 2026 Senior Unsecured Notes, and are unsecured. The indenture governing the 2027 Senior Unsecured Notes contains covenants that are substantially similar to the covenants in the indentures governing the 2026 Senior Unsecured Notes and, except for the unsecured nature of the 2027 Senior Unsecured Notes, the indentures governing the 2023 Secured Notes, 2026 Secured Notes and 2027 Secured Notes and the credit agreement governing the 2025 Secured Term Loan. These covenants are subject to a number of important limitations and exceptions.2034.

Covenant Compliance

~~Our~~As of February 28, 2022, our Revolving Facility, unsecured loans and export credit facilities contain ~~one or more~~certain covenants, ~~that~~the most restrictive of which require us to:

•Maintain minimum interest coverage ~~(EBITDA~~(adjusted EBITDA to consolidated net interest ~~charges for the most recently ended four fiscal quarters) (the “Interest Coverage Covenant”) of not less than 3.0 to 1.0 at the end of each fiscal quarter~~

•~~Maintain minimum shareholders’ equity of $5.0 billion~~

•~~Limit our debt to capital percentage (the “Debt to Capital Covenant”) to 65% at the end of each fiscal quarter~~

•~~Limit the amounts of our secured assets as well as secured and other indebtedness~~

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We entered into supplemental agreements to waive compliance with the Interest Coverage Covenant and the Debt to Capital Covenant under our export credit facilities through August 31, 2022 or November 30, 2022, as applicable. We will be required to comply beginning with the next testing date of November 30, 2022 or February 28, 2023, as applicable.

During the first quarter of 2021 we entered into supplemental agreements with respect to our $3.1 billion ($1.7 billion, €1.0 billion and £150 million) multi-currency revolving credit facility (the “Revolving Credit Facility”) and many of our bank loans. These agreements now contain one or more covenants that require us to:

•~~Maintain the Interest Coverage Covenant~~charges) at the end of each fiscal quarter from February 28, 2023, at a ratio of not less than 2.0 to 1.0 for the February 28, 2023 and May 31, 2023 testing dates, 2.5 to 1.0 for the August 31, 2023 and November 30, 2023 testing dates, and 3.0 to 1.0 for the February ~~28,~~29, 2024 testing date onwards, or through their respective maturity ~~dates.~~dates

•Maintain minimum shareholders’ equity of $5.0 ~~billion.~~billion

•~~Maintain the Debt~~Limit our debt to ~~Capital Covenant at the end of each fiscal quarter before the November 30, 2021 testing date at a~~capital (as defined) percentage ~~not to exceed 65%. From~~from the November 30, 2021 testing date until the May 31, 2023 testing date, ~~the Debt~~ to ~~Capital Covenant is~~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.~~onwards

•Maintain minimum liquidity of ~~$1.0~~$1.5 billion through November 30, ~~2022.~~2026

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•Adhere to certain restrictive covenants through November 30, ~~2024.~~2024

•~~Restrict~~Limit the ~~granting of guarantees and security interests for certain~~amounts of our ~~outstanding debt through November 30, 2024.~~secured assets as well as secured and other indebtedness

At ~~May 31, 2021,~~February 28, 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 lender protections that would be applicable.

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

As of ~~May 31, 2021,~~February 28, 2022, the scheduled maturities of our debt are as follows:


(in millions)	(in millions)			(in millions)
Year	Year	Principal Payments		Year	Principal Payments
2021 3Q		$	259
2021 4Q		328
2022		2,782
2Q 2022				2Q 2022	$	182
3Q 2022				3Q 2022	409
4Q 2022				4Q 2022	982
2023	2023	6,373		2023	2,898
2024 (a)	2024 (a)	4,571		2024 (a)	4,825
2025	2025	3,994		2025	4,522
2026				2026	4,598
Thereafter	Thereafter	13,168		Thereafter	17,304
Total	Total	$	31,475	Total	$	35,721

(a)Includes ~~the $3.1~~borrowings of $2.7 billion under our Revolving ~~Credit~~ Facility. ~~The~~Amounts outstanding under our Revolving ~~Credit~~ Facility ~~was fully~~were drawn in 2020 for ~~six month terms. The maturities for these borrowings are currently extended through September 2021.~~an initial six-month term. We may continue to re-borrow ~~such~~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 February 28, 2022. The Revolving ~~Credit~~ 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 ~~undrawn~~unutilized portion.

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NOTE 4 – Contingencies and Commitments

Litigation

We are routinely involved in legal proceedings, claims, disputes, regulatory matters and governmental inspections or investigations arising in the ordinary course of or incidental to our business, including those noted below. Additionally, as a result of the impact of COVID-19, litigation claims, enforcement actions, regulatory actions and investigations, including, but not limited to, those arising from personal injury and loss of life, have been and may, in the future, be asserted against us. We expect many of these claims and actions, 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, has been limited to our self-insurance retention levels.

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

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

As previously disclosed, on May 2, 2019, 2 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 (the “Cuba matters”).~~damages. In the matter filed by Havana Docks

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Corporation, the hearings on motions for summary judgment were concluded on January 18, 2022. On ~~July 9, 2020,~~March 21, 2022, the court granted summary judgment in favor of Havana Docks Corporation as to liability. The amount of damages will be determined at the trial currently scheduled for May 23, 2022. We are assessing our ~~motion for judgment on~~options, including appealing this order. In the ~~pleadings in the Cuba~~ matter filed by Javier ~~Garcia~~ Bengochea, on October 4, 2021, the U.S. Court of Appeals for the Eleventh Circuit Court heard oral arguments and ~~dismissed the plaintiff’s action with prejudice. On August 6, 2020, Bengochea filed a notice of appeal. On January 21,~~on December 20, 2021, the court ~~continued~~issued an order inviting an amicus brief from the ~~trial date~~U.S. government on several issues involved in the ~~second Cuba matter to January 31, 2022.~~appeal. 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 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. The parties’ motions to dismiss in both actions have been granted in part and denied in part. Answers have been filed by both parties. We believe the ultimate outcome will not have a material impact on our consolidated financial statements.

~~Contingent Obligations – Indemnifications~~COVID-19 Actions

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 the 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.

~~Other Contingencies~~

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 May 31, 2021 and November 30, 2020, we had $939 million and $423 million, respectively, in reserve funds relating to our customer deposits to satisfy these requirements which are included within other assets. We expect a portion of new customer deposits to be withheld under these agreements. Additionally, as of May 31, 2021 and November 30, 2020 we had $166 million of cash collateral in escrow, of which $136 million is included within prepaid expenses and other.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 February 28, 2022 in several U.S. federal and state courts as well as in France, 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 February 28, 2022, 63 of these individual actions have now been dismissed or settled and ten remain. These actions were settled for immaterial amounts.

Additionally, as of February 28, 2022, 10 purported class actions have been brought by former guests from Ruby Princess, Diamond Princess, Grand Princess, Coral Princess, Costa Luminosa or 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 February 28, 2022, 9 of these class actions have either been settled individually or had their class allegations dismissed by the courts and one remains. These actions were settled for immaterial amounts.

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

As previously disclosed, on December 15, 2020, a consolidated class action with lead plaintiffs, the New England Carpenters Pension and Guaranteed Annuity Fund and the Massachusetts Laborers’ Pension and Annuity Fund was filed in the U.S. District Court for the Southern District of Florida, alleging violations of Sections 10(b) and 20(a) of the U.S. Securities and Exchange Act of 1934 by making misrepresentations and omissions related to Carnival Corporation’s COVID-19 knowledge and response. Plaintiffs seek to recover unspecified damages and equitable relief for the alleged misstatements and omissions. The plaintiffs filed a second amended complaint on July 2, 2021 and on August 6, 2021, we filed a motion to dismiss, which has now been fully briefed.

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

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.

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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.

We responded to a cybersecurity event in May 2019 related to our email accounts, and detected ransomware attacks in August 2020 and December 2020 which resulted in unauthorized access to our information technology systems. We engaged a major cybersecurity firm to investigate these matters and notified relevant law enforcement and regulators of these incidents.

•For the May 2019 and August 2020 ~~event,~~events, the investigation, ~~phase is complete, as are the~~ communication and reporting ~~phases.~~phases are complete. We determined that, ~~the~~for each event, an unauthorized third-party gained access to certain email accounts, which contained personal information relating to some guests, employees and crew for some of our operations.

•For the December 2020 event, the investigation, communication and ~~remediation~~reporting phases are complete. Regulators were notified, and several, including the primary regulatory authority in ~~process and regulators~~the European Union, have ~~been notified.~~closed their files on this matter.

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We have been contacted by various regulatory agencies regarding these and other cyber incidents. The New York Department of Financial Services (“NY DFS”) has notified us of their intent to commence proceedings seeking penalties if settlement cannot be reached in advance of litigation. To date, we have not been able to reach an agreement with NY DFS. In addition, State Attorneys General from a number of states ~~are currently investigating~~have completed their investigation of a data security event announced in March 2020, and ~~have indicated an intent to seek~~the Company is currently negotiating a ~~negotiated settlement.~~settlement with the relevant State Attorneys General.

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 at this time we do not believe that these incidents will have a material adverse effect on our business, operations or financial results, 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.

~~COVID-19 Actions~~

~~Private Actions~~

We ~~have been named in~~are subject to a number of individual actions related to COVID-19. Private parties have brought approximately 72 lawsuits as of June 21, 2021 in several U.S. federal and state courts as well as in France, 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.

~~Additionally, as of June 21, 2021, 10 purported class actions have been brought~~court-ordered environmental compliance plan supervised by ~~former guests from~~ ~~Ruby Princess~~, ~~Diamond Princess~~, ~~Grand Princess~~, ~~Coral Princess, Costa Luminosa~~ or ~~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.

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

As previously disclosed, a consolidated class action complaint with new lead plaintiffs, the New England Carpenters Pension and Guaranteed Annuity Fund and the Massachusetts Laborers' Pension and Annuity Fund, was filed in the U.S. District Court for the Southern District of Florida, ~~on December 15, 2020 on behalf~~which is operative until mid-April 2022 and subjects our operations to additional review and other obligations. Failure to comply with the requirements of ~~all purchasers~~this environmental compliance plan or other special conditions of Carnival Corporation common stock and/or Carnival plc American Depositary Shares, and sellers of put options and purchasers of call options on those securities, between September 16, 2019 and March 31, 2020, alleging violations of Sections 10(b) and 20(a) of the U.S. Securities and Exchange Act of 1934. On May 28, 2021,probation could result in fines, which the court ~~dismissed~~has imposed in the ~~complaint without prejudice. Plaintiff's current deadline to file a second amended complaint is July 2, 2021.~~past, including during the three months ended February 28, 2022 as reported in the Form 10-K, and restrictions on our operations.

On March 14, 2022, the United States Department of Justice and the United States Environmental Protection Agency notified Carnival Corporation & plc 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. Carnival Corporation & plc is working with these agencies to reach a resolution of this matter. We ~~continue~~do not expect this matter to ~~take proper actions to defend against the above claims.~~have a material effect on our financial results.

~~Governmental Inquiries and Investigations~~Other Contingent Obligations

~~Federal and non-U.S. governmental agencies and officials~~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 the lender’s costs. There are ~~investigating~~no stated 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 resultnotional amounts included in the ~~imposition~~indemnification clauses, and we are not able to estimate the maximum potential amount of ~~civil~~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 February 28, 2022 and ~~criminal penalties~~November 30, 2021, we had $1.1 billion in ~~the future.~~reserve funds related to our customer deposits withheld to satisfy these requirements which are included within other assets. We continue to expect to provide reserve funds under these agreements. Additionally, as of February 28, 2022 and November 30, 2021, we had $30 million of cash collateral in escrow which is included within other assets.

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Ship Commitments

As of ~~May 31, 2021,~~February 28, 2022, we expect the timing of our new ship growth capital commitments to be as follows:


(in millions) Year	(in millions) Year			(in millions) Year
Remainder of 2021		$	1,263
2022		4,709
Remainder of 2022				Remainder of 2022	$	1,875
2023	2023	2,517		2023	2,562
2024	2024	1,725		2024	1,659
2025	2025	1,017		2025	984
2026				2026	—
Thereafter	Thereafter	0		Thereafter	—
		$	11,231		$	7,080

NOTE 5 – 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
May 31, 2021 November 30, 2020
Carrying
Value Fair Value Carrying
Value Fair Value
(in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Assets
Long-term other assets (a) $ 43 $ 0 $ 26 $ 19 $ 45 $ 0 $ 17 $ 18
Total $ 43 $ 0 $ 26 $ 19 $ 45 $ 0 $ 17 $ 18
Liabilities
Fixed rate debt (b) $ 19,087 $ 0 $ 20,880 $ 0 $ 15,547 $ 0 $ 16,258 $ 0
Floating rate debt (b) 12,389 0 11,872 0 12,034 0 11,412 0
Total $ 31,475 $ 0 $ 32,751 $ 0 $ 27,581 $ 0 $ 27,670 $ 0


	February 28, 2022								November 30, 2021
	Carrying Value		Fair Value						Carrying Value		Fair Value
(in millions)			Level 1		Level 2		Level 3				Level 1		Level 2		Level 3
Liabilities
Fixed rate debt (a)	$	20,899	$	—	$	19,845	$	—	$	19,555	$	—	$	19,013	$	—
Floating rate debt (a)	14,822		—		13,562		—		14,415		—		13,451		—
Total	$	35,721	$	—	$	33,407	$	—	$	33,970	$	—	$	32,463	$	—

(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.

Table of Contents

Financial Instruments that are Measured at Fair Value on a Recurring Basis


		May 31, 2021						November 30, 2020							February 28, 2022						November 30, 2021
(in millions)	(in millions)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3		(in millions)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets	Assets													Assets
Cash and cash equivalents	Cash and cash equivalents	$	7,067	$	—	$	—	$	9,513	$	—	$	—	Cash and cash equivalents	$	6,414	$	—	$	—	$	8,939	$	—	$	—
Restricted cash		150		—		—		179		—		—

Short-term investments (a)	Short-term investments (a)	2,204		—		—		—		—		—		Short-term investments (a)	515		—		—		200		—		—

Derivative financial instruments														Derivative financial instruments	—		5		—		—		1		—
Total	Total	$	9,422	$	—	$	—	$	9,692	$	—	$	—	Total	$	6,929	$	5	$	—	$	9,139	$	1	$	—
Liabilities	Liabilities													Liabilities
Derivative financial instruments	Derivative financial instruments	$	—	$	8	$	—	$	—	$	10	$	—	Derivative financial instruments	$	—	$	18	$	—	$	—	$	13	$	—
Total	Total	$	—	$	8	$	—	$	—	$	10	$	—	Total	$	—	$	18	$	—	$	—	$	13	$	—

(a)Short term investments consist of marketable securities with original maturities of between three and twelve months.

Nonfinancial Instruments that are Measured at Fair Value on a Nonrecurring Basis

Valuation of Goodwill and Trademarks

As a result of the phased resumption of guest cruise operations and its effect on our expected future operating cash flows, we performed interim discounted cash flow analyses for certain reporting units with goodwill as of May 31, 2021, and determined there was 0 impairment. For the three and six months ended May 31, 2020, we recognized goodwill impairment charges of $1.4 billion and $2.1 billion, respectively. We also performed trademark impairment reviews and determined there was no impairment to our trademarks.

The determination of the fair value of our reporting units’ goodwill and trademarks includes numerous estimates and underlying assumptions that are subject to various risks and uncertainties. ~~The effect of COVID-19 and the phased resumption have created some uncertainty in forecasting the operating results and future cash flows used in our impairment analyses.~~ We believe that we have made reasonable estimates and judgments. A change in the conditions, circumstances or strategy (including decisions about the allocation of new ships amongst brands and the transfer of ships between brands), which influence determinations of fair value, may result in a need to recognize an additional impairment charge~~. The principal assumptions, all of which are considered Level 3 inputs, used in our cash flow analyses consisted of:~~

•~~The timing of our return to service, changes in market conditions and port or other restrictions~~

•Forecasted revenues net of our most significant variable costs, which are travel agent commissions, costs of air and other transportation, and certain other costs that are directly associated with onboard and other revenues including credit and debit card fees

•~~The allocation of new ships and the timing of the transfer or sale of ships amongst brands, as well as the estimated proceeds from ship sales~~

•~~Weighted-average cost of capital of market participants, adjusted for the risk attributable to the geographic regions in which these cruise brands operate~~

~~Refer to Note 1 -~~ “~~General, COVID-19 and the Use of Estimates and Risks and Uncertainty~~” ~~for additional discussion.~~

~~Table of Contents~~

Goodwill
(in millions) NAA
Segment (a) EA
Segment (b) Total
November 30, 2020 $ 579 $ 228 $ 807
Foreign currency translation adjustment 0 11 11
May 31, 2021 $ 579 $ 239 $ 818


	Goodwill
(in millions)	NAA Segment (a)		EA Segment (b)		Total
November 30, 2021	$	579	$	—	$	579
Exchange movements	—		—		—
February 28, 2022	$	579	$	—	$	579

(a)North America and Australia (“NAA”)

(b)Europe and Asia (“EA”)

Trademarks
(in millions) NAA
Segment EA
Segment Total
November 30, 2020 $ 927 $ 253 $ 1,180
Foreign currency translation adjustment 0 12 12
May 31, 2021 $ 927 $ 265 $ 1,192


	Trademarks
(in millions)	NAA Segment		EA Segment		Total
November 30, 2021	$	927	$	248	$	1,175
Exchange movements	$	—	—		—
February 28, 2022	$	927	$	248	$	1,175

Impairment of Ships

We review our long-lived assets for impairment whenever events or circumstances indicate potential impairment. As a result of the continued effect of COVID-19 on our business, and our updated expectations of the estimated selling values for certain of our ships, we determined that ~~one~~a ship ~~which we expect to dispose of,~~ had a net carrying value that exceeded its estimated ~~undiscounted~~discounted future cash ~~flows as of May 31, 2021.~~flows. We ~~determined~~compared the ~~fair value of this ship based on its~~ estimated selling ~~value.~~value to the net carrying value and, as a result, recognized ship impairment charges as summarized in the table below. 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 principal assumptions, which influences the determination of fair value, may result in a need to perform additional impairment reviews. ~~The principal assumptions, all of which are considered Level 3 inputs, used in our 2020 cash flow analyses consisted of:~~

•~~Timing of the respective ship's return to service, changes in market conditions and port or other restrictions~~

•Forecasted ship revenues net of our most significant variable costs, which are travel agent commissions, costs of air and other transportation and certain other costs that are directly associated with onboard and other revenues, including credit and debit card fees

•~~Timing of the sale of ships and estimated proceeds~~

~~We recognized a ship impairment charge of $49 million in our EA segment for both the three and six months ended~~ ~~May 31, 2021. For the three months ended May 31, 2020, we recognized $348 million and $150 million of ship~~The impairment charges summarized in ~~our NAA and EA segments respectively, and $520 million and $308 million of ship impairment charges in our NAA and EA segments, respectively for~~ the ~~six months ended May 31, 2020. These impairments~~table below are included in ship and other ~~operating expenses of~~impairments in our Consolidated Statements of Income (Loss).


(in millions)	February 28, 2022
NAA Segment	$	8
EA Segment	—
Total ship impairments	$	8

We did not recognize any ship impairment charges for the three months ended February 28, 2021.

Refer to Note 1 - “General, COVID-19 and the Use of Estimates and Risks and Uncertainty” for additional discussion.

Derivative Instruments and Hedging Activities


(in millions)	(in millions)	Balance Sheet Location	May 31, 2021		November 30, 2020		(in millions)	Balance Sheet Location	February 28, 2022		November 30, 2021
Derivative assets							Derivative assets
Derivatives designated as hedging instruments							Derivatives designated as hedging instruments
Cross currency swaps (a)							Cross currency swaps (a)	Prepaid expenses and other	$	5	$	1

Total derivative assets							Total derivative assets		$	5	$	1
Derivative liabilities	Derivative liabilities						Derivative liabilities
Derivatives designated as hedging instruments	Derivatives designated as hedging instruments						Derivatives designated as hedging instruments

Cross currency swaps (a)							Cross currency swaps (a)	Other long-term liabilities	$	14	$	8

Interest rate swaps ~~(a)~~(b)	Interest rate swaps ~~(a)~~(b)	Accrued liabilities and other	$	4	$	5	Interest rate swaps ~~(a)~~(b)	Accrued liabilities and other	2		3
		Other long-term liabilities	4		5			Other long-term liabilities	1		2
Total derivative liabilities	Total derivative liabilities		$	8	$	10	Total derivative liabilities		$	18	$	13

(a)At February 28, 2022, we had cross currency swaps totaling $598 million that are designated as hedges of our net investment in foreign operations with euro-denominated functional currencies. At February 28, 2022, these cross currency swaps settle through 2028.

(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 ~~$212~~$147 million at ~~May 31, 2021~~February 28, 2022 and ~~$248~~$160 million at November 30, ~~2020~~2021 of EURIBOR-based floating rate euro debt to fixed rate euro debt. At ~~May 31, 2021,~~February 28, 2022, these interest rate swaps settle through 2025.

~~Table of Contents~~

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


		May 31, 2021											February 28, 2022
(in millions)	(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		(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	Assets	$	0	$	0	$	0	$	0	$	0	Assets	$	5	$	—	$	5	$	—	$	5
Liabilities	Liabilities	$	8	$	0	$	8	$	0	$	8	Liabilities	$	18	$	—	$	18	$	—	$	18

		November 30, 2020											November 30, 2021
(in millions)	(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		(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	Assets	$	0	$	0	$	0	$	0	$	0	Assets	$	1	$	—	$	1	$	—	$	1
Liabilities	Liabilities	$	10	$	0	$	10	$	0	$	10	Liabilities	$	13	$	—	$	13	$	—	$	13

The effect of our derivatives qualifying and designated as hedging instruments recognized in other comprehensive income (loss) and in net income (loss) was as follows:


		Three Months Ended May 31,				Six Months Ended May 31,					Three Months Ended February 28,
(in millions)	(in millions)	2021		2020		2021		2020		(in millions)	2022		2021
Gains (losses) recognized in AOCI:	Gains (losses) recognized in AOCI:									Gains (losses) recognized in AOCI:
Cross currency swaps - net investment hedges - included component	Cross currency swaps - net investment hedges - included component	$	0	$	133	$	0	$	131	Cross currency swaps - net investment hedges - included component	$	5	$	—
Cross currency swaps - net investment hedges - excluded component	Cross currency swaps - net investment hedges - excluded component	$	0	$	(43)	$	0	$	(1)	Cross currency swaps - net investment hedges - excluded component	$	(8)	$	—
Foreign currency zero cost collars - cash flow hedges		$	0	$	1	$	0	$	(1)
Foreign currency forwards - cash flow hedges		$	0	$	38	$	0	$	53

Interest rate swaps - cash flow hedges	Interest rate swaps - cash flow hedges	$	1	$	4	$	2	$	4	Interest rate swaps - cash flow hedges	$	3	$	1
Gains (losses) reclassified from AOCI - cash flow hedges:	Gains (losses) reclassified from AOCI - cash flow hedges:									Gains (losses) reclassified from AOCI - cash flow hedges:
Interest rate swaps - Interest expense, net of capitalized interest	Interest rate swaps - Interest expense, net of capitalized interest	$	(1)	$	(1)	$	(3)	$	(3)	Interest rate swaps - Interest expense, net of capitalized interest	$	(1)	$	(1)
Foreign currency zero cost collars - Depreciation and amortization	Foreign currency zero cost collars - Depreciation and amortization	$	0	$	0	$	1	$	0	Foreign currency zero cost collars - Depreciation and amortization	$	1	$	1
Gains (losses) recognized on derivative instruments (amount excluded from effectiveness testing – net investment hedges)	Gains (losses) recognized on derivative instruments (amount excluded from effectiveness testing – net investment hedges)									Gains (losses) recognized on derivative instruments (amount excluded from effectiveness testing – net investment hedges)
Cross currency swaps - Interest expense, net of capitalized interest	Cross currency swaps - Interest expense, net of capitalized interest	$	0	$	2	$	0	$	12	Cross currency swaps - Interest expense, net of capitalized interest	$	1	$	—

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 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 manage fuel consumption through ship maintenance practices, modifying our itineraries and implementing innovative technologies.

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 hedge~~consider hedging certain of our ship commitments and net investments in foreign operations. The financial impacts of ~~the~~our hedging instruments ~~we do employ~~ generally offset the changes in the underlying exposures being hedged.

~~Table of Contents~~

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 affect our financial statements.

Investment Currency Risks

We consider our investments in foreign operations to be denominated in stable currencies 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 ~~May 31, 2021,~~February 28, 2022, we have designated ~~$497~~$469 million of our sterling-denominated debt as non-derivative hedges of our net investments in foreign operations. For the three ~~and six~~ months ended ~~May 31, 2021,~~February 28, 2022, we recognized ~~$8 million and $50~~$2 million of losses on these non-derivative net investment hedges in the cumulative translation adjustment section of other comprehensive income (loss). We also have ~~$9 billion~~euro-denominated debt, including the effect of ~~euro-denominated debt,~~cross currency swaps, which provides an economic offset for our operations with euro functional currency.

Newbuild Currency Risks

Our shipbuilding contracts are typically denominated in euros. Our decision to hedge a non-functional currency ship commitment for our cruise brands is made on a case-by-case basis, considering the amount and duration of the exposure, market volatility, economic trends, our overall expected net cash flows by currency and other offsetting risks. ~~We use foreign currency derivative contracts to manage foreign currency exchange rate risk for some of our ship construction payments.~~

At ~~May 31, 2021,~~February 28, 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 ~~$6.8~~$6.1 billion for newbuilds scheduled to be delivered through 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.

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 manage these credit risk exposures, including counterparty nonperformance primarily associated with our cash equivalents, investments, notes 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 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

At ~~May 31, 2021,~~February 28, 2022, our exposures under derivative instruments 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,~~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.

~~Table of Contents~~

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.

NOTE 6 – Segment Information

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 ~~Executive~~Climate 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 4 reportable segments are comprised of (1) NAA cruise operations, (2) EA cruise operations, (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, including geographic guest sourcing. Our Cruise Support segment includes 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.

~~Table of Contents~~

Three Months Ended May 31,
(in millions) Revenues Operating costs and
expenses Selling
and
administrative Depreciation
and
amortization Operating
income (loss)
2021
NAA $ 9 $ 365 $ 233 $ 341 $ (930)
EA 33 298 131 186 (582)
Cruise Support 0 7 43 33 (82)
Tour and Other 7 12 11 6 (21)
$ 50 $ 681 $ 417 $ 567 $ (1,616)
2020
NAA $ 457 $ 1,631 $ 297 $ 369 $ (2,860) (a)
EA 238 773 126 168 (1,174) (b)
Cruise Support 22 53 61 33 (125)
Tour and Other 24 28 8 7 (19)
$ 740 $ 2,484 $ 492 $ 577 $ (4,177)
(a) Includes $1.0 billion of goodwill impairment charges.
(b) Includes $345 million of goodwill impairment charges.
Six Months Ended May 31,
(in millions) Revenues Operating costs and
expenses Selling
and
administrative Depreciation
and
amortization Operating
income (loss)
2021
NAA $ 19 $ 680 $ 453 $ 676 $ (1,790)
EA 41 496 239 370 (1,064)
Cruise Support 0 15 171 61 (247)
Tour and Other 14 25 17 12 (39)
$ 75 $ 1,216 $ 879 $ 1,119 $ (3,139)
2020
NAA $ 3,597 $ 3,904 $ 697 $ 733 $ (3,056) (c)
EA 1,790 2,090 333 334 (1,743) (d)
Cruise Support 66 (34) 126 64 (91)
Tour and Other 76 47 14 16 0
$ 5,529 $ 6,007 $ 1,170 $ 1,147 $ (4,891)

~~(c) Includes $1.3 billion of goodwill impairment charges.~~

~~(d) Includes $777 million of goodwill impairment charges.~~


	Three Months Ended February 28,
(in millions)	Revenues		Operating costs and expenses		Selling and administrative		Depreciation and amortization		Operating income (loss)
2022
NAA	$	1,126	$	1,288	$	344	$	334	$	(840)
EA	457		698		176		181		(598)
Cruise Support	33		28		5		33		(34)
Tour and Other	8		17		6		5		(20)
	$	1,623	$	2,030	$	530	$	554	$	(1,491)
2021
NAA	$	10	$	316	$	220	$	334	$	(859)
EA	8		198		108		184		(482)
Cruise Support	—		8		129		28		(164)
Tour and Other	7		13		6		6		(18)
	$	26	$	535	$	462	$	552	$	(1,524)

Revenue by geographic areas, which are based on where our guests are sourced, were as follows:
(in millions) Three Months Ended May 31, 2020 Six Months Ended May 31, 2020
North America $ 404 $ 3,051
Europe 250 1,616
Australia and Asia 65 680
Other 21 182
$ 740 $ 5,529


(in millions)	Three Months Ended February 28, 2022
North America	$	1,119
Europe	479
Australia and Asia	8
Other	18
	$	1,623

As a result of the ~~phased resumption of~~pause in our guest cruise operations, ~~we have experienced essentially no~~ revenue data for the three ~~and six~~ months ended ~~May 31,~~February 28, 2021 ~~as a result current year data is not meaningful and~~ is not included in the table.

2120

~~Table of Contents~~

NOTE 7 – Earnings Per Share


		Three Months Ended May 31,				Six Months Ended May 31,					Three Months Ended February 28,
(in millions, except per share data)	(in millions, except per share data)	2021		2020		2021		2020		(in millions, except per share data)	2022		2021
Net income (loss) for basic and diluted earnings per share	Net income (loss) for basic and diluted earnings per share	$	(2,072)	$	(4,374)	$	(4,045)	$	(5,155)	Net income (loss) for basic and diluted earnings per share	$	(1,891)	$	(1,973)
Weighted-average shares outstanding	Weighted-average shares outstanding	1,132		721		1,113		702		Weighted-average shares outstanding	1,137		1,095
Dilutive effect of equity plans	Dilutive effect of equity plans	0		0		0		0		Dilutive effect of equity plans	—		—
Diluted weighted-average shares outstanding	Diluted weighted-average shares outstanding	1,132		721		1,113		702		Diluted weighted-average shares outstanding	1,137		1,095
Basic earnings per share	Basic earnings per share	$	(1.83)	$	(6.07)	$	(3.63)	$	(7.34)	Basic earnings per share	$	(1.66)	$	(1.80)
Diluted earnings per share	Diluted earnings per share	$	(1.83)	$	(6.07)	$	(3.63)	$	(7.34)	Diluted earnings per share	$	(1.66)	$	(1.80)

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

Three Months Ended
May 31, Six Months Ended
May 31,
(in millions) 2021 2020 2021 2020
Equity awards 3 0 3 1
Convertible Notes 54 120 54 60
Total antidilutive securities 57 120 57 61

~~Equity Offering~~

~~In February 2021, we completed a public offering of 40.5 million shares of Carnival Corporation’s common stock at a price per share of $25.10, resulting in net proceeds of $996 million.~~


	Three Months Ended February 28,
(in millions)	2022	2021
Equity awards	3	3
Convertible Notes	52	54
Total antidilutive securities	55	56

NOTE 8 – Supplemental Cash Flow Information


(in millions)	(in millions)	May 31, 2021		November 30, 2020		(in millions)	February 28, 2022		November 30, 2021
Cash and cash equivalents (Consolidated Balance Sheets)	Cash and cash equivalents (Consolidated Balance Sheets)	$	7,067	$	9,513	Cash and cash equivalents (Consolidated Balance Sheets)	$	6,414	$	8,939
Restricted cash included in prepaid expenses and other and other assets	Restricted cash included in prepaid expenses and other and other assets	150		179		Restricted cash included in prepaid expenses and other and other assets	39		38
Total cash, cash equivalents and restricted cash (Consolidated Statements of Cash Flows)	Total cash, cash equivalents and restricted cash (Consolidated Statements of Cash Flows)	$	7,218	$	9,692	Total cash, cash equivalents and restricted cash (Consolidated Statements of Cash Flows)	$	6,452	$	8,976

For the three months ended February 28, 2022 and 2021, we did not have borrowings or repayments of commercial paper with original maturities greater than three months.

~~NOTE 9 – Other Assets~~

We have a minority interest in the White Pass & Yukon Route (“White Pass”) that includes port, railroad and retail operations in Skagway, Alaska. As a result of the effects of COVID-19 on the 2021 Alaska season, we evaluated whether our investment in White Pass was other than temporarily impaired and performed an impairment assessment during the quarter ended February 28, 2021. As a result of our assessment, we recognized an impairment charge of $17 million for our investment in White Pass in other income (expense), net. As of May 31, 2021, our investment in White Pass was $77 million, consisting of $53 million in equity and a loan of $23 million. As of November 30, 2020, our investment in White Pass was $94 million, consisting of $75 million in equity and a loan of $19 million.

We have a minority interest in CSSC Carnival Cruise Shipping Limited (“CSSC-Carnival”), a China-based cruise company which will operate its own fleet designed to serve the Chinese market. Our investment in CSSC-Carnival was $229 million as of May 31, 2021 and $140 million as of November 30, 2020. In December 2019, we sold to CSSC-Carnival a controlling interest in an entity with full ownership of 2 EA segment ships and recognized a related gain of $107 million, included in other operating expenses in our Consolidated Statements of Income (Loss). In April 2021, we sold to CSSC-Carnival our remaining $283 million investment in the minority interest of the same entity.

~~Table of Contents~~

NOTE 109 – Property and Equipment

Ship Sales

~~Since the pause in guest cruise operations,~~During 2022, we ~~have accelerated the removal of~~entered into agreements to sell 2 NAA segment ships ~~which were previously expected to be sold over the ensuing years. During 2021, we~~and completed the sale of 1 ~~NAA~~EA segment ship, which ~~represents~~represent a passenger-capacity reduction of ~~670~~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.

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, 2022, under the Stock Swap Program, we sold 1.3 million of Carnival Corporation’s common stock and repurchased the same amount of Carnival plc ordinary shares, resulting in net proceeds of $2 million, which were used for general corporate purposes. During the three months ended February 28, 2021, there were no sales or repurchases under the Stock Swap Program.

Additionally, during the three months ended February 28, 2022, we sold 0.8 million shares of Carnival Corporation common stock at an average price per share of $20.18, resulting in net proceeds of $15 million.

~~Table of Contents~~

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, as amended. All statements other than statements of historical facts are statements that could be deemed forward-looking. These statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and the beliefs and assumptions of our management. We have tried, whenever possible, to identify these statements by using words like “will,” “may,” “could,” “should,” “would,” “believe,” “depends,” “expect,” “goal,” “aspiration,” “anticipate,” “forecast,” “project,” “future,” “intend,” “plan,” “estimate,” “target,” “indicate,” “outlook,” and similar expressions of future intent or the negative of such terms.

Forward-looking statements include those statements that relate to our outlook and financial position including, but not limited to, statements regarding:


•Pricing			•Goodwill, 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

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 amplified by and will continue to be amplified by, or in the future may be amplified by, ~~the COVID-19 outbreak.~~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, which impacts our ability to obtain acceptable financing to fund resulting reductions in cash from~~ operations. The current, and uncertain future, impact of ~~the~~ COVID-19, ~~outbreak,~~ 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.

•~~As a result~~Events and conditions around the world, including war and other military actions, such as the current invasion of ~~the COVID-19 outbreak, we may be out of compliance with one or more maintenance covenants in certain of our debt facilities, with the next testing date of November 30, 2022.~~

•~~World events~~Ukraine, and other general concerns impacting the ability or desire of people to travel have and may ~~continue to~~ lead to a decline in demand for cruises.

•Incidents concerning our ships, guests or the cruise vacation industry ~~as well as adverse weather conditions and other natural disasters~~ have in the past and may, in the future, impact the satisfaction of our guests and crew and lead to reputational damage.

•Changes in and non-compliance with laws and regulations under which we operate, such as those relating to health, environment, safety and security, data privacy and protection, anti-corruption, economic sanctions, trade protection and tax have in the past and may, in the future, lead to 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 severity of adverse weather conditions could adversely affect our business.

•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 system networks ~~including the recent ransomware incidents,~~ 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 and~~or retain qualified shoreside and shipboard ~~personnel who live away from home for extended periods of time may adversely impact~~employees and increased labor costs could have an adverse effect on our business ~~operations, guest services~~ and ~~satisfaction.~~results of operations.

•Increases in fuel prices, changes in the types of fuel consumed and availability of fuel supply may adversely impact our scheduled itineraries and costs.

•We rely on supply chain vendors who are integral to the operations of our businesses. These vendors and service providers 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.

~~Table of Contents~~

•Overcapacity and competition in the cruise and land-based vacation industry may lead to a decline in our cruise sales, pricing and destination options.

•Inability to implement our shipbuilding programs and ship repairs, maintenance and refurbishments may adversely impact our business operations and the 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.

~~Recent Developments~~

~~Resumption of Guest Operations~~

The company is uniquely positioned for its phased resumption in cruise travel given its multiple brands which are being restarted independently and tailored to the environment of their respective source market. Eight of the company’s nine brands either have resumed or have announced they plan to resume guest cruise operations by the company's fiscal year end, November 30, 2021. 27 ships, or approximately 35% of capacity, have resumed or are announced to resume by the end of the third quarter of 2021 and an additional 15 ships, or nearly 20% of capacity, are announced to resume by the end of the fourth quarter of 2021. Together these 42 ships represent over 50% of capacity. More announcements are expected in the coming weeks which are expected to include additional ship restarts for fiscal year 2021. Consistent with the company's planned phased resumption of guest cruise operations, it expects to have its full fleet back in operation in the spring of 2022.

The company has been working with a number of world-leading public health, epidemiological and policy experts to support its ongoing efforts to implement enhanced health and safety protocols to help protect against and mitigate the impact of COVID-19 during cruise vacations. Initial cruises are taking place with guidance from the company's roster of medical and scientific experts and enhanced health protocols developed in conjunction with government and health authorities. Consequently, the company's brands have a comprehensive set of health and hygiene protocols that facilitate a safe and healthy return to cruise vacations. These enhanced protocols are modeled after shoreside health and mitigation guidelines as provided by each brand's respective country, and approved by all relevant regulatory authorities. Protocols will be updated based on evolving scientific and medical knowledge related to mitigation strategies.

~~Update on Liquidity and Refinancing~~

~~Refer to "Liquidity, Financial Condition and Capital Resources."~~

~~Refer to "Risk factors" - "~~COVID-19 has had, and is expected to continue to have, a significant impact on our financial condition and operations, which impacts our ability to obtain acceptable financing to fund resulting reductions in cash from operations. The current, and uncertain future, impact of the COVID-19 outbreak, 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."

New Accounting Pronouncements

Refer to Note 1 - “General, Accounting Pronouncements” of the consolidated financial statements for 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.

~~Table of Contents~~

Seasonality

Our passenger ticket revenues are seasonal. Historically, demand for cruises has been greatest during our third quarter, which includes the Northern Hemisphere summer ~~months, although 2021 will continue to be adversely impacted by COVID-19.~~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. This historical trend ~~has been~~was disrupted in 2020 by the pause and ~~phased~~in 2021 by the ongoing resumption of 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 ~~Alaska's~~Alaska’s cruise season. ~~During 2021, the Alaska cruise season will continue to be adversely impacted by the effects of COVID-19.~~

Known Trends and Uncertainties

We believe the increasing cost of fuel, liquefied natural gas (LNG) and other related costs are reasonably likely to impact our profitability in both the short and long-term. This effect is increased in the shorter term by the current invasion of Ukraine, including its effect on the price of fuel. In addition, 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, if enacted. The full impact of climate change to our business is not yet known.

Statistical Information


		Three Months Ended May 31,				Six Months Ended May 31,					Three Months Ended February 28,
		2021		2020		2021		2020			2022			2021
Passenger Cruise Days (“PCDs”) (in thousands) (a)										Passenger Cruise Days (“PCDs”) (in thousands) (a)	7,229			27
Available Lower Berth Days (“ALBDs”) (in thousands) (b)										Available Lower Berth Days (“ALBDs”) (in thousands) (b)	13,322			173
Occupancy percentage (c)										Occupancy percentage (c)	54		%	16		%
Passengers carried (in thousands)										Passengers carried (in thousands)	1,011			5
Fuel consumption in metric tons (in thousands)	Fuel consumption in metric tons (in thousands)	246		482		508		1,314		Fuel consumption in metric tons (in thousands)	566			262
Fuel cost per metric ton consumed	Fuel cost per metric ton consumed	$	467	$	418	$	428	$	455	Fuel cost per metric ton consumed	$	648		$	392

Currencies (USD to 1)	Currencies (USD to 1)									Currencies (USD to 1)
AUD	AUD	$	0.77	$	0.63	$	0.77	$	0.66	AUD	$	0.72		$	0.77
CAD	CAD	$	0.81	$	0.72	$	0.80	$	0.74	CAD	$	0.79		$	0.78
EUR	EUR	$	1.20	$	1.09	$	1.21	$	1.10	EUR	$	1.13		$	1.21
GBP	GBP	$	1.39	$	1.24	$	1.38	$	1.27	GBP	$	1.35		$	1.36
RMB		$	0.15	$	0.14	$	0.15	$	0.14

~~We paused our guest cruise operations in mid-March 2020 and have been in a pause for a majority of 2020 and the first half of 2021.~~ The ~~phased~~ongoing resumption of guest cruise operations is continuing to have a material impact on all aspects of our ~~business.~~business, including the above statistical information.

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.

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Results of Operations


Consolidated	Consolidated																						Consolidated
		Three Months Ended May 31,						% increase (decrease)			Six Months Ended May 31,										% increase (decrease)			Three Months Ended February 28,							% increase (decrease)
(in millions)	(in millions)	2021		2020		Change				2021			2020			Change			(in millions)	2022					2021			Change
Revenues	Revenues																									Revenues
Passenger ticket	Passenger ticket	$	20	$	446	$	(426)	(95)	%		$	23		$	3,680		$	(3,657)			(99)	%	Passenger ticket	$	873		$	3	$	870	31,952	%
Onboard and other	Onboard and other	29		294		(265)		(90)	%		52			1,849			(1,797)				(97)	%	Onboard and other	750			23		727		3,193	%
		50		740		(691)		(93)	%		75			5,529			(5,454)				(99)	%		1,623			26		1,598		6,263	%
Operating Costs and Expenses	Operating Costs and Expenses																						Operating Costs and Expenses
Commissions, transportation and other	Commissions, transportation and other	22		297		(275)		(93)	%		37			1,064			(1,027)				(97)	%	Commissions, transportation and other	251			15		236		1,596	%
Onboard and other	Onboard and other	15		114		(99)		(87)	%		22			585			(563)				(96)	%	Onboard and other	209			7		202		2,884	%
Payroll and related	Payroll and related	241		705		(463)		(66)	%		460			1,315			(855)				(65)	%	Payroll and related	506			218		287		132	%
Fuel	Fuel	113		201		(88)		(44)	%		216			598			(382)				(64)	%	Fuel	365			103		262		256	%
Food	Food	17		108		(91)		(84)	%		28			385			(357)				(93)	%	Food	136			11		124		1,090	%
Ship and other impairments	Ship and other impairments	49		589		(539)		(92)	%		49			919			(870)				(95)	%	Ship and other impairments	8			—		8		100	%
Other operating	Other operating	224		471		(247)		(52)	%		404			1,142			(737)				(65)	%	Other operating	557			181		376		208	%
		681		2,484		(1,803)		(73)	%		1,216			6,007			(4,791)				(80)	%		2,030			535		1,495		280	%

Selling and administrative	Selling and administrative	417		492		(75)		(15)	%		879			1,170			(291)				(25)	%	Selling and administrative	530			462		68		15	%
Depreciation and amortization	Depreciation and amortization	567		577		(10)		(2)	%		1,119			1,147			(28)				(2)	%	Depreciation and amortization	554			552		2		—	%
Goodwill impairment		—		1,364		(1,364)		(100)	%		—			2,096			(2,096)				(100)	%

		1,665		4,918		(3,252)		(66)	%		3,214			10,420			(7,206)				(69)	%		3,114			1,549		1,565		101	%
Operating Income (Loss)	Operating Income (Loss)	$	(1,616)	$	(4,177)	$	2,562	(61)	%		$	(3,139)		$	(4,891)		$	1,751			(36)	%	Operating Income (Loss)	(1,491)			(1,524)		32		(2)	%
Nonoperating Income (Expense)																							Nonoperating Income (Expense)
Interest income																							Interest income	3			3		—		1	%
Interest expense, net of capitalized interest																							Interest expense, net of capitalized interest	(368)			(398)		30		(7)	%
Gains (losses) on debt extinguishment, net																							Gains (losses) on debt extinguishment, net	—			2		(2)		(100)	%
Other income (expense), net																							Other income (expense), net	(32)			(62)		30		(49)	%
																								(397)			(455)		58		(13)	%
Income (Loss) Before Income Taxes																							Income (Loss) Before Income Taxes	$	(1,888)		$	(1,979)	$	91	(5)	%

NAA
Three Months Ended
May 31, % increase (decrease) Six Months Ended May 31, % increase (decrease)
(in millions) 2021 2020 Change 2021 2020 Change
Revenues
Passenger ticket $ 2 $ 271 $ (269) (99) % $ 1 $ 2,324 $ (2,322) (100) %
Onboard and other 7 185 (178) (96) % 18 1,274 (1,256) (99) %
9 457 (448) (98) % 19 3,597 (3,578) (99) %
Operating Costs and Expenses 365 1,631 (1,266) (78) % 680 3,904 (3,224) (83) %
Selling and administrative 233 297 (64) (22) % 453 697 (244) (35) %
Depreciation and amortization 341 369 (28) (8) % 676 733 (57) (8) %
Goodwill impairment — 1,019 (1,019) (100) % — 1,319 (1,319) (100) %
939 3,316 (2,377) (72) % 1,809 6,653 (4,845) (73) %
Operating Income (Loss) $ (930) $ (2,860) $ 1,929 (67) % $ (1,790) $ (3,056) $ 1,266 (41) %


NAA
	Three Months Ended February 28,						% increase (decrease)
(in millions)	2022		2021		Change
Revenues
Passenger ticket	$	586	$	—	$	586	100	%
Onboard and other	540		11		529		4,894	%
	1,126		10		1,115		10,747	%

Operating Costs and Expenses	1,288		316		972		308	%
Selling and administrative	344		220		124		56	%
Depreciation and amortization	334		334		—		—	%

	1,966		870		1,096		126	%
Operating Income (Loss)	$	(840)	$	(859)	$	19	(2)	%

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EA	EA																						EA
		Three Months Ended May 31,						% increase (decrease)			Six Months Ended May 31,										% increase (decrease)			Three Months Ended February 28,							% increase (decrease)
(in millions)	(in millions)	2021		2020		Change				2021			2020			Change			(in millions)	2022					2021			Change
Revenues	Revenues																									Revenues
Passenger ticket	Passenger ticket	$	19	$	184	$	(166)	(90)	%		$	22		$	1,397		$	(1,375)			(98)	%	Passenger ticket	$	341		$	3	$	338	10,721	%
Onboard and other	Onboard and other	15		54		(39)		(73)	%		19			393			(373)				(95)	%	Onboard and other	116			5		111		2,237	%
		33		238		(205)		(86)	%		41			1,790			(1,749)				(98)	%		457			8		449		5,542	%

Operating Costs and Expenses	Operating Costs and Expenses	298		773		(475)		(61)	%		496			2,090			(1,594)				(76)	%	Operating Costs and Expenses	698			198		500		253	%
Selling and administrative	Selling and administrative	131		126		5		4	%		239			333			(94)				(28)	%	Selling and administrative	176			108		68		63	%
Depreciation and amortization	Depreciation and amortization	186		168		18		11	%		370			334			36				11	%	Depreciation and amortization	181			184		(3)		(2)	%
Goodwill impairment		—		345		(345)		(100)	%		—			777			(777)				(100)	%

		615		1,412		(797)		(56)	%		1,105			3,533			(2,428)				(69)	%		1,055			490		565		115	%
Operating Income (Loss)	Operating Income (Loss)	$	(582)	$	(1,174)	$	592	(50)	%		$	(1,064)		$	(1,743)		$	679			(39)	%	Operating Income (Loss)	$	(598)		$	(482)	$	(116)	24	%

We paused our guest cruise operations in ~~mid-March~~March 2020. As of ~~May 31, 2021, five of our ships were operating with guests onboard. Eight~~February 28, 2022, eight of our nine brands ~~either have~~had resumed ~~or are announced to resume~~ guest cruise operations ~~by November 30, 2021,~~ as part of our ~~phased~~ongoing return to service. The ~~phased~~ongoing resumption of guest cruise operations ~~is continuing to have~~and the increased uncertainty given the current invasion of Ukraine, including its effect on the price of fuel, are collectively having a material negative impact on all aspects of our business, including our liquidity, financial position and results of ~~operations~~. operations. The full extent of the impact will be determined by our ~~phased~~ongoing return to service and the length of time COVID-19 influences travel decisions.

As ~~a result~~ of ~~the phased resumption~~February 28, 2022, 71% of our capacity had resumed guest cruise operations and ALBDs increased to 13 million compared to February 28, 2021 when we ~~have experienced essentially~~had no ~~revenue~~ships operating with guests onboard. Revenues for the three ~~and six~~ months ended ~~May 31, 2021. This has resulted in operating losses~~February 28, 2022 increased by $1.6 billion from the three months ended February 28, 2021, due to the resumption of guest cruise operations and the significant increase of ships returning to service. Occupancy for the ~~current periods~~three months ended February 28, 2022 was 54%.

Operating costs and expenses increased by $1.5 billion to $2.0 billion in 2022 from $0.5 billion in 2021. This was driven by our ongoing resumption of 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 and inflation. We anticipate that many of these costs and expenses will end in 2022 and will not reoccur in 2023.

Fuel costs increased by $262 million to $365 million in 2022 from $103 million in 2021. The increase was caused by higher fuel consumption of 304 thousand metric tons, due to the resumption of guest cruise operations, and an increase in fuel prices of $256 per metric ton consumed in 2022 compared to 2021.

We recognized ship impairment charges of $8 million for the three months ended February 28, 2022. There were no ship impairment charges for the three months ended February 28, 2021.

We continue to expect a net loss ~~on both a U.S. GAAP and adjusted basis~~ for the second quarter of 2022. However, we expect a profit for the third quarter of ~~2021 and~~2022. For the full year ~~ending November 30, 2021~~.

While maintaining compliance, environmental protection and safety, we significantly reduced ship operating expenses, including cruise payroll and related expenses, food, fuel, insurance and port charges by transitioning ships into paused status, either at anchor or in port and staffed at a safe manning level. ~~As we continue to resume guest cruise operations,~~2022, we expect ~~to incur incremental spend relating to bringing our ships out of pause status, returning crew members to our ships and implementing enhanced health and safety protocols.~~

~~There were no goodwill impairment charges for the six months ended May 31, 2021. For the three and six months ended May 31, 2020, we recognized goodwill impairment charges of $1.4 billion~~ ~~and $2.1 billion.~~

~~We recognized~~ a ~~ship impairment charge of $49 millionfor the three and six months ended May 31, 2021 and ship impairment charges of $498 million and $828 million for the three and six months ended May 31, 2020.~~net loss.

Nonoperating Income (Expense)

Interest expense, net of capitalized interest, ~~increased~~decreased by ~~$256~~$30 million to ~~$437~~$368 million in ~~2021~~2022 from ~~$182~~$398 million in ~~2020.~~2021. The ~~increase~~decrease was caused by ~~additional debt borrowings with higher~~a lower average interest ~~rates since~~rate for the ~~pause in guest cruise operations.~~three months ended February 28, 2022 compared to the three months ended February 28, 2021 as a result of completed refinancing efforts.

~~Table of Contents~~

~~Key Performance Non-GAAP Financial Indicators~~

~~The table below reconciles Adjusted net income (loss) and Adjusted EBITDA to Net income (loss) and Adjusted earnings per share to Earnings per share for the periods presented:~~

Three Months Ended
May 31, Six Months Ended
May 31,
(in millions, except per share data) 2021 2020 2021 2020
Net income (loss)
     U.S. GAAP net income (loss) $ (2,072) $ (4,374) $ (4,045) $ (5,155)
     (Gains) losses on ship sales and impairments 36 1,953 39 2,882
     Restructuring expenses 3 39 3 39
     Other (2) — 13 3
     Adjusted net income (loss) $ (2,036) $ (2,382) $ (3,990) $ (2,231)
     Interest expense, net of capitalized interest 437 182 835 237
     Interest income (4) (6) (7) (11)
     Income tax expense, net 12 (11) 6 —
     Depreciation and amortization 567 577 1,119 1,147
     Adjusted EBITDA $ (1,023) $ (1,640) $ (2,037) $ (859)
Weighted-average shares outstanding 1,132 721 1,113 702
Earnings per share
     U.S. GAAP diluted earnings per share $ (1.83) $ (6.07) $ (3.63) $ (7.34)
     (Gains) losses on ship sales and impairments 0.03 2.71 0.03 4.10
     Restructuring expenses — 0.05 — 0.06
     Other — — 0.01 —
     Adjusted earnings per share $ (1.80) $ (3.30) $ (3.58) $ (3.18)

~~Explanations of Non-GAAP Financial Measures~~

We use adjusted net income (loss) 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 net income (loss) and U.S. GAAP diluted earnings per share.

We believe that gains and losses on ship sales, impairment charges, restructuring costs and other gains and losses 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 these items to be excluded from our net income (loss) and earnings per share and, accordingly, we present adjusted net income (loss) and adjusted earnings per share excluding these items.

Adjusted EBITDA is a non-GAAP measure, and we believe that the presentation of Adjusted EBITDA provides additional information to investors about our operating profitability adjusted for certain non-cash items and other gains and expenses that we believe are not part of our core operating business and are not an indication of our future earnings performance. Further, we believe that the presentation of Adjusted EBITDA provides additional information to investors about our ability to operate our business in compliance with the restrictions set forth in our debt agreements. We define Adjusted EBITDA as adjusted net income (loss) adjusted for (i) interest, (ii) taxes and (iii) depreciation and amortization. There are material limitations to using Adjusted EBITDA. Adjusted EBITDA does not take into account certain significant items that directly affect our net income (loss). These limitations are best addressed by considering the economic effects of the excluded items independently, and by considering Adjusted EBITDA in conjunction with net income (loss) as calculated in accordance with U.S. GAAP.

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.

~~Table of Contents~~

Liquidity, Financial Condition and Capital Resources

As of ~~May 31, 2021,~~February 28, 2022, we had ~~$9.3~~$7.2 billion of liquidity including cash, short-term investments and ~~short-term investments.~~ ~~We have taken significant actions to preserve cash and obtain additional financing to increase~~borrowings available under our ~~liquidity.~~Revolving Facility. WeDuring 2022, we will continue to ~~focus~~be focused on pursuing ~~additional~~ refinancing opportunities to reduce interest ~~expense~~rates and extend ~~maturities.~~ S~~ince December 2020, we have completed the following:~~maturities as well as entering into supplemental agreements to align our covenant compliance requirements.

•
~~In December 2020, we borrowed $1.5~~

We had a working capital deficit of $2.9 billion ~~under export credit facilities due in semi-annual installments through 2033.~~

•In February 2021, we issued an aggregate principal amount of $3.5 billion under the 2027 Senior Unsecured Notes that mature on March 1, 2027. The 2027 Senior Unsecured Notes bear interest at a rate of 5.8% per year.

•~~In February 2021, we completed a public offering of 40.5 million shares of Carnival Corporation’s common stock at a price per share of $25.10, resulting in net proceeds of $996 million.~~

•During the first quarter of 2021, we obtained waivers of compliance with the Interest Coverage Covenant and Debt to Capital Covenant in our export credit facilities through August 31, 2022 (with the next testing date of November 30, 2022) or November 30, 2022 (with the next testing dateas of February 28, 2023) for our funded export credit facilities with aggregate indebtedness of $8.8 billion as of May 31, 2021 and unfunded export credit facilities with an aggregate principal amount of $6.5 billion as of May 31, 2021.

•During the first quarter of 2021 we entered into supplemental agreements with respect to our Revolving Credit Facility and many of our bank loans. Under our Revolving Credit Facility and many of our bank loans, we are now required to maintain the Interest Coverage Covenant from February 28, 2023, at a ratio of not less than 2.0 to 1.0 for the February 28, 2023 and May 31, 2023 testing dates, 2.5 to 1.0 for the August 31, 2023 and November 30, 2023 testing dates, and 3.0 to 1.0 from the February 28, 2024 testing date onwards, or through their respective maturity dates, and the Debt to Capital Covenant at the end of each fiscal quarter before the November 30, 2021 testing date at a percentage not to exceed 65%. From the November 30, 2021 testing date until the May 31, 2023 testing date the Debt to Capital Covenant is 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.

•The relevant export credit agencies have provided approval in principle to defer approximately $1.0 billion of principal payments that would otherwise have been due over a one year period with repayments to be made over the following five years. In connection with these deferrals, we are negotiating modifications of certain financial covenant thresholds for certain future periods. We expect to enter into supplemental agreements during the third quarter of 2021 to complete these transactions. In connection with such supplemental agreements, additional subsidiary guarantees will be granted.

~~Certain of our debt instruments contain provisions that may limit our ability to incur or guarantee additional indebtedness.~~

Our monthly average cash burn rate for the first half of 2021 was $500 million, which was better than forecasted primarily due to the timing of proceeds from ship sales and working capital changes. This monthly average cash burn rate includes revenues earned on voyages, ongoing ship operating and administrative expenses, restart spend, working capital changes (excluding changes in customer deposits), interest expense and capital expenditures (net of export credit facilities), and excludes scheduled debt maturities as well as other cash collateral to be provided (which may increase in the future). As we continue to resume guest cruise operations, we expect to incur incremental spend relating to bringing our ships out of pause status, returning crew members to our ships and implementing enhanced health and safety protocols. We have identified and implemented actions to optimize our ongoing monthly cash burn rate and we will continue to do so.

~~We had working capital of $1.4 billion as of May 31, 2021~~2022 compared to working capital deficit of ~~$1.9~~$0.3 billion as of November 30, ~~2020.~~2021. The ~~decrease~~increase in working capital deficit was ~~driven by~~substantially all due to a decrease in ~~cash and short-term investments.~~cash. Historically, during our normal operations, 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, make long-term investments or any other use of cash. Included within our working capital are ~~$2.0~~$3.4 billion and ~~$1.9~~$3.1 billion of customer deposits as of ~~May 31, 2021~~February 28, 2022 and November 30, ~~2020,~~2021, respectively. We have paid ~~and expect to continue to pay cash~~ refunds of customer deposits with respect to a portion of cancelled cruises. The amount of any future cash refunds ~~to be paid~~ may depend on ~~the level of guest acceptance of FCCs and~~ future cruise ~~cancellations.~~cancellations and guest rebookings. We ~~record~~have agreements with a ~~liability for FCCs only~~number of credit card processors that transact customer deposits related to our cruise vacations. Certain of these agreements allow the ~~extent~~credit card processors to request, under certain circumstances, that we ~~have received cash from guests with bookings on cancelled sailings.~~provide a reserve fund in cash. In addition, we have a relatively low-level of accounts receivable and limited investment in inventories. We expect that we will have working capital deficits in the future once we return to normal guest cruise operations.

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Refer to Note 1 - “General, Liquidity and ~~Management's~~Management’s Plans” of the consolidated financial statements for additional discussion regarding our liquidity.

Sources and Uses of Cash

Operating Activities

Our business used ~~$2.9~~$1.2 billion of net cash flows in operating activities during the ~~six~~three months ended ~~May 31, 2021,~~February 28, 2022, a decrease of ~~$1.1~~$0.3 billion, compared to ~~$1.8~~$1.5 billion of net cash flows used for the same period in ~~2020.~~2021.

Investing Activities

During the ~~six~~three months ended ~~May 31, 2021,~~February 28, 2022, net cash used in investing activities was ~~$4.2~~$3.0 billion. This was driven by the following:

•Capital expenditures of ~~$2.0~~$2.5 billion for our ongoing new shipbuilding program

•Capital expenditures of ~~$168~~$221 million for ship improvements and replacements, information technology and buildings and improvements

•Proceeds from sale of ships and other of ~~$324~~$18 million

•Purchases of short-term investments of ~~$2.7 billion~~

•~~Proceeds from maturity of short-term investments of $467~~$315 million

During the ~~six~~three months ended ~~May 31, 2020,~~February 28, 2021, net cash used in investing activities was ~~$1.3~~$3.6 billion. This was driven by the following:

•Capital expenditures of ~~$915 million~~$1.7 billion for our ongoing new shipbuilding program

•Capital expenditures of ~~$753~~$81 million for ship improvements and replacements, information technology and buildings and improvements

•~~Proceeds from sale~~Purchases of ~~ships~~short-term investments of ~~$236 million~~

•~~Proceeds of $220 million from the settlement of outstanding derivatives~~$1.8 billion

Financing Activities

During the ~~six~~three months ended ~~May 31,~~February 28, 2022, net cash provided by financing activities of $1.7 billion was caused by the following:

•Issuances of $2.3 billion of long-term debt

•Repayments of $0.5 billion of long-term debt

•Payments of $85 million related to debt issuance costs

•Net repayments of short-term borrowings of $48 million

•Purchases of $23 million of Carnival plc ordinary shares and issuances of $27 million of Carnival Corporation common stock under our Stock Swap Program

During the three months ended February 28, 2021, net cash provided by financing activities of ~~$4.5~~$5.2 billion was caused by the following:

•Repayments of ~~$1.4 billion~~$668 million of long-term debt

•Issuances of $5.0 billion of long-term debt, including net proceeds of $3.4 billion from the issuance of the 2027 Senior Unsecured Notes

•Net proceeds of $996 million from our public ~~equity offering of Carnival Corporation common stock~~

~~During the six months ended May 31, 2020, net cash provided by financing activities of $9.4 billion was caused by the following:~~

•Net proceeds from short-term borrowings of $3.3 billion in connection with our availability of, and needs for, cash at various times throughout the period, including proceeds of $3.0 billion from the Revolving Facility

•~~Repayments of $383 million of long-term debt~~

•Issuances of $6.7 billion of long-term debt, including net proceeds of $3.9 billion from the issuance of the 2023 Secured Notes and net proceeds of $2.0 billion from the issuance of the Convertible Notes

•~~Payments of cash dividends of $689 million~~

•~~Purchases of $12 million of Carnival plc ordinary shares in open market transactions under our Repurchase Program~~

•~~Net proceeds of $556 million from our public~~ offering of Carnival Corporation common stock

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Funding Sources

As of ~~May 31, 2021,~~February 28, 2022, we had ~~$9.3~~$7.2 billion of liquidity including cash, short-term investments and ~~short-term investments.~~borrowings available under our revolving facility. In addition, we had ~~$6.5~~$3.3 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 not funded by our export credit facilities.

(in billions) 2021 2022 2023 2024
Future export credit facilities at May 31, 2021 (a) $ 0.5 $ 3.5 $ 1.9 $ 0.6


(in billions)	2022		2023		2024
Future export credit facilities at February 28, 2022	$	0.9	$	1.8	$	0.6

~~(a)Under the terms of these~~Our export credit facilities we are required to comply with the Interest Coverage Covenant and the Debt to Capital Covenant, among others. We entered into supplemental agreements to waive compliance with the Interest Coverage Covenant and the Debt to Capital Covenant for our unfunded export credit facilities through August 31, 2022 or November 30, 2022, as applicable. We will be required to comply beginning with the next testing date of November 30, 2022 or February 28, 2023, as applicable.

~~Many of our debt agreements~~ contain various ~~other~~ financial covenants ~~including those~~as described in Note 3 - “Debt” ~~and in Note 5 - “Debt” in the annual consolidated financial statements, which are included within our Form 10-K.~~. At ~~At May 31, 2021,~~February 28, 2022, we were in compliance with the applicable covenants under our debt agreements.

Off-Balance Sheet Arrangements

We are not a party to any off-balance sheet arrangements, including guarantee contracts, retained or contingent interests, certain derivative instruments and variable interest entities that either have, or are reasonably likely to have, a current or future material effect on our consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

For a discussion of our hedging strategies and market risks, see the discussion below and Note 10 - “Fair Value Measurements, Derivative Instruments and Hedging 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.

Interest Rate Risks

The composition of our debt, including the effect of cross currency swaps and interest rate swaps, was as follows:


	~~May 31, 2021~~February 28, 2022
Fixed rate	4942	%
EUR fixed rate	1317	%
Floating rate	2025	%
EUR floating rate	1715	%
GBP floating rate	21	%

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 ~~Executive~~Climate Officer and our Chief Financial Officer and Chief Accounting Officer have evaluated our disclosure controls and procedures and have concluded, as of ~~May 31, 2021,~~February 28, 2022, that they are effective at a reasonable level of assurance, as described above.

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B. Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended ~~May 31, 2021~~February 28, 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.

The legal proceedings described in Note 4 – “Contingencies and Commitments” of our consolidated financial statements, including those described under “COVID-19 ~~Actions,~~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 will exceed $1 million for such proceedings. ~~We are not aware of any environmental proceedings that exceed this threshold for the quarter ending May 31, 2021.~~

Item 1A. Risk Factors.

The risk factors in this Form 10-Q below should be carefully considered, including the risk factors discussed in “Risk Factors” and other risks discussed in our Form 10-K. These risks could materially and adversely affect our results, operations, outlooks, plans, goals, growth, reputation, cash flows, liquidity, and stock price. Our business also could be affected by risks that we are not presently aware of or that we currently consider immaterial to our operations.

~~COVID-19 and Liquidity/Debt Related~~Operating Risk Factors

•~~COVID-19 has had,~~Events and ~~is expected to continue to have, a significant impact on our financial condition~~conditions around the world, including war and ~~operations, which impacts our ability to obtain acceptable financing to fund resulting reductions in cash from operations. The~~other military actions, such as the current invasion of Ukraine, and ~~uncertain future, impact of the COVID-19 outbreak, including its effect on~~other general concerns impacting the ability or desire of people to travel ~~(including on cruises), is expected~~have and may lead to ~~continue to impact our results, operations, outlooks, plans, goals, reputation, litigation, cash flows, liquidity, and stock price.~~a decline in demand for cruises.

The COVID-19 global pandemic is having material negative impacts on all aspects of our business. We implemented a pause of our guest cruise operations in mid-March 2020 across all brands. As of May 31, 2021, five of our ships were operating with guests onboard as part of our phased return to service. We have been, and ~~will~~may continue to be, ~~negatively~~ impacted by travel bans and advisories, and evolving, conflicting and complex restrictions, recommendations and regulations set by various governmental authorities. These restrictions, recommendations and regulations have and may continue to impact our ability to operate our business in an optimal manner.

As we continue to resume guest cruise operations, we expect to incur incremental spend relating to bringing our ships out of pause status, returning crew members to our ships and implementing enhanced health and safety protocols. The industry is subject to and may be further subject to enhanced health and hygiene requirements in attempts to counteract future outbreaks, and these requirements may be costly, take a significant amount of time to implement across our global cruise operations, and may result in disruptions in guest cruise operations, incremental costs and loss of revenue.

We intend to make vaccines available to all of our crew but there can be no assurances that we will be able to source sufficient vaccines for our global crew. In addition, although vaccines have proven to be effective in mitigating this risks of continued spread of COVID-19, there is no guarantee that the vaccines will continue to be effective against future variants.

Due to the outbreak of COVID-19 on some of our ships, and the resulting illness and loss of life in certain instances, we have been the subject of negative publicity, which could have a long term impact on the appeal of our brands, which would diminish demand for vacations on our vessels. We cannot predict how long the negative impact of media attention on our brands will last, or the level of investment that will be required to address the concerns of potential travelers through marketing and pricing actions.

We have received, and may continue to receive, lawsuits, other governmental investigations and other actions stemming from COVID-19. We cannot predict the quantum or outcome of any such proceedings, some of which could result in the imposition of civil and criminal penalties in the future, and the impact that they will have on our financial results, but any such impact may be material. We also remain subject to extensive, complex, and closely monitored obligations under the court-ordered environmental compliance plan supervised by the U.S. District Court for the Southern District of Florida, as a result of the previously disclosed settlement agreement relating to the violation of probation conditions for a plea agreement entered into by Princess Cruises and the U.S. Department of Justice in 2016. We remain fully committed to satisfying those obligations.

We have insurance coverage for certain liabilities, costs and expenses related to COVID-19 through our participation in Protection and Indemnity (“P&I”) clubs, including coverage for direct and incremental costs including, but not limited to, certain quarantine expenses and for certain liabilities to passengers and crew. P&I clubs are mutual indemnity associations

~~Table of Contents~~

owned by members. There is a $10 million deductible per occurrence (meaning per outbreak on a particular ship). We cannot provide assurance that we will receive insurance proceeds that will compensate us fully for our liabilities, costs and expenses that exceed the $10 million deductible under these policies. We have no insurance coverage for loss of revenues or earnings from our ships or other operations.

In connection with our capacity optimization strategy, we have accelerated the removal of ships from our fleet which were previously expected to be sold over the ensuing years. We have sold, expect to sell or have agreements for the disposal of various vessels. Some of these agreements for the disposal of vessels have been for recycling. When we choose to dispose of a ship, there can be no assurance that there will be a viable buyer to purchase it at a price that exceeds our net book value, which could result in ship impairment charges and losses on ship disposals.

~~The effects of COVID-19 on the operations of shipyards where our ships are under construction have resulted in delays in ship deliveries.~~

We cannot predict the timing of our complete return to service at historical occupancy and pricing levels and when various ports will reopen to our ships. If our phased resumption of guest cruise operations is delayed or there are future pauses or disruptions in the resumption of guest cruise operations, it could further negatively impact our liquidity. As our business is seasonal, the impact of such a delay or future pause in the resumption of guest cruise operations will be heightened if such delay or future pause occurs during the Northern Hemisphere summer months. Moreover, even as travel advisories and restrictions are lifted, demand for cruises may be impacted for a significant length of time and we cannot predict if and when each brand will return to pre-outbreak demand or fare pricing. In particular, our bookings may be negatively impacted by the adverse changes in the perceived or actual economic climate, including higher unemployment rates, declines in income levels and loss of personal wealth resulting from the impact of COVID-19. In addition, we cannot predict the impact COVID-19 will have on our partners, such as travel agencies, suppliers and other vendors, counterparties and joint ventures. We may be adversely impacted as a result of the adverse impact our partners, counterparties and joint ventures suffer.

We have never previously experienced a complete cessation of our guest cruise operations, and as a consequence, our ability to be predictive regarding the impact of such a cessation on our brands and future prospects is uncertain. In particular, we cannot predict the impact on our financial performance and cash flows (including as required for cash refunds of deposits) as a result of the phased resumptions in our guest cruise operations and the public’s concern regarding the health and safety of travel, especially by cruise ship, and related decreases in demand for travel and cruising. Moreover, our ability to attract and retain guests and our ability to hire and the amounts we must pay our crew depends, in part, upon the perception and reputation of our company and our brands and the public’s concerns regarding the health, safety and ~~safety~~security of travel, ~~generally, as well as regarding~~including government travel advisories and travel restrictions, political instability and civil unrest, terrorist attacks, war and military action, most recently the ~~cruising industry and our ships specifically. In addition, our ability to re-hire crew may be negatively impacted as some have obtained alternative employment during the pause.~~

~~Our access to and cost~~current invasion of financing depends on, among other things, global economic conditions, conditions in the global financing markets, the availability of sufficient amounts of financing, our prospects and our credit ratings. As a result of COVID-19's effects on our operations, Moody's and S&P Global downgraded our credit ratings to be non-investment grade. If our credit ratings were to be further downgraded, or general market conditions were to ascribe higher risk to our rating levels, our industry, or us, our access to capital and the cost of any debt or equity financing will be further negatively impacted. In addition, the terms of future debt agreements could include more restrictive covenants, or require incremental collateral, which may further restrict our business operations or be unavailable due to our covenant restrictions then in effect. There is no guarantee that debt or equity financings will be available in the future to fund our obligations, or that they will be available on terms consistent with our expectations. Additionally, the impact of COVID-19 on the financial markets may adversely impact our ability to raise funds.

Ukraine,

In addition, the COVID-19 outbreak has significantly increased economic and demand uncertainty. The effects of COVID-19 have caused a global recession, which could have a further adverse impact on our financial condition and operations. In past recessions, demand for our cruise vacations has been significantly negatively impacted which has resulted in lower occupancy rates and adverse pricing, with a corresponding increase in the use of credits and other means to attract travelers. As a result of the impact of COVID-19, we expect lower occupancy levels during our resumption of guest cruise operations and cannot predict when we will be able to achieve historical occupancy levels.

The extent of the effects of the outbreak on our business and the cruising industry at large is highly uncertain and will ultimately depend on future developments, including, but not limited to, the duration and severity of the outbreak, the length of time it takes for demand and pricing to return and normal economic and operating conditions to resume.general concerns. To the extent ~~COVID-19~~the current invasion of Ukraine adversely affects our business, ~~operations, financial condition and operating results,~~ it may also have the effect of heightening many other ~~risks.~~risks disclosed in our Form 10-K, any of which could materially and adversely affect our business and 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 may also be impacted by adverse changes in the perceived or actual economic climate, such as global or regional recessions, higher unemployment and underemployment rates and declines in income levels.

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•Item 2. AsUnregistered Sales of Equity Securities and Use of Proceeds.

I.Stock Swap Program

We have a ~~result~~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. Under the ~~COVID-19 outbreak,~~Stock Swap Program, we may ~~be out~~elect to offer and sell shares of ~~compliance with one or more maintenance covenants~~Carnival Corporation common stock at prevailing market prices in ~~certain~~ordinary brokers’ transactions and repurchase an equivalent number of ~~our debt facilities, with~~Carnival plc ordinary shares in the ~~next testing date of November 30, 2022.~~UK market.

Under the ~~terms~~Stock Swap Program effective June 2021, the Board of ~~certain~~Directors authorized the sale of ~~our export credit facilities, we are required~~up to ~~comply with~~$500 million shares of Carnival Corporation common stock in the ~~Interest Coverage Covenant~~U.S. market and the purchase of ~~not less than 3.0 to 1.0, and ensure that our Debt to Capital Covenant does not exceed 65%~~Carnival plc ordinary shares on at the end of each fiscal quarter. During the first quarter of 2021 (and while being in compliance with the Debt to Capital Covenant as of such date), we obtained waivers of compliance with the Interest Coverage Covenant and Debt to Capital Covenant in our export credit facilities through August 31, 2022 (with the next testing date of November 30, 2022) or November 30, 2022 (with the next testing date of February 28, 2023) for our funded export credit facilities with aggregate indebtedness of $8.8 billion as of May 31, 2021 and unfunded export credit facilities withleast an ~~aggregate principal amount of $6.5 billion as of May 31, 2021.~~equivalent basis.

~~During~~We may in the ~~first quarter of 2021 we entered into supplemental agreements with respect~~future implement a program to ~~our Revolving Credit Facility and many of our bank loans. Under our Revolving Credit Facility and many of our bank loans, we~~allow us to obtain a net cash benefit when Carnival plc ordinary shares are ~~now required to maintain the Interest Coverage Covenant from February 28, 2023,~~trading at a ratio of not less than 2.0 to 1.0 for the February 28, 2023 and May 31, 2023 testing dates, 2.5 to 1.0 for the August 31, 2023 and November 30, 2023 testing dates, and 3.0 to 1.0 from the February 28, 2024 testing date onwards, or through their respective maturity dates, and the Debt to Capital Covenant at the end of each fiscal quarter before the November 30, 2021 testing date at a percentage not to exceed 65%. From the November 30, 2021 testing date until the May 31, 2023 testing date the Debt to Capital Covenant is 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.

~~Even though we expect to obtain further amendments under our debt facilities with respect~~premium to the ~~Interest Coverage Covenant or the Debt to Capital Covenant, if such amendments are not obtained we may be required to take certain actions, which in the case~~price of the Debt to Capital Covenant could include issuing additional equity and/or reducing our indebtedness, failing which we may not be in compliance with the Interest Coverage Covenant or the Debt to Capital Covenant following August 31, 2022 with the next testing date of November 30, 2022 for such debt facilities, or as of future testing dates for certain agreements, because of the phased resumption of our guest cruise operations.Carnival Corporation common stock.

~~Amendments~~Any sales of Carnival Corporation common stock and ~~waivers~~Carnival plc ordinary shares have been or will be registered under the Securities Act of 1933, as amended. During the three months ended February 28, 2022, under the Stock Swap Program, we sold 1.3 million shares of Carnival Corporation’s common stock and repurchased the same amount of Carnival plc ordinary shares, resulting in net proceeds of $2 million, which were used for general corporate purposes. Since the beginning of the Interest Coverage Covenant and Debt to Capital Covenant have led and may continue to lead to increased costs, increased interest rates, additional restrictive covenants and other lender protections that are, or may become, applicable to us under these debt facilities, and such increased costs, restrictions and modifications may vary among debt facilities. For example,Stock Swap Program, first authorized in ~~connection with the amendments to the Revolving Credit Facility and certain agreements governing our bank loans described above,~~ June 2021,we have ~~made certain changes to more closely align~~sold 10.2 million shares of Carnival Corporation’s common stock and repurchased the ~~financial covenants among the various facilities and agreements. In addition, we have agreed to additional restrictive covenants~~same amount of Carnival plc ordinary shares, resulting in such facilities and agreements with respect to debt incurrence, lien incurrence, restricted payments and investments that are substantially consistent with those contained in the indentures governing our recent unsecured notes issuances. In May and June 2021, the subsidiaries that guarantee our 2026 Senior Unsecured Notes and the 2027 Senior Unsecured Notes agreed to guarantee certainnet proceeds of our debt that was outstanding prior to April 2020, including our Revolving Credit Facility. These subsidiaries are expected to enter into additional agreements to guarantee additional debt under certain of our export credit facilities. Our ability to provide additional lender protections under these facilities, including the granting of security interests in certain collateral and the granting of guarantees with respect to certain outstanding debt, will be limited by the terms of such agreements as amended, and our other debt facilities.$21 million.

There can be no assurance that we will be able to obtain amendments in a timely manner, on acceptable terms or at all. If we were not able to obtain the financial covenant amendments described above under any one or more of these debt facilities, we would be in default of any such agreement. As a consequence, we would need to refinance or repay the applicable debt facility or facilities, and would be required to raise additional debt or equity capital, or divest assets, to refinance or repay such facility or facilities. If we were to be unable to obtain financial covenant amendments as may be required under any one or more of these debt facilities, there can be no assurance that we would be able to raise sufficient debt or equity capital, or divest assets, to refinance or repay such facility or facilities. With respect to each of the unfunded debt facilities, if we were unable to obtain amendments under such debt facilities, the relevant lender under such facility could terminate that facility. With respect to each of our funded debt facilities, if we were unable to obtain amendments or refinance or repay such debt facilities, it would lead to an event of default under such facilities, which could lead to an acceleration of the indebtedness under such debt facilities. In turn, this would lead to an event of default and potential acceleration of amounts due under all of our outstanding debt and derivative contract payables. As a result, the failure to obtain the financial covenant amendments described above would have a material adverse effect.

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Period	Total Number of Shares of Carnival plc Ordinary Shares Purchased (a) (in millions)	Average Price Paid per Share of Carnival plc Ordinary Share		Maximum Number of Carnival plc Ordinary Shares That May Yet Be Purchased Under the Carnival Corporation Stock Swap Program (in millions)
December 1, 2021 through December 31, 2021	—	$	—	9.5
January 1, 2022 through January 31, 2022	—	$	—	9.5
February 1, 2022 through February 28, 2022	1.3	$	19.57	8.2
Total	1.3	19.57

(a) No ordinary shares of Carnival plc were purchased outside of publicly announced plans or programs.

~~Table of Contents~~

Item 6. ~~Exhibits.~~Exhibits
INDEX TO EXHIBITS
Incorporated by Reference Filed/
Furnished
Herewith
Exhibit
Number Exhibit Description Form Exhibit Filing
Date
Articles of incorporation and by-laws
3.1
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
Amendment of the Carnival Corporation 2020 Stock Plan
X
10.2
Amendment Agreement dated May 11, 2021 to the Multicurrency Revolving Facilities Agreement originally dated May 18, 2011, as amended and restated on August 6, 2019 and further amended on December 31, 2020, among Carnival Corporation, Carnival plc and certain of Carnival Corporation and Carnival plc subsidiaries, Bank of America Europe Designated Activity Company as facilities agent and a syndicate of financial institutions
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
.

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

Employment Agreement dates as of June 28, 2019 between Carnival Corporation and Peter C. Anderson.

10.2**

Amendment Agreement dated February 11, 202 2 to the Multicurrency Revolving Facilities Agreement originally dated May 18, 2011, as amended and restated on August 6, 2019 and as further amended on December 31, 2020, May 11, 2021 and September 30, 2021, among Carnival Corporation, Carnival plc and certain of Carnival Corporation and Carnival plc subsidiaries, Bank of America Europe Designated Activity Company as facilities agent and a syndicate of financial institutions.

10.3

Form of Earnings Recovery Award Agreement for the Carnival Corporation 2020 Stock Plan for the CEO.

10.4

Form of Earnings Recovery Award Agreement for the Carnival Corporation 2020 Stock Plan for Certain Named Executive Officers.

10.5

Form of Time-Based Restricted Stock Unit Agreement for the Carnival Corporation 2020 Stock Plan for the Chief Ethics and Compliance Officer.

3732

~~Table of Contents~~

INDEX TO EXHIBITS

Incorporated by Reference

Filed/
Furnished
Herewith

Exhibit
Number

Exhibit Description

Form

Exhibit

Filing
Date

Rule 13a-14(a)/15d-14(a) certifications

31.1

Certification of President, Chief Executive Officer and Chief Climate Officer of Carnival Corporation pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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.

31.3

Certification of President, Chief Executive Officer and Chief Climate Officer of Carnival plc pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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.

Section 1350 certifications

32.1*

Certification of President, Chief Executive Officer and Chief ~~Executive~~Climate 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~~2002.

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~~2002.

32.3*

Certification of President, Chief Executive Officer and Chief ~~Executive~~Climate 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~~2002.

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~~2002.

Interactive Data File

101

The consolidated financial statements from Carnival Corporation & plc’s joint Quarterly Report on Form 10-Q for the quarter ended ~~May 31, 2021,~~February 28, 2022, as filed with the Securities and Exchange Commission on ~~June~~March 28, ~~2021,~~2022, formatted in Inline XBRL, are as follows:

(i) the Consolidated Statements of Income (Loss) for the three ~~and six~~ months ended ~~May 31, 2021~~February 28, 2022 and ~~2020;~~2021;

(ii) the Consolidated Statements of Comprehensive Income (Loss) for the three ~~and six~~ months ended ~~May 31, 2021~~February 28, 2022 and ~~2020;~~2021;

(iii) the Consolidated Balance Sheets at ~~May 31, 2021~~February 28, 2022 and November 30, ~~2020;~~2021;

(iv) the Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~May 31, 2021~~February 28, 2022 and ~~2020;~~2021;

(v) the Consolidated Statements of Shareholders’ Equity for the three ~~and six~~ months ended ~~May 31, 2021~~February 28, 2022 and ~~2020;~~2021;

(vi) the notes to the consolidated financial statements, tagged in summary and detail.

INDEX TO EXHIBITS

Incorporated by Reference

Filed/
Furnished
Herewith

Exhibit
Number

Exhibit Description

Form

Exhibit

Filing
Date

104

The cover page from Carnival Corporation & plc’s joint Quarterly Report on Form 10-Q for the quarter ended ~~May 31, 2021,~~February 28, 2022, as filed with the Securities and Exchange Commission on ~~June~~March 28, ~~2021,~~2022, formatted in Inline XBRL (included as Exhibit 101).



*			These items are furnished and not filed.
**			Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10) of Regulation S-K.

3834

~~Table of Contents~~

SIGNATURES

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

CARNIVAL CORPORATION

CARNIVAL PLC

By:

/s/ Arnold W. Donald

By:

/s/ Arnold W. Donald

Arnold W. Donald

President, Chief Executive Officer and Chief ~~Executive~~Climate Officer

By:

/s/ David Bernstein

By:

/s/ David Bernstein

David Bernstein

Chief Financial Officer and Chief Accounting Officer

Date: ~~June~~March 28, ~~2021~~2022

3935


	Three Months Ended
	Common stock		Ordinary shares		Additional paid-in capital		Retained earnings		AOCI		Treasury stock		Total shareholders’ equity
At February 29, 2020	$	7	$	358	$	8,829	$	25,527	$	(2,028)	$	(8,404)	$	24,290
Net income (loss)	—		—		—		(4,374)		—		—		(4,374)
Other comprehensive income (loss)	—		—		—		—		65		—		65
Issuance of common stock through underwritten public offering (net of offering expenses and underwriters’ discount)	1		—		555		—		—		—		556
Equity component of Convertible Senior Notes	—		—		286		—		—		—		286
Purchases of treasury stock under the Repurchase Program and other	—		2		12		2		—		—		16
At May 31, 2020	$	7	$	360	$	9,683	$	21,155	$	(1,962)	$	(8,404)	$	20,840

At February 28, 2021	$	11	$	361	$	14,977	$	14,102	$	(1,233)	$	(8,404)	$	19,813
Net income (loss)	—		—		—		(2,072)		—		—		(2,072)
Other comprehensive income (loss)	—		—		—		—		107		—		107
Other	—		—		28		—		—		—		28
At May 31, 2021	$	11	$	361	$	15,005	$	12,030	$	(1,126)	$	(8,404)	$	17,876


	Six Months Ended
	Common stock		Ordinary shares		Additional paid-in capital		Retained earnings		AOCI		Treasury stock		Total shareholders’ equity
At November 30, 2019	$	7	$	358	$	8,807	$	26,653	$	(2,066)	$	(8,394)	$	25,365
Net income (loss)	—		—		—		(5,155)		—		—		(5,155)
Other comprehensive income (loss)	—		—		—		—		103		—		103
Cash dividends declared ($0.50 per share)	—		—		—		(342)		—		—		(342)
Issuance of common stock through underwritten public offering (net of offering expenses and underwriters’ discount)	1		—		555		—		—		—		556
Equity component of Convertible Senior Notes	—		—		286		—		—		—		286
Purchases of treasury stock under the Repurchase Program and other	—		2		35		—		—		(10)		27
At May 31, 2020	$	7	$	360	$	9,683	$	21,155	$	(1,962)	$	(8,404)	$	20,840

At November 30, 2020	$	11	$	361	$	13,948	$	16,075	$	(1,436)	$	(8,404)	$	20,555
Net income (loss)	—		—		—		(4,045)		—		—		(4,045)
Other comprehensive income (loss)	—		—		—		—		310		—		310
Issuance of common stock, net	—		—		996		—		—		—		997
Other	—		—		60		—		—		—		60


At May 31, 2021	$	11	$	361	$	15,005	$	12,030	$	(1,126)	$	(8,404)	$	17,876


(in millions)	Three Months Ended May 31, 2020		Six Months Ended May 31, 2020
North America	$	404	$	3,051
Europe	250		1,616
Australia and Asia	65		680
Other	21		182
	$	740	$	5,529