REG - Carnival PLC - Half-year Report
26/06/2025 15:45
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RNS Number : 6229O Carnival PLC 26 June 2025
June 26, 2025
RELEASE OF CARNIVAL CORPORATION & PLC JOINT QUARTERLY REPORT ON FORM 10-Q
FOR THE SECOND QUARTER OF 2025 AND CARNIVAL PLC GROUP HALF-YEARLY FINANCIAL
REPORT
Carnival Corporation & plc announced its second quarter results of
operations in its earnings release issued on June 24, 2025. Carnival
Corporation & plc is hereby announcing that today it has filed its joint
Quarterly Report on Form 10-Q ("Form 10-Q") with the U.S. Securities and
Exchange Commission ("SEC") containing the Carnival Corporation & plc
unaudited consolidated financial statements as of and for the three and six
months ended May 31, 2025.
In addition, the Directors are today presenting in the attached Schedule A,
the unaudited interim condensed financial statements for the Carnival plc
Group ("Interim Financial Statements") as of and for the six months ended May
31, 2025. The Interim Financial Statements exclude the consolidated results of
Carnival Corporation and are prepared under UK-adopted International Financial
Reporting Standards.
Schedule B contains the Carnival Corporation & plc Form 10-Q which
includes unaudited consolidated financial statements as of and for the three
and six months ended May 31, 2025, and management's discussion and analysis of
financial condition and results of operations. The information included in the
Form 10-Q (Schedule B) has been prepared in accordance with SEC rules and
regulations. The Carnival Corporation & plc unaudited consolidated
financial statements contained in the Form 10-Q have been prepared in
accordance with generally accepted accounting principles in the United States
of America ("U.S. GAAP").
The Directors consider that within the Carnival Corporation and Carnival plc
dual listed company ("DLC") arrangement, the most appropriate presentation of
Carnival plc's results and financial position is by reference to the Carnival
Corporation & plc U.S. GAAP unaudited consolidated financial statements
("DLC Financial Statements").
These schedules (A & B) are presented together as Carnival plc's Group
half-yearly financial report ("Interim Financial Report") in accordance with
the requirements of the UK Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority.
MEDIA CONTACT INVESTOR RELATIONS CONTACT
Jody Venturoni Beth Roberts
001 469 797 6380 001 305 406 4832
The Form 10-Q is available for viewing on the SEC website at www.sec.gov under
Carnival Corporation or Carnival plc or the Carnival Corporation & plc
website at www.carnivalcorp.com or www.carnivalplc.com. A copy of the Form
10-Q and the Interim Financial Statements have been submitted to the National
Storage Mechanism and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism. Additional information
can be obtained via Carnival Corporation & plc's website listed above or
by writing to Carnival plc at Carnival House, 100 Harbour Parade, Southampton,
SO15 1ST, United Kingdom.
Carnival Corporation & plc is the largest global cruise company, and among
the largest leisure travel companies, with a portfolio of world-class cruise
lines - AIDA Cruises, Carnival Cruise Line, Costa Cruises, Cunard, Holland
America Line, P&O Cruises, Princess Cruises, and Seabourn.
Additional information can be found on www.carnivalcorp.com, www.aida.de,
www.carnival.com, www.costacruises.com, www.cunard.com,
www.hollandamerica.com, www.pocruises.com, www.princess.com and
www.seabourn.com.
SCHEDULE A
CARNIVAL PLC
INTERIM CONDENSED GROUP STATEMENTS OF INCOME (LOSS)
(UNAUDITED)
(in millions, except per share data)
Six Months Ended May 31,
Notes 2025 2024
Revenues
Passenger ticket $3,438 $3,227
Onboard and related 1,159 1,121
10 4,597 4,347
Operating Expenses
Commissions, transportation and related 785 764
Onboard and related 287 271
Payroll and related 528 521
Fuel 395 458
Food 260 265
Other operating 829 933
Cruise and tour operating expenses 3,085 3,212
Selling and administrative 10 560 539
Depreciation and amortisation 10 390 365
4,034 4,116
Operating Income 562 232
Nonoperating Income (Expense)
Interest income 5 29
Income (loss) from investments in associates (3) (5)
Interest expense (129) (168)
Other income (expense), net 3 (273) 29
(401) (116)
Income Before Income Taxes 162 116
Income Tax Benefit (Expense), Net (20) (1)
Net Income $142 $115
Earnings Per Share
Basic $0.75 $0.61
Diluted $0.75 $0.61
The accompanying notes are an integral part of these Interim Financial
Statements. These Interim Financial Statements only present the Carnival plc
consolidated IFRS Interim Financial Statements and, accordingly, do not
include the consolidated IFRS results of Carnival Corporation.
Within the DLC arrangement the most appropriate presentation of Carnival plc's
results and financial position is considered to be by reference to the DLC
Financial Statements.
CARNIVAL PLC
INTERIM CONDENSED GROUP STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(in millions)
Six Months Ended May 31,
2025 2024
Net Income $142 $115
Other Comprehensive Income
Items that will not be reclassified through the Statements of Income
Remeasurements of post-employment benefit obligations (1) (5)
Items that may be reclassified through the Statements of Income
Foreign currency translation 440 (5)
Other Comprehensive Income (Loss) 439 (10)
Total Comprehensive Income $581 $104
The accompanying notes are an integral part of these Interim Financial
Statements. These Interim Financial Statements only present the Carnival plc
consolidated IFRS Interim Financial Statements and, accordingly, do not
include the consolidated IFRS results of Carnival Corporation.
Within the DLC arrangement the most appropriate presentation of Carnival plc's
results and financial position is considered to be by reference to the DLC
Financial Statements.
CARNIVAL PLC
INTERIM CONDENSED GROUP BALANCE SHEETS
(UNAUDITED)
(in millions)
Notes May 31, November 30, 2024
2025
ASSETS
Current Assets
Cash and cash equivalents $747 $397
Trade and other receivables, net 263 287
Inventories 199 223
Prepaid expenses and related 264 300
Amount owed from the Carnival Corporation group - 417
Total current assets 1,473 1,623
Non-Current Assets
Property and equipment, net 4 12,931 11,117
Right-of-use assets, net 295 500
Investments in associates 96 97
Emission allowances 105 69
Other assets 5 264 188
Total non-current assets 13,691 11,971
$15,163 $13,594
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt $754 $925
Current portion of lease liabilities 67 131
Accounts payable 441 443
Accrued liabilities and related 652 720
Customer deposits 2,516 2,376
Amount owed to the Carnival Corporation group 794 -
Total current liabilities 5,225 4,595
Non-Current Liabilities
Long-term debt 6,709 6,269
Long-term lease liabilities 246 408
Provisions 9 80 70
Other long-term liabilities 314 249
Total non-current liabilities 7,349 6,996
Shareholders' Equity
Share capital 361 361
Share premium 1,143 1,143
Retained earnings 2,917 2,820
Other reserves (1,831) (2,320)
Total shareholders' equity 2,590 2,004
$15,163 $13,594
The accompanying notes are an integral part of these Interim Financial
Statements. These Interim Financial Statements only present the Carnival plc
consolidated IFRS Interim Financial Statements and, accordingly, do not
include the consolidated IFRS results of Carnival Corporation.
Within the DLC arrangement the most appropriate presentation of Carnival plc's
results and financial position is considered to be by reference to the DLC
Financial Statements.
CARNIVAL PLC
INTERIM CONDENSED GROUP STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in millions)
Six Months Ended May 31,
2025 2024
OPERATING ACTIVITIES
Income before income taxes $162 $116
Adjustments to reconcile income before income taxes to net cash provided by
(used in) operating activities
Depreciation and amortisation 390 365
Share-based compensation 6 4
Interest expense, net 126 147
(Income) loss from investments in associates 3 5
Unrealized foreign currency exchange (gain) loss 283 (45)
Gain on sales of ships (37) -
Greenhouse gas regulatory expense 22 12
Other (35) 13
919 617
Changes in operating assets and liabilities
Receivables 33 48
Inventories 36 43
Purchase of emission allowances (31) (13)
Prepaid expenses and other assets 22 11
Accounts payable (39) (80)
Accrued liabilities, other and provisions (93) (21)
Customer deposits 50 53
Cash provided by (used in) operations before interest, debt issuance costs and 896 659
income taxes
Interest received 5 29
Interest paid (118) (142)
Debt issuance costs paid (20) (53)
Income tax benefit received (paid), net (7) (6)
Net cash provided by (used in) operating activities 756 487
INVESTING ACTIVITIES
Purchases of property and equipment (385) (839)
Proceeds from sales of ships 92 -
Advances (to) from Carnival Corporation group, net 205 -
Other - 103
Net cash provided by (used in) investing activities (87) (736)
FINANCING ACTIVITIES
Payments (to) from Carnival Corporation group, net (16) (1,533)
Principal repayments of long-term debt (364) (410)
Proceeds from issuance of long-term debt 112 1,581
Lease liabilities principal payments (69) (47)
Net cash provided by (used in) financing activities (337) (409)
Effect of exchange rate changes on cash and cash equivalents 18 (2)
Net increase (decrease) in cash and cash equivalents 350 (660)
Cash and cash equivalents at beginning of period 397 1,363
Cash and cash equivalents at end of period $747 $703
The accompanying notes are an integral part of these Interim Financial
Statements. These Interim Financial Statements only present the Carnival plc
consolidated IFRS Interim Financial Statements and, accordingly, do not
include the consolidated IFRS results of Carnival Corporation.
Within the DLC arrangement the most appropriate presentation of Carnival plc's
results and financial position is considered to be by reference to the DLC
Financial Statements.
CARNIVAL PLC
INTERIM CONDENSED GROUP STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
(in millions)
Reserves
Share capital Share premium Retained earnings Translation reserve Cash flow hedges Treasury shares Other reserves Merger reserve Total Total shareholders' (deficit) equity
At November 30, 2023 $361 $1,143 $1,366 $(2,258) $21 $(1,694) $128 $1,503 $(2,300) $569
Comprehensive income (loss)
Net income - - 115 - - - - - - 115
Foreign currency translation - - - (5) - - - - (5) (5)
Remeasurements of post-employment benefit obligations - - (5) - - - - - - (5)
Total comprehensive income (loss) - - 110 (5) - - - - (5) 104
Issuance of treasury shares for vested share-based awards - - (47) - - 47 - - 47 -
Other, net (a) - - - - - - 3 - 3 4
At May 31, 2024 $361 $1,143 $1,429 $(2,263) $21 $(1,647) $131 $1,503 $(2,255) $677
At November 30, 2024 $361 $1,143 $2,820 $(2,334) $21 $(1,647) $137 $1,503 $(2,320) $2,004
Comprehensive income (loss)
Net income - - 142 - - - - - - 142
Foreign currency translation - - - 440 - - - - 440 440
Remeasurements of post-employment benefit obligations - - (1) - - - - - - (1)
Total comprehensive income (loss) - - 141 440 - - - - 439 581
Issuance of treasury shares for vested share-based awards - - (44) - - 44 - - 44 -
Other, net (a) - - - - - - 6 - 6 5
At May 31, 2025 $361 $1,143 $2,917 $(1,894) $21 $(1,603) $142 $1,503 $(1,831) $2,590
(a) Includes equity settled share-based payments
The accompanying notes are an integral part of these Interim Financial
Statements. These Interim Financial Statements only present the Carnival plc
consolidated IFRS Interim Financial Statements and, accordingly, do not
include the consolidated IFRS results of Carnival Corporation.
Within the DLC arrangement the most appropriate presentation of Carnival plc's
results and financial position is considered to be by reference to the DLC
Financial Statements.
CARNIVAL PLC
NOTES TO INTERIM CONDENSED GROUP FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - General
Description of Business
Carnival plc was incorporated in England and Wales in 2000 and is domiciled in
the UK with its headquarters located at Carnival House, 100 Harbour Parade,
Southampton, Hampshire, SO15 1ST, UK (registration number 04039524). Carnival
plc and its subsidiaries and associates are referred to collectively in these
Interim Financial Statements as the "Group," "our," "us" and "we".
Carnival Corporation & plc is the largest global cruise company, and among
the largest leisure travel companies, with a portfolio of world-class cruise
lines - AIDA Cruises, Carnival Cruise Line, Costa Cruises, Cunard, Holland
America Line, P&O Cruises, Princess Cruises, and Seabourn.
During 2025, we sunset the P&O Cruises (Australia) brand and folded its
operations into Carnival Cruise Line.
DLC Arrangement
Carnival Corporation and Carnival plc operate a dual listed company ("DLC")
arrangement, whereby the businesses of Carnival Corporation and Carnival plc
are combined through a number of contracts and provisions in Carnival
Corporation's Articles of Incorporation and By-Laws and Carnival plc's
Articles of Association. The two companies operate as a single economic
enterprise with a single senior management team and identical Boards of
Directors, but each has retained its separate legal identity. Carnival
Corporation's shares of common stock are publicly traded on the New York Stock
Exchange ("NYSE") and Carnival plc's ordinary shares are publicly traded on
the London Stock Exchange. The Carnival plc American Depositary Shares are
traded on the NYSE.
The constitutional documents of each company provide that, on most matters,
the holders of the common equity of both companies effectively vote as a
single body. The Equalization and Governance Agreement between Carnival
Corporation and Carnival plc provides for the equalization of dividends and
liquidation distributions based on an equalization ratio and contains
provisions relating to the governance of the DLC arrangement. Because the
equalization ratio is 1 to 1, one share of Carnival Corporation common stock
and one Carnival plc ordinary share are generally entitled to the same
distributions.
Under deeds of guarantee executed in connection with the DLC arrangement, as
well as stand-alone guarantees executed since that time, each of Carnival
Corporation and Carnival plc have effectively cross guaranteed all
indebtedness and certain other monetary obligations of each other. Once the
written demand is made, the holders of indebtedness or other obligations may
immediately commence an action against the relevant guarantor.
Under the terms of the DLC arrangement, Carnival Corporation and Carnival plc
are permitted to transfer assets between the companies, make loans to or
investments in each other and otherwise enter into intercompany transactions.
In addition, the cash flows and assets of one company are required to be used
to pay the obligations of the other company, if necessary.
The Boards of Directors consider that, within the DLC arrangement, the most
appropriate presentation of Carnival plc's results and financial position is
by reference to the U.S. generally accepted accounting principles ("U.S.
GAAP") DLC Financial Statements because all significant financial and
operating decisions affecting the DLC companies are made on a joint basis to
optimize the consolidated performance as a single economic entity.
Accordingly, the DLC Financial Statements for the three and six months ended
May 31, 2025 are provided to shareholders as supplementary information, which
are included in Schedule B, but do not form part of these Carnival plc interim
financial statements.
Going Concern
The assessment of liquidity, financial condition and capital resources within
Schedule B indicates that Carnival Corporation & plc has sufficient
liquidity to meet its commitments and obligations for at least 12 months from
the date of the report. In light of these circumstances, the Board of
Directors of the Group have a reasonable expectation that Carnival Corporation
& plc has adequate resources to continue its operational existence and
continue to adopt the going concern basis of preparing the Carnival plc
Interim Financial Statements.
Basis of Preparation
The Carnival plc Interim financial statements are presented in U.S. dollars
unless otherwise noted and are prepared on the historical cost basis. These
Interim Financial Statements are required to satisfy reporting requirements of
the United Kingdom's Financial Conduct Authority ("FCA") and do not include
the consolidated results and financial position of Carnival Corporation and
its subsidiaries. These Interim Financial Statements have been prepared in
accordance with the Disclosure Guidance and Transparency Rules of the FCA and
with International Accounting Standard 34 "Interim Financial Reporting" as
adopted by the UK ("IAS 34"). The Interim Financial Statements should be read
in conjunction with the audited annual financial statements for the year ended
November 30, 2024, which were prepared in accordance with UK-adopted
International Financial Reporting Standards ("IFRS").
For 2024, we reclassified $13 million from prepaid expenses and other assets
to purchase of emission allowances in the Group Statements of Cash Flows to
conform to the current year presentation.
Status of Financial Statements
Our Interim Financial Statements for the six months ended May 31, 2025 have
not been audited or reviewed by the auditors.
Our Interim Financial Statements do not comprise statutory accounts within the
meaning of section 434 of the Companies Act 2006 Act. Statutory accounts for
the year ended November 30, 2024 were approved by the Boards of Directors on
January 24, 2025 and delivered to the Registrar of Companies. The report of
the auditors on those accounts was (i) unqualified, (ii) did not contain a
material uncertainty related to going concern and (iii) did not contain any
statement under section 498 of the 2006 Act.
Use of Estimates and Risks and Uncertainty
The preparation of our Interim Financial Statements in conformity with IFRS as
adopted in the UK requires management to make judgements, estimates and
assumptions that affect the application of policies and reported and disclosed
amounts in these financial statements. The estimates and underlying
assumptions are based on historical experience and various other factors that
we believe to be reasonable under the circumstances and form the basis of
making judgments about carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from the
estimates used in preparing these Interim Financial Statements.
Significant accounting estimates, assumptions and judgements are reviewed on
an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised if the revision affects only that
period or in the period of the revision and future periods if the revision
affects both current and future periods. For a detailed discussion of our
significant accounting estimates, assumptions and judgements refer to Note 2 -
Material Accounting Policies included in our 2024 Carnival plc Annual Report.
Accounting Pronouncements
The International Accounting Standards Board ("IASB") has issued amendments to
the standard, IAS 1, Presentation of Financial Statements - Classification of
Liabilities as Current or Non-current, providing a more general approach to
the classification of liabilities based on the contractual agreements in place
at the reporting date. On December 1, 2024, we adopted this guidance. The
adoption of this guidance had no impact on our consolidated financial
statements.
The IASB has issued amendments to the standards, IAS 7, Statement of Cash
Flows and IFRS 7, Financial Instruments: Disclosures - Supplier Finance
Arrangements. These amendments require that an entity disclose information
about its supplier finance arrangements that enables users of financial
statements to assess the effects of those arrangements on the entity's
liabilities and cash flows and the entity's exposure to liquidity risk. On
December 1, 2024, we adopted this guidance. The adoption of this guidance had
no impact on our consolidated financial statements.
The IASB has issued amendments to the standard, IAS 21, The Effects of Changes
in Foreign Exchange Rates - Lack of Exchangeability. These amendments specify
how to assess whether a currency is exchangeable and how to determine the
exchange rate when it is not. These amendments require that an entity disclose
information that enables users of its financial statements to evaluate how
currencies lacking exchangeability affect, or are expected to affect, the
entity's financial performance, financial position and cash flows. These
amendments are required to be adopted by us beginning December 1, 2025. The
adoption of this guidance will not have an impact on our consolidated
financial statements.
The IASB has issued amendments to the standard, IFRS 9, Financial Instruments
and IFRS 7, Financial Instruments: Disclosures - Amendments to the
Classification and Measurement of Financial Instruments. These amendments
clarify the recognition and derecognition criteria for financial assets and
liabilities, and the classification of financial assets with environmental,
social and corporate governance and similar features. In addition, the
amendments require additional disclosures for financial assets and liabilities
with contractual terms that reference a contingent event and equity
instruments classified at fair value through other comprehensive income. These
amendments are required to be adopted by us beginning December 1, 2026. We are
currently evaluating the impact this guidance will have on our consolidated
financial statements.
The IASB has issued the following standards and amendments that have not been
adopted in the UK:
• Amendments to IFRS 9, Financial Instruments and IFRS 7,
Financial Instruments: Disclosures - Contracts Referencing Nature-dependent
Electricity (effective date January 1, 2026).
• IFRS 18, Presentation and Disclosure in Financial Statements
(effective date January 1, 2027).
• IFRS 19, Subsidiaries without Public Accountability: Disclosures
(effective date January 1, 2027).
NOTE 2 - Revenue and Expense Recognition
Guest cruise deposits and advance onboard purchases are initially included in
customer deposits when received. Customer deposits are subsequently recognized
as cruise revenues, together with revenues from onboard and other activities,
and all associated direct expenses of a voyage are recognized as cruise
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 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 related
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 expenses of these services are included in transportation expenses.
The proceeds that we collect from the sales of third-party shore excursions
are included in onboard and related revenues and the related expenses are
included in onboard and related expenses. The amounts collected on behalf of
our onboard concessionaires, net of the amounts remitted to them, are included
in onboard and related revenues as concession revenues. All of these amounts
are recognized on a completed voyage or pro rata basis as discussed above.
Revenues and expenses from our hotel and transportation operations, which are
included in our Tour and Other segment, are recognized at the time the
services are performed.
Customer Deposits
Our payment terms generally require an initial deposit to confirm a
reservation, with the balance due prior to the voyage. Cash received from
guests in advance of the cruise is recorded in customer deposits and in other
long-term liabilities on our Consolidated Balance Sheets. These amounts
include refundable deposits.
Trade and Other Receivables
Although we generally require full payment from our customers prior to or
concurrently with their cruise, we grant credit terms to a relatively small
portion of our revenue source. We have receivables from credit card merchants
and travel agents for cruise ticket purchases and onboard revenue which are
included within trade and other receivables. These receivables represent
contractual cash flows, and are measured at amortized cost and are less of
allowances for expected credit losses. We apply the simplified approach and
record lifetime expected credit losses for trade receivables. 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.
Contract Costs
We recognize incremental travel agent commissions and credit and debit card
fees incurred as a result of obtaining the ticket contract as assets when paid
prior to the start of a voyage. We record these amounts within prepaid
expenses and related and subsequently recognize these amounts as commissions,
transportation and related at the time of revenue recognition or at the time
of voyage cancellation. We had incremental costs of obtaining contracts with
customers recognized as assets of $79 million and $82 million as of May 31,
2025 and November 30, 2024.
NOTE 3 - Other Income and Expense
Six Months Ended May 31,
(in millions) 2025 2024
Realized and unrealized foreign currency exchange gains (losses), net $(273) $29
Other - (1)
Other income (expense), net $(273) $29
NOTE 4 - Property and Equipment
(in millions)
At November 30, 2024 $11,117
Additions 1,743
Disposals (445)
Depreciation (327)
Exchange movements 843
At May 31, 2025 $12,931
We review our long-lived assets for impairment whenever events or
circumstances indicate potential impairment. During the six months ended May
31, 2025, we did not identify any triggers indicating possible impairment and
therefore, did not record any impairments.
Ship Sales
During the six months ended May 31, 2025, we completed the sale of one Europe
segment ship which represents a passenger-capacity reduction of 2,700 berths.
We will continue to operate the ship under a bareboat charter agreement
through September 2026.
Refer to Note 11 - "Related Party Transactions" for details on ship sales to
the Carnival Corporation group.
NOTE 5 - Other Assets
(in millions) May 31, 2025 November 30, 2024
VAT receivables $73 $57
Debt issuance costs (a) 43 25
Post-employment benefits 8 9
Other long-term assets and other receivables 140 97
$264 $188
(a) Debt issuance costs are for undrawn facilities.
NOTE 6 - Customer Deposits
We had total customer deposits of $2.7 billion and $2.5 billion as of May 31,
2025 and November 30, 2024. During the six months ended May 31, 2025 and 2024,
we recognized revenues of $2.0 billion and $1.8 billion related to our
customer deposits as of November 30, 2024 and 2023. Our customer deposits
balance changes due to the seasonal nature of cash collections, which
typically results from higher ticket prices and occupancy levels during the
third quarter, the recognition of revenue, refunds of customer deposits and
foreign currency changes.
NOTE 7 - Debt and Interest Expense
Export Credit Facility Borrowings
Our export credit facilities are due in semi-annual installments through 2036.
As of May 31, 2025, we had $2.6 billion of undrawn export credit facilities
to fund ship deliveries planned through 2028 ($2.4 billion as of November 30,
2024). As of May 31, 2025, the net book value of the Carnival plc vessels
subject to negative pledges was $5.7 billion ($4.0 billion as of November
30, 2024).
Revolving Facility
As of May 31, 2025, Carnival Holdings (Bermuda) II Ltd ("Carnival Holdings
II"), a subsidiary of Carnival Corporation, had $3.0 billion available for
borrowing under Carnival Corporation & plc's Revolving Facility.
New Revolving Facility
In June 2025, Carnival Corporation and Carnival plc entered into a
$4.5 billion unsecured multi-currency revolving credit facility ("New
Revolving Facility"). The New Revolving Facility replaced the Revolving
Facility of Carnival Holdings II. The New Revolving Facility matures in June
2030 and contains an accordion feature, allowing for up to $1.0 billion of
additional revolving commitments. Carnival Corporation & plc may borrow
or utilize available amounts under its New Revolving Facility through June
2030, subject to the satisfaction of the conditions in the facility.
Borrowings under the New Revolving Facility will bear interest at a rate of
term SOFR, EURIBOR, or daily compounding SONIA, as applicable, plus a margin
based on the long-term credit ratings of Carnival Corporation. In addition,
Carnival Corporation & plc is required to pay certain fees on the
aggregate commitments under its New Revolving Facility.
Covenant Compliance
As of May 31, 2025, Carnival Corporation & plc's Revolving Facility,
unsecured loan and export credit facilities contain certain covenants listed
below:
• Maintain minimum interest coverage (adjusted EBITDA to
consolidated net interest charges, as defined in the agreements) as follows:
◦ For its export credit facilities and its Revolving Facility, at
a ratio of not less than 2.0 to 1.0 for the May 31, 2025 testing date, at a
ratio of not less than 2.5 to 1.0 for the August 31, 2025 and November 30,
2025 testing dates, and at a ratio of not less than 3.0 to 1.0 for the
February 28, 2026 testing date onwards and as applicable through their
respective maturity dates
◦ For its unsecured loan, at a ratio of not less than 2.0 to 1.0
for the May 31, 2025 testing date through the maturity date
• For certain of its unsecured loan and export credit facilities,
maintain minimum issued capital and consolidated reserves (as defined in the
agreements) of $5.0 billion
• Limit its debt to capital (as defined in the agreements)
percentage to a percentage not to exceed 65%
• Maintain minimum liquidity of $1.5 billion
• Adhere to certain restrictive covenants through August 2027
(subject to such covenants terminating if we reach an the Company investment
grade credit rating in accordance with the agreement governing the Revolving
Facility)
• Limit the amounts of its secured assets as well as secured and
other indebtedness
At May 31, 2025, Carnival Corporation & plc was in compliance with the
applicable covenants under its debt agreements. Generally, if an event of
default under any debt agreement occurs, then, pursuant to cross-default
and/or cross-acceleration clauses therein, substantially all of its
outstanding debt and derivative contract payables could become due, and its
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.
Modifications
In April 2025, the euro floating rate loan agreement was amended to increase
the principal amount by $112 million, extend its maturity from April 2025 to
April 2029, amend the loan's margin from 3.25% to 1.95% and remove the
subsidiary guarantee.
NOTE 8 - Ship Commitments
At May 31, 2025, our new ship growth capital commitments were $34 million for
the remainder of 2025 and nil, $152 million, $85 million, $169 million and
$2.9 billion for the years ending November 30, 2026, 2027, 2028, 2029 and
thereafter.
NOTE 9 - Contingencies
Provisions
The Group's provisions include estimated liabilities for crew, guest and other
third-party claims. The liabilities associated with crew illnesses and crew
and guest injury claims, including all legal costs, are estimated based on the
specific merits of the individual claims or actuarially estimated based on
historical claims experience, loss development factors and other assumptions.
The changes in our provisions were as follows:
(in millions) Claims Reserves
November 30, 2024 $101
Additional provisions 10
Paid losses (10)
Reversals (3)
Exchange movements 6
May 31, 2025 $104
(in millions) May 31, 2025 November 30, 2024
Provisions
Current $25 $32
Non-current 80 70
$104 $101
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. We have insurance coverage for
certain of these claims and actions, or any settlement of these claims and
actions, 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 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 of May 31, 2025, two purported class actions brought against us by former
guests in the Federal Court in Australia and in Italy remain pending, as
previously disclosed. These actions include 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 our ships. On October 24, 2023, the court in the
Australian matter held that we were liable for negligence and for breach of
consumer protection warranties as it relates to the lead plaintiff. The court
ruled that the lead plaintiff was not entitled to any pain and suffering or
emotional distress damages on the negligence claim and awarded medical costs.
In relation to the consumer protection warranties claim, the court found that
distress and disappointment damages amounted to no more than the refund
already provided to guests and therefore made no further award. Further
proceedings will determine the applicability of this ruling to the remaining
class participants. On March 31, 2025, the court in the Italian matter
returned a ruling rejecting most of the plaintiffs' claims and awarding a
half-price fare reduction for certain passengers. Plaintiffs have appealed the
ruling. We continue to take actions to defend against the above claims. We
believe the ultimate outcome of these matters will not have a material impact
on our consolidated financial statements.
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 range from inadvertent events to malicious motivated attacks.
We have incurred legal and other costs in connection with cyber incidents that
have impacted us. The penalties and settlements paid in connection with cyber
incidents over the last three years were not material. While these incidents
did not have a material adverse effect on our business, results of operations,
financial position or liquidity, no assurances can be given about the future
and we may be subject to future attacks, incidents or litigation that could
have such a material adverse effect.
On March 14, 2022, the U.S. Department of Justice and the U.S. Environmental
Protection Agency notified 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. Carnival Corporation & plc believes the ultimate outcome will
not have a material impact on its consolidated financial statements.
Under the European Union Treaty certain economic benefits that are provided
under Italian law are subject to approval on a periodic basis by the European
Commission. In May 2025, the European Commission announced it had approved
these benefits through December 31, 2033. The full text of the decision is yet
to be made public. One of our subsidiaries continues to receive and recognize
these benefits. We will assess the details of the decision once made public.
If the European Commission denied a portion of the benefits we recognized, the
Italian Government may be required to retroactively disallow them and seek
reimbursement from us, which would result in a reversal of their recognition.
We do not expect the outcome to have a material impact on our consolidated
financial statements.
The Directors assessed the likelihood the European Commission would continue
to approve these benefits. Based on their judgements, the Directors considered
it was appropriate to recognize such benefits in 2024. Refer to Note 1 -
"General, Use of Estimates and Risks and Uncertainty" for additional
discussion.
Other Contingent Obligations
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.
Financial Guarantee Contracts
Under deeds of guarantee executed in connection with the DLC arrangement, as
well as stand-alone guarantees executed since that time, each of Carnival
Corporation and Carnival plc have effectively cross guaranteed all
indebtedness and certain other monetary obligations of each other.
NOTE 10 - Segment Information
As previously discussed, within the DLC arrangement the most appropriate
presentation of Carnival plc's results and financial position is by reference
to the DLC Financial Statements. The chief operating decision maker, who is
the Chief Executive Officer of Carnival Corporation and Carnival plc, assesses
performance and makes decisions to allocate resources for Carnival
Corporation & plc based upon review of the U.S. GAAP results across all
of the segments. The operating segments within each of our reportable segments
have been aggregated based on the similarity of their economic and other
characteristics, including geographic guest sourcing. Carnival Corporation
& plc has four reportable segments comprised of (1) North America cruise
operations ("North America"), (2) Europe cruise operations ("Europe"), (3)
Cruise Support and (4) Tour and Other.
The Cruise Support segment includes Carnival Corporation & plc's portfolio
of leading port destinations and exclusive islands as well as other services,
all of which are operated for the benefit of its cruise brands. The Tour and
Other segment represents the hotel and transportation operations of Holland
America Princess Alaska Tours and other operations.
Six Months Ended May 31,
(in millions) Revenues Operating Selling and Depreciation Operating
expenses administrative and income
amortisation (loss)
2025
North America (a) $8,120 $5,036 $993 $884 $1,207
Europe 3,841 2,478 499 356 508
Cruise Support 145 91 163 95 (204)
Tour and Other 33 47 9 12 (34)
Carnival Corporation & plc 12,139 7,653 1,663 1,346 1,477
- U.S. GAAP
Carnival Corporation - U.S. GAAP (b) (7,542) (4,499) (1,098) (989) (957)
Carnival plc - U.S. GAAP vs IFRS differences (c) - (69) (6) 32 43
Carnival plc - IFRS $4,597 $3,085 $560 $390 $562
2024
North America (a) $7,558 $4,982 $966 $813 $797
Europe 3,466 2,386 464 328 288
Cruise Support 122 75 162 94 (210)
Tour and Other 41 59 10 12 (40)
Carnival Corporation & plc 11,187 7,502 1,603 1,247 836
- U.S. GAAP
Carnival Corporation - U.S. GAAP (b) (6,840) (4,203) (1,059) (917) (661)
Carnival plc - U.S. GAAP vs IFRS differences (c) - (87) (5) 36 57
Carnival plc - IFRS $4,347 $3,212 $539 $365 $232
(a) Beginning in 2025, we renamed the North America and Australia segment
to the North America segment.
(b) Carnival Corporation consists primarily of cruise brands that do not
form part of the Group; however, these brands are included in Carnival
Corporation & plc and thus represent reconciling items.
(c) The U.S. GAAP vs IFRS accounting differences primarily relate to
differences in the carrying value of ships and resulting depreciation expense
and lease accounting.
Revenue by geographic areas, which are based on where our guests are sourced,
were as follows:
Six Months Ended,
(in millions) May 31, 2025 May 31, 2024
Europe $3,248 $2,915
North America 279 284
Australia 596 672
Other 474 477
$4,597 $4,347
NOTE 11 - Related Party Transactions
During the six months ended May 31, 2025, we sold two ships, with a total
passenger-capacity of 5,240 berths, to Carnival Corporation for a total of
$375 million. These ships were subsequently leased back to Carnival plc.
During the six months ended May 31, 2024, we sold one ship with a
passenger-capacity of 4,240 berths to Carnival Corporation for $699 million.
The amounts owed from the Carnival Corporation group in connection with these
non-cash transactions reduced the payable owed by Carnival plc to the Carnival
Corporation group.
During the six months ended May 31, 2025, we completed the purchase of two
ships, with a total passenger-capacity of 8,850 berths from Carnival Holdings
(Bermuda) Limited, a subsidiary of Carnival Corporation. The amounts owed to
the Carnival Corporation group in connection with these non-cash transactions
increased the payable owed by Carnival plc to the Carnival Corporation group.
During the six months ended May 31, 2025 and 2024, the Group had lease-related
expenses of $75 million and $78 million, in respect of ships leased from
Carnival Holdings (Bermuda) Limited and Carnival Holdings (Bermuda) II
Limited.
During the six months ended May 31, 2025 and 2024, Holland America Line and
Princess Cruises purchased land tours from us totaling $19 million. In
addition, during the six months ended May 31, 2025 and 2024 we sold pre- and
post-cruise vacations, shore excursions and transportation services to the
Carnival Corporation group.
During 2025, the Group had ship charter and management agreements with
Princess Cruises and Carnival Cruise Line for ships operating in Australia and
Asia. The total charter and management expenses, relating to these agreements
were $222 million and $293 million for the six months ended May 31, 2025 and
2024.
Carnival Corporation and its subsidiary, Carnival Investments Limited owned
42.9 million, or 19.7% at May 31, 2025 and November 30, 2024 of Carnival plc's
ordinary shares, which are non-voting while they are owned by Carnival
Corporation and its subsidiary.
Within the DLC arrangement, there are instances where the Group provides
services to Carnival Corporation and also where Carnival Corporation provides
services to the Group.
NOTE 12 - Seasonality
Our passenger ticket revenues are seasonal. Demand for cruises has been
greatest during our third quarter, which includes the Northern Hemisphere
summer months. This higher demand during the third quarter results in higher
ticket prices and occupancy levels and, accordingly, the largest share of our
operating income is typically earned during this period. Our results are also
impacted by ships being taken out-of-service for planned maintenance, which we
schedule during non-peak seasons. In addition, substantially all of Holland
America Princess Alaska Tours' revenue and operating income is generated from
May through September in conjunction with Alaska's cruise season.
NOTE 13 - Fair Value Measurements and Derivative Instruments, Hedging
Activities and Financial Risks
Fair Value Measurements
Classes and Categories of Financial Instruments
The Group has the following classes of financial assets: cash and cash
equivalents, trade receivables, amount owed from the Carnival Corporation
group and other long-term receivables. The Group has the following classes of
financial liabilities: debt, lease liabilities, amount owed to the Carnival
Corporation group, trade payables and accruals. For the carrying amounts refer
to respective notes.
Substantially all financial assets and liabilities are carried at amortized
cost, except for investments in money market funds which are presented at fair
value. The fair values of our financial assets and financial liabilities
approximate their book values with exception of debt as described below.
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.
All of the financial assets and liabilities measured at fair value are
classified as level 2 using the fair value hierarchy, except for money market
funds, which are classified as level 1.
Financial Instruments that are not Measured at Fair Value
May 31, 2025 November 30, 2024
Carrying Value Fair Value Carrying Value Fair Value
(in millions)
Liabilities
Fixed rate debt (a) $5,558 $5,115 $5,440 $4,984
Floating rate debt (a) 2,265 2,199 2,108 2,029
Total 7,823 7,314 7,548 7,013
Less: unamortized debt issuance costs and discounts (361) (355)
Total Debt, net of unamortized debt issuance costs and discounts $7,463 $7,194
(a) The debt amounts above are categorized as Level 2. The
fair values of our publicly-traded notes were based on their unadjusted quoted
market prices in markets that are not sufficiently active. The fair values of
our other debt were estimated based on current market interest rates being
applied to this debt.
NOTE 14 - Principal Risks and Uncertainties
The principal risks and uncertainties affecting our business activities are
included in Item 4. Risk Management and/or Mitigation of Principal and
Emerging Risks within our 2024 Annual Report. There have been no changes to
our identified principal or emerging risks since the issuance of our 2024
Annual Report. Our principal risks and uncertainties are summarized below. The
ordering and lettering of our risks is not intended to reflect any Company
indication of priority or likelihood.
Operational Risk Factors
a. Events and conditions around the world, including geopolitical
uncertainty, war and other military actions, pandemics, inflation, higher fuel
prices, higher interest rates and other general concerns impacting the ability
or desire of people to travel could lead to a decline in demand for cruises as
well as have significant negative impacts on our financial condition and
operations.
b. Incidents concerning our ships, guests or the cruise industry may
negatively impact the satisfaction of our guests and crew and lead to
reputational damage.
c. Changes in and non-compliance with laws and regulations under which
we operate, such as those relating to health, environment, safety and
security, data privacy and protection, anti-money laundering, anti-corruption,
economic sanctions, trade protection, labor and employment, and tax may be
costly and lead to litigation, enforcement actions, fines, penalties and
reputational damage.
d. Factors associated with climate change, including evolving and
increasing regulations, increasing concerns about climate change and the shift
in climate conscious consumerism and stakeholder scrutiny, and increasing
frequency and/or severity of adverse weather conditions could have a material
impact on our business.
e. Inability to meet or achieve our targets, goals, aspirations,
initiatives, and our public statements and disclosures regarding them,
including those related to sustainability matters, may expose us to risks that
may adversely impact our business.
f. Cybersecurity incidents and data privacy breaches, as well as
disruptions and other damages to our principal offices, information technology
operations and system networks and failure to keep pace with developments in
technology have adversely impacted and may in the future materially adversely
impact our business operations, the satisfaction of our guests and crew and
may lead to fines, penalties and reputational damage.
g. The loss of key team members, our inability to recruit or retain
qualified shoreside and shipboard team members and increased labor costs could
have an adverse effect on our business and results of operations.
h. Increases in fuel prices, changes in the types of fuel consumed and
availability of fuel supply may adversely impact our scheduled itineraries and
costs.
i. We rely on suppliers who are integral to the operations of our
businesses. These suppliers and service providers may be unable to deliver on
their commitments, which could negatively impact our business.
j. Fluctuations in foreign currency exchange rates may adversely
impact our financial results.
k. Overcapacity and competition in the cruise and land-based vacation
industry may negatively impact our cruise sales, pricing and destination
options.
l. Inability to implement our shipbuilding programs and ship
repairs, maintenance and refurbishments may adversely impact our business
operations and the satisfaction of our guests.
Financial Risk Factors
a. We require a significant amount of cash to service our debt and
sustain our operations. Our ability to generate cash depends on many factors,
including those beyond our control, and we may not be able to generate cash
required to service our debt and sustain our operations.
b. Our substantial debt could adversely affect our financial health
and operating flexibility.
NOTE 15 - Responsibility Statement
The Directors confirm that to the best of their knowledge the Interim
Financial Statements included as Schedule A to this release have been prepared
in accordance with IAS 34 as adopted by the UK, and that the half-yearly
financial report includes a fair review of the information required by DTR
4.2.7R and DTR 4.2.8R of the Disclosure Guidance and Transparency Rules of the
FCA.
The Directors of Carnival plc are listed in the Carnival plc Annual Report for
the year ended November 30, 2024, with the exception of the following change
in the period: Sara Mathew stepped down in April 2025. No new Directors have
been appointed during the six months ended May 31, 2025. A list of current
Directors is maintained and is available for inspection on the Group's website
at www.carnivalplc.com (http://www.carnivalplc.com/) .
By order of the Board
/s/ Micky Arison /s/ Josh Weinstein
Micky Arison Josh Weinstein
Chair of the Board of Directors Chief Executive Officer and Director
June 26, 2025 June 26, 2025
SCHEDULE B
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,
2025 2024 2025 2024
Revenues
Passenger ticket $4,104 $3,754 $7,936 $7,370
Onboard and other 2,224 2,027 4,202 3,817
6,328 5,781 12,139 11,187
Operating Expenses
Commissions, transportation and other 780 732 1,631 1,552
Onboard and other 671 628 1,271 1,178
Payroll and related 640 614 1,280 1,237
Fuel 468 525 933 1,030
Food 372 360 726 706
Other operating 955 938 1,813 1,800
Cruise and tour operating expenses 3,886 3,798 7,653 7,502
Selling and administrative 816 789 1,663 1,603
Depreciation and amortization 692 634 1,346 1,247
5,394 5,221 10,662 10,352
Operating Income 934 560 1,477 836
Nonoperating Income (Expense)
Interest income 12 25 18 58
Interest expense, net of capitalized interest (341) (450) (718) (921)
Debt extinguishment and modification costs (4) (33) (255) (66)
Other income (expense), net (20) (7) (12) (25)
(353) (464) (967) (953)
Income (Loss) Before Income Taxes 582 96 510 (118)
Income Tax Expense, Net (17) (5) (24) (5)
Net Income (Loss) $565 $92 $486 $(123)
Earnings Per Share
Basic $0.43 $0.07 $0.37 $(0.10)
Diluted $0.42 $0.07 $0.37 $(0.10)
The accompanying notes are an integral part of these consolidated financial
statements.
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(in millions)
Three Months Ended May 31, Six Months Ended
May 31,
2025 2024 2025 2024
Net Income (Loss) $565 $92 $486 $(123)
Items Included in Other Comprehensive Income (Loss)
Change in foreign currency translation adjustment 227 7 215 7
Other 6 11 6 12
Other Comprehensive Income (Loss) 233 18 221 19
Total Comprehensive Income (Loss) $798 $110 $708 $(104)
The accompanying notes are an integral part of these consolidated financial
statements.
CARNIVAL CORPORATION & PLC
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except par values)
May 31, November 30, 2024
2025
ASSETS
Current Assets
Cash and cash equivalents $2,146 $1,210
Trade and other receivables, net 569 590
Inventories 476 507
Prepaid expenses and other 1,158 1,070
Total current assets 4,349 3,378
Property and Equipment, Net 42,751 41,795
Operating Lease Right-of-Use Assets, Net 1,365 1,368
Goodwill 579 579
Other Intangibles 1,178 1,163
Other Assets 943 775
$51,165 $49,057
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt $1,392 $1,538
Current portion of operating lease liabilities 177 163
Accounts payable 1,198 1,133
Accrued liabilities and other 2,072 2,358
Customer deposits 8,082 6,425
Total current liabilities 12,920 11,617
Long-Term Debt 25,862 25,936
Long-Term Operating Lease Liabilities 1,217 1,239
Other Long-Term Liabilities 1,159 1,012
Contingencies and Commitments
Shareholders' Equity
Carnival Corporation common stock, $0.01 par value; 1,960 shares authorized; 13 13
1,298 shares issued at 2025 and 1,294 shares issued at 2024
Carnival plc ordinary shares, $1.66 par value; 217 shares issued at 2025 and 361 361
2024
Additional paid-in capital 17,208 17,155
Retained earnings 2,543 2,101
Accumulated other comprehensive income (loss) ("AOCI") (1,753) (1,975)
Treasury stock, 131 shares at 2025 and 130 shares at 2024 of Carnival (8,364) (8,404)
Corporation and 72 shares at 2025 and 73 shares at 2024 of Carnival plc, at
cost
Total shareholders' equity 10,007 9,251
$51,165 $49,057
The accompanying notes are an integral part of these consolidated financial
statements.
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in millions)
Six Months Ended
May 31,
2025 2024
OPERATING ACTIVITIES
Net income (loss) $486 $(123)
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities
Depreciation and amortization 1,346 1,247
Loss on debt extinguishment 253 63
(Income) loss from equity-method investments 3 7
Share-based compensation 45 30
Amortization of discounts and debt issue costs 60 72
Non-cash lease expense 77 67
Gain on sales of ships (103) -
Greenhouse gas regulatory expense 29 15
Other 72 39
2,268 1,417
Changes in operating assets and liabilities
Receivables 22 38
Inventories 33 14
Prepaid expenses and other assets (209) 449
Accounts payable (10) (52)
Accrued liabilities and other (382) (30)
Customer deposits 1,596 1,971
Net cash provided by (used in) operating activities 3,317 3,807
INVESTING ACTIVITIES
Purchases of property and equipment (1,458) (3,457)
Proceeds from sales of ships and other 312 -
Other (45) 72
Net cash provided by (used in) investing activities (1,191) (3,384)
FINANCING ACTIVITIES
Principal repayments of long-term debt (5,064) (4,072)
Debt issuance costs (41) (117)
Debt extinguishment costs (197) (41)
Proceeds from issuance of long-term debt 4,082 3,048
Other 10 (1)
Net cash provided by (used in) financing activities (1,211) (1,183)
Effect of exchange rate changes on cash, cash equivalents and restricted cash 24 (6)
Net increase (decrease) in cash, cash equivalents and restricted cash 940 (767)
Cash, cash equivalents and restricted cash at beginning of period 1,231 2,436
Cash, cash equivalents and restricted cash at end of period $2,171 $1,669
The accompanying notes are an integral part of these consolidated financial
statements.
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(UNAUDITED)
(in millions)
Three Months Ended
Common Ordinary Additional Retained AOCI Treasury Total shareholders' equity
stock shares paid-in earnings stock
capital (accumulated deficit)
At February 28, 2025 $13 $361 $17,180 $1,991 $(1,986) $(8,376) $9,182
Net income (loss) - - - 565 - - 565
Other comprehensive income (loss) - - - - 233 - 233
Issuance of treasury shares for vested share-based awards - - - (12) - 12 -
Share-based compensation and other - - 28 - - (1) 27
At May 31, 2025 $13 $361 $17,208 $2,543 $(1,753) $(8,364) $10,007
At February 29, 2024 $13 $361 $16,679 $(29) $(1,938) $(8,404) $6,682
Net income (loss) - - - 92 - - 92
Other comprehensive income (loss) - - - - 18 - 18
Share-based compensation and other - - 22 - - - 22
At May 31, 2024 $13 $361 $16,701 $62 $(1,919) $(8,404) $6,814
Six Months Ended
Common Ordinary Additional Retained AOCI Treasury Total shareholders' equity
stock shares paid-in earnings stock
capital
At November 30, 2024 $13 $361 $17,155 $2,101 $(1,975) $(8,404) $9,251
Net income (loss) - - - 486 - - 486
Other comprehensive income (loss) - - - - 221 - 221
Issuance of treasury shares for vested share-based awards - - - (44) - 44 -
Share-based compensation and other - - 52 - - (5) 48
At May 31, 2025 $13 $361 $17,208 $2,543 $(1,753) $(8,364) $10,007
At November 30, 2023 $12 $361 $16,712 $185 $(1,939) $(8,449) $6,882
Net income (loss) - - - (123) - - (123)
Other comprehensive income (loss) - - - - 19 - 19
Issuance of treasury shares for vested share-based awards - - (47) - - 47 -
Share-based compensation and other - - 36 - - (2) 35
At May 31, 2024 $13 $361 $16,701 $62 $(1,919) $(8,404) $6,814
The accompanying notes are an integral part of these consolidated financial
statements.
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."
Basis of Presentation
The consolidated financial statements are unaudited and, in the opinion of our
management, contain all adjustments, consisting of only normal recurring
adjustments, necessary for a fair statement. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America
("GAAP") have been condensed or omitted as permitted by such Securities and
Exchange Commission rules and regulations. The preparation of our interim
consolidated financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported and disclosed. We
have made reasonable estimates and judgments of such items within our
financial statements and there may be changes to those estimates in future
periods. Our operations are seasonal and results for interim periods are not
necessarily indicative of the results for the entire year.
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 2024 joint Annual Report on
Form 10-K ("Form 10-K") filed with the U.S. Securities and Exchange Commission
("SEC") on January 27, 2025.
For 2024, we reclassified $15 million from other to greenhouse gas regulatory
expense in the Consolidated Statements of Cash Flows to conform to the current
year presentation.
Brand Realignment
In March 2025, we sunset the P&O Cruises (Australia) brand and folded its
operations into Carnival Cruise Line.
Accounting Pronouncements
In November 2023, the FASB issued guidance, Segment Reporting - Improvements
to Reportable Segment Disclosures. This guidance requires annual and interim
disclosure of significant segment expenses that are provided to the chief
operating decision maker ("CODM") as well as interim disclosures for all
reportable segments' measure of profit or loss and assets. This guidance also
requires disclosure of the title and position of the CODM and an explanation
of how the CODM uses the reported measure of segment profit or loss in
assessing segment performance and deciding how to allocate resources. This
guidance is effective for us for annual periods beginning in 2025 and interim
periods beginning in 2026. While this guidance will not have an effect on our
Consolidated Statements of Income (Loss) or Consolidated Balance Sheets, it
will affect certain segment reporting disclosures.
In December 2023, the FASB issued guidance, Income Taxes - Improvements to
Income Tax Disclosures. This guidance requires disaggregation of rate
reconciliation categories and income taxes paid by jurisdiction, as well as
other amendments relating to income tax disclosures. This guidance is required
to be adopted by us in 2026. We are currently evaluating the impact this
guidance will have on our consolidated financial statements.
In November 2024, the FASB issued guidance, Debt - Debt with Conversion and
Other Options - Induced Conversions of Convertible Debt Instruments. This
guidance clarifies the requirements for determining whether certain
settlements of convertible debt instruments should be accounted for as induced
conversions or extinguishments. This guidance is required to be adopted by us
in 2027. We are currently evaluating the impact this guidance will have on our
consolidated financial statements.
In November 2024, the FASB issued guidance, Income Statement - Reporting
Comprehensive Income - Expense Disaggregation Disclosures - Disaggregation of
Income Statement Expenses. This guidance requires annual and interim
disclosure of disaggregated information for certain costs and expenses. This
guidance is required to be adopted by us in 2028. We are currently evaluating
the impact this guidance will have on our consolidated financial statements.
NOTE 2 - Revenue and Expense Recognition
Guest cruise deposits and advance onboard purchases are initially included in
customer deposits when received. Customer deposits are subsequently recognized
as cruise revenues, together with revenues from onboard and other activities,
and all associated direct expenses of a voyage are recognized as cruise
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 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. Future travel discount vouchers are included as a reduction of
cruise passenger ticket revenues when such vouchers are utilized. 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 expenses of these services are included in prepaid expenses and other
when paid prior to the start of a voyage and are subsequently recognized in
transportation expenses at the time of revenue recognition. The cost of
prepaid air and other transportation expenses at May 31, 2025 and November 30,
2024 were $228 million and $219 million. The proceeds that we collect from
the sales of third-party shore excursions are included in onboard and other
revenues and the related expenses are included in onboard and other expenses.
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.
Fees, taxes and charges that vary with guest head counts are expensed in
commissions, transportation and other expenses when the corresponding revenues
are recognized. The remaining portion of fees, taxes and charges are expensed
in other operating expenses when the corresponding revenues are recognized.
Revenues and expenses from our hotel and transportation operations, which are
included in our Tour and Other segment, are recognized at the time the
services are performed.
Customer Deposits
Our payment terms generally require an initial deposit to confirm a
reservation, with the balance due prior to the voyage. Cash received from
guests in advance of the cruise is recorded in customer deposits and in other
long-term liabilities on our Consolidated Balance Sheets. These amounts
include refundable deposits. We had total customer deposits of $8.5 billion as
of May 31, 2025 and $6.8 billion as of November 30, 2024. During the six
months ended May 31, 2025 and 2024, we recognized revenues of $5.1 billion
and $4.7 billion related to our customer deposits as of November 30, 2024 and
2023. Our customer deposits balance changes due to the seasonal nature of cash
collections, which typically results from higher ticket prices and occupancy
levels during the third quarter, the recognition of revenue, refunds of
customer deposits and foreign currency changes.
Trade and Other Receivables
Although we generally require full payment from our customers prior to or
concurrently with their cruise, we grant credit terms to a relatively small
portion of our revenue source. We have receivables from credit card merchants
and travel agents for cruise ticket purchases and onboard revenue. These
receivables are included within trade and other receivables, net and are less
allowances for expected credit losses.
Contract Costs
We recognize incremental travel agent commissions and credit and debit card
fees incurred as a result of obtaining the ticket contract as assets when paid
prior to the start of a voyage. We record these amounts within prepaid
expenses and other and subsequently recognize these amounts as commissions,
transportation and other at the time of revenue recognition or at the time of
voyage cancellation. We had incremental costs of obtaining contracts with
customers recognized as assets of $445 million as of May 31, 2025 and
$336 million as of November 30, 2024.
NOTE 3 - Debt
May 31, November 30,
(in millions) Maturity Rate (a) 2025 2024
Secured Subsidiary Guaranteed
Notes
Notes Jun 2027 7.88% $192 $192
Notes Aug 2028 4.00% 2,406 2,406
Notes Aug 2029 7.00% 500 500
Loans
Floating rate Aug 2027 - Oct 2028 SOFR + 2.00% (b) 2,449 2,449
Total Secured Subsidiary Guaranteed 5,547 5,547
Senior Priority Subsidiary Guaranteed
Notes (c) May 2028 10.38% - 2,030
Unsecured Subsidiary Guaranteed
Notes
Notes (d) Mar 2026 7.63% - 1,351
Notes Mar 2027 5.75% 2,722 2,722
Convertible Notes Dec 2027 5.75% 1,131 1,131
Notes May 2029 6.00% 2,000 2,000
EUR Notes Jan 2030 5.75% 569 528
Notes Mar 2030 5.75% 1,000 -
Notes (e) Jun 2030 10.50% - 1,000
Notes Jun 2031 5.88% 1,000 -
Notes Feb 2033 6.13% 2,000 -
Loans
EUR floating rate (f) Apr 2025 EURIBOR + 3.25% - 211
Export Credit Facilities
Floating rate Dec 2031 SOFR + 1.20% (g) 480 514
Fixed rate Aug 2027 - Dec 2032 2.42 - 3.38% 2,176 2,370
EUR floating rate Oct 2026 - Nov 2034 EURIBOR + 0.55 - 0.80% 2,596 2,590
EUR fixed rate Feb 2031 - Sep 2037 1.05 - 4.00% 5,523 5,386
Total Unsecured Subsidiary Guaranteed 21,197 19,803
Unsecured (No Subsidiary Guarantee)
Notes
Notes Jan 2028 6.65% 200 200
EUR Notes Oct 2029 1.00% 682 633
Loans
EUR floating rate (f) Apr 2029 EURIBOR + 1.95% 341 -
Total Unsecured (No Subsidiary Guarantee) 1,223 833
Total Debt 27,967 28,213
Less: unamortized debt issuance costs and discounts (713) (738)
Total Debt, net of unamortized debt issuance costs and discounts 27,254 27,475
Less: current portion of long-term debt (1,392) (1,538)
Long-Term Debt $25,862 $25,936
(a) The reference rates, together with any applicable credit adjustment
spread, for all of our variable debt have 0.00% to 0.75% floors.
(b) As part of the repricing of our senior secured term loans, we amended
the loans' margin from 2.75% to 2.00%. See "Repricing of Senior Secured Term
Loans" below.
(c) See "2033 Senior Unsecured Notes" below.
(d) See "2031 Senior Unsecured Notes" below.
(e) See "2030 Senior Unsecured Notes" below.
(f) In April 2025, the euro floating rate loan agreement was amended to
increase the principal amount by $112 million, extend its maturity from April
2025 to April 2029, amend the loan's margin from 3.25% to 1.95% and remove the
subsidiary guarantee.
(g) Includes applicable credit adjustment spread.
As of May 31, 2025, Carnival Corporation and/or Carnival plc was the primary
obligor of all our outstanding debt excluding the following:
• $3.0 billion under an undrawn $1.9 billion, €0.9 billion and
£0.1 billion multi-currency revolving credit facility ("Revolving Facility")
of Carnival Holdings (Bermuda) II Limited ("Carnival Holdings II"), a
subsidiary of Carnival Corporation
• $0.9 billion under an export credit facility of Sun Princess
Limited, a subsidiary of Carnival Corporation
• $0.2 billion under an export credit facility of Sun Princess II
Limited, a subsidiary of Carnival Corporation
As of May 31, 2025, all of our outstanding debt was issued or guaranteed by
substantially the same entities with the exception of the following:
• The Revolving Facility of Carnival Holdings II, which does not
guarantee our other outstanding debt
• The export credit facilities of Sun Princess Limited and Sun
Princess II Limited, which do not guarantee our other outstanding debt
As of May 31, 2025, the scheduled maturities of our debt are as follows:
(in millions)
Year Principal Payments
Remainder of 2025 $692
2026 1,400
2027 4,958
2028 6,758
2029 4,780
Thereafter 9,378
Total $27,967
Revolving Facility
As of May 31, 2025, Carnival Holdings II had $3.0 billion available for
borrowing under the Revolving Facility.
New Revolving Facility
In June 2025, Carnival Corporation and Carnival plc entered into a
$4.5 billion unsecured multi-currency revolving credit facility ("New
Revolving Facility"). The New Revolving Facility replaced the Revolving
Facility of Carnival Holdings II. The New Revolving Facility matures in June
2030 and contains an accordion feature, allowing for up to $1.0 billion of
additional revolving commitments. We may borrow or utilize available amounts
under the New Revolving Facility through June 2030, subject to the
satisfaction of the conditions in the facility.
Borrowings under the New Revolving Facility will bear interest at a rate of
term SOFR, EURIBOR, or daily compounding SONIA, as applicable, plus a margin
based on the long-term credit ratings of Carnival Corporation. In addition, we
are required to pay certain fees on the aggregate commitments under the New
Revolving Facility.
Repricing of Senior Secured Term Loans
In January 2025, we entered into amendments with the lender syndicate to
reprice the outstanding principal amounts of our first-priority senior secured
term loan facility maturing in 2027 and our first-priority senior secured term
loan facility maturing in 2028 ("Repriced Loans"), which are included within
the total Secured Subsidiary Guaranteed Loans balance in the debt table above.
The Repriced Loans bear interest at a rate per annum equal to SOFR with a
0.75% floor, plus a margin equal to 2.00%.
2030 Senior Unsecured Notes
In February 2025, we issued $1.0 billion aggregate principal amount of 5.75%
senior unsecured notes due 2030. We used the net proceeds from the issuance,
together with cash on hand, to redeem the outstanding principal amount of the
10.50% senior unsecured notes due 2030.
2033 Senior Unsecured Notes
In February 2025, we issued $2.0 billion aggregate principal amount of 6.13%
senior unsecured notes due 2033. We used the net proceeds from the issuance,
together with cash on hand, to redeem the outstanding principal amount of the
10.38% senior priority notes due 2028.
2031 Senior Unsecured Notes
In May 2025, we issued $1.0 billion aggregate principal amount of 5.88%
senior unsecured notes due 2031. We used the net proceeds from the issuance,
together with cash on hand, to redeem the outstanding principal amount of the
7.63% senior unsecured notes due 2026.
Debt Extinguishment and Modification Costs
During the three and six months ended May 31, 2025, we recognized a total of
$4 million and $255 million of debt extinguishment and modification costs,
including $197 million of premium paid on redemption during the six months
ended May 31, 2025, within our Consolidated Statements of Income (Loss) as a
result of the above transactions.
Export Credit Facility Borrowings
Our export credit facilities are due in semi-annual installments through 2037.
As of May 31, 2025, we had $8.4 billion of undrawn export credit facilities
to fund ship deliveries planned through 2033. As of May 31, 2025, the net book
value of our ships subject to negative pledges pursuant to export credit
facilities was $18.7 billion.
Collateral and Priority Pool
As of May 31, 2025, the net book value of our ships and ship improvements,
excluding ships under construction, is $39.8 billion. Our secured debt is
secured on a first-priority basis by certain collateral, which includes ships
and certain assets related to those ships and material intellectual property
(combined net book value of approximately $22.7 billion, including
$21.1 billion related to ships and certain assets related to those ships) as
of May 31, 2025 and certain other assets.
As of May 31, 2025, $2.8 billion in net book value of our ship and ship
improvements relate to the priority pool ships included in the priority pool
of three unencumbered ships (the "Revolving Facility Subject Ships") for our
Revolving Facility. As of May 31, 2025, there was no change in the identity of
the Revolving Facility Subject Ships.
Covenant Compliance
As of May 31, 2025, our Revolving Facility, unsecured loan and export credit
facilities contain certain covenants listed below:
• Maintain minimum interest coverage (adjusted EBITDA to
consolidated net interest charges, as defined in the agreements) as follows:
◦ For our export credit facilities and our Revolving Facility, at
a ratio of not less than 2.0 to 1.0 for the May 31, 2025 testing date, at a
ratio of not less than 2.5 to 1.0 for the August 31, 2025 and November 30,
2025 testing dates, and at a ratio of not less than 3.0 to 1.0 for the
February 28, 2026 testing date onwards and as applicable through their
respective maturity dates
◦ For our unsecured loan, at a ratio of not less than 2.0 to 1.0
for the May 31, 2025 testing date through the maturity date
• For certain of our unsecured loan and export credit facilities,
maintain minimum issued capital and consolidated reserves (as defined in the
agreements) of $5.0 billion
• Limit our debt to capital (as defined in the agreements)
percentage to a percentage not to exceed 65%
• Maintain minimum liquidity of $1.5 billion
• Adhere to certain restrictive covenants through August 2027
(subject to such covenants terminating if we reach an investment grade credit
rating in accordance with the agreement governing the Revolving Facility)
• Limit the amounts of our secured assets as well as secured and
other indebtedness
At May 31, 2025, 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 and/or cross-acceleration clauses
therein, substantially all of our outstanding debt and derivative contract
payables could become due, and our 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.
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. We have insurance coverage for
certain of these claims and actions, or any settlement of these claims and
actions, 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, the Havana Docks Corporation filed a
lawsuit 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. On March 21, 2022, the court
granted summary judgment in favor of Havana Docks Corporation as to liability.
On December 30, 2022, the court entered judgment against Carnival Corporation
in the amount of $110 million plus $4 million in fees and costs. We
appealed. On October 22, 2024, the Court of Appeals for the 11(th) Circuit
reversed the District Court's judgment against us. On March 6, 2025, Havana
Docks filed a petition for certiorari with the Supreme Court of the United
States and we responded. Following resolution of that petition, the case will
be remanded to the District Court for further proceedings. We believe the
ultimate outcome of this matter will not have a material impact on our
consolidated financial statements.
As of May 31, 2025, two purported class actions brought against us by former
guests in the Federal Court in Australia and in Italy remain pending, as
previously disclosed. These actions include 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 our ships. On October 24, 2023, the court in the
Australian matter held that we were liable for negligence and for breach of
consumer protection warranties as it relates to the lead plaintiff. The court
ruled that the lead plaintiff was not entitled to any pain and suffering or
emotional distress damages on the negligence claim and awarded medical costs.
In relation to the consumer protection warranties claim, the court found that
distress and disappointment damages amounted to no more than the refund
already provided to guests and therefore made no further award. Further
proceedings will determine the applicability of this ruling to the remaining
class participants. On March 31, 2025, the court in the Italian matter
returned a ruling rejecting most of the plaintiffs' claims and awarding a
half-price fare reduction for certain passengers. Plaintiffs have appealed the
ruling. We continue to take actions to defend against the above claims. We
believe the ultimate outcome of these matters will not have a material impact
on our consolidated financial statements.
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 range from inadvertent events to malicious motivated attacks.
We have incurred legal and other costs in connection with cyber incidents that
have impacted us. The penalties and settlements paid in connection with cyber
incidents over the last three years were not material. While these incidents
did not have a material adverse effect on our business, results of operations,
financial position or liquidity, no assurances can be given about the future
and we may be subject to future attacks, incidents or litigation that could
have such a material adverse effect.
On March 14, 2022, the U.S. Department of Justice and the U.S. Environmental
Protection Agency notified us of potential civil penalties and injunctive
relief for alleged Clean Water Act violations by owned and operated vessels
covered by the 2013 Vessel General Permit. We are working with these agencies
to reach a resolution of this matter. We believe the ultimate outcome will not
have a material impact on our consolidated financial statements.
Under the European Union Treaty certain economic benefits that are provided
under Italian law are subject to approval on a periodic basis by the European
Commission. In May 2025, the European Commission announced it had approved
these benefits through December 31, 2033. The full text of the decision is yet
to be made public. One of our subsidiaries continues to receive and recognize
these benefits. We will assess the details of the decision once made public.
If the European Commission denied a portion of the benefits we recognized, the
Italian Government may be required to retroactively disallow them and seek
reimbursement from us, which would result in a reversal of their recognition.
We do not expect the outcome to have a material impact on our consolidated
financial statements.
Other Contingent Obligations
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.
We have agreements with a number of credit card processors that transact
customer deposits related to our cruise vacations. Certain of these agreements
allow the credit card processors to request, under certain circumstances, that
we provide a capped reserve fund in cash. 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.
Ship Commitments
As of May 31, 2025, our new ship growth capital commitments were $0.9 billion
for the remainder of 2025 and $0.5 billion, $1.6 billion, $1.4 billion,
$1.8 billion and $6.3 billion for the years ending November 30, 2026, 2027,
2028, 2029 and thereafter.
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, 2025 November 30, 2024
Carrying Fair Value Carrying Fair Value
Value Value
(in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Liabilities
Fixed rate debt (a) $22,101 $- $22,526 $- $22,449 $- $23,241 $-
Floating rate debt (a) 5,866 - 5,783 - 5,764 - 5,685 -
Total $27,967 $- $28,309 $- $28,213 $- $28,927 $-
(a) The debt amounts above do not include the impact of interest rate
swaps or debt issuance costs and discounts. The fair values of our
publicly-traded notes were based on their unadjusted quoted market prices in
markets that are not sufficiently active to be Level 1 and, accordingly, are
considered Level 2. The fair values of our other debt were estimated based on
current market interest rates being applied to this debt.
Financial Instruments that are Measured at Fair Value on a Recurring Basis
May 31, 2025 November 30, 2024
(in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Assets
Cash equivalents (a) $1,648 $- $- $404 $- $-
Derivative financial instruments - - - - 2 -
Total $1,648 $- $- $404 $2 $-
Liabilities
Derivative financial instruments $- $5 $- $- $4 $-
Total $- $5 $- $- $4 $-
(a) Consists of money market funds and cash investments with original
maturities of less than 90 days.
Nonfinancial Instruments that are Measured at Fair Value on a Nonrecurring
Basis
Valuation of Goodwill and Trademarks
As of May 31, 2025 and November 30, 2024, goodwill for our North America
segment was $579 million.
Trademarks
(in millions) North America Europe Total
Segment Segment
November 30, 2024 $927 $234 $1,161
Exchange movements - 16 16
May 31, 2025 $927 $250 $1,177
Derivative Instruments and Hedging Activities
(in millions) Balance Sheet Location May 31, 2025 November 30, 2024
Derivative assets
Derivatives designated as hedging instruments
Interest rate swaps (a) Prepaid expenses and other $- $2
Total derivative assets $- $2
Derivative liabilities
Derivatives designated as hedging instruments
Interest rate swaps (a) Other long-term liabilities $5 $4
Total derivative liabilities $5 $4
(a) We have interest rate swaps whereby we receive floating interest rate
payments in exchange for making fixed interest rate payments. These interest
rate swap agreements effectively changed $1.0 billion at May 31, 2025 and
November 30, 2024 of SOFR-based variable rate debt to fixed rate debt. As of
May 31, 2025 and November 30, 2024, the SOFR-based interest rate swaps settle
through 2027 and were designated as cash flow hedges. At November 30, 2024, we
had a EURIBOR-based interest rate swap that was not designated as a cash flow
hedge and effectively changed $11 million of EURIBOR-based floating rate euro
debt to fixed rate euro debt. The EURIBOR-based interest rate swap matured in
March 2025.
Our derivative contracts include rights of offset with our counterparties. As
of May 31, 2025 and November 30, 2024, we did not have any counterparties with
multiple derivative contracts.
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 Six Months Ended
May 31, May 31,
(in millions) 2025 2024 2025 2024
Gains (losses) recognized in AOCI:
Interest rate swaps - cash flow hedges $- $20 $(1) $33
(Gains) losses reclassified from AOCI - cash flow hedges:
Interest rate swaps - Interest expense, net of capitalized interest $2 $(8) $4 $(20)
Foreign currency zero cost collars - Depreciation and amortization $4 $- $3 $1
Gains (losses) recognized on derivative instruments (amount excluded from
effectiveness testing - net investment hedges)
Cross currency swaps - Interest expense, net of capitalized interest $- $- $- $2
The amount of gains and losses on derivatives not designated as hedging
instruments recognized in earnings during the three and six months ended May
31, 2025 and estimated cash flow hedges' unrealized gains and losses that are
expected to be reclassified to earnings in the next twelve months are 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 fleet optimization, energy efficiency, itinerary efficiency, and new
technologies and alternative fuels.
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 consider hedging
certain of our ship commitments and net investments in foreign operations. The
financial impacts of our hedging instruments generally offset the changes in
the underlying exposures being hedged.
Operational Currency Risks
Our operations primarily utilize the U.S. dollar, Euro, Sterling or the
Australian dollar as their functional currencies. Our operations also have
revenue and expenses denominated in non-functional currencies. Movements in
foreign currency exchange rates affect our consolidated 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 have euro-denominated debt which
provides an economic offset for our operations with euro functional currency.
In addition, we have in the past and may in the future utilize derivative
financial instruments, such as cross currency swaps, to manage our exposure to
investment currency risks.
Newbuild Currency Risks
Our shipbuilding contracts are typically denominated in euros. At May 31,
2025, our newbuild currency exchange rate risk relates to euro-denominated
newbuild contract payments for non-euro functional currency brands. The cost
of shipbuilding orders that we may place in the future that are denominated in
a different currency than our cruise brands' functional currency will be
affected by foreign currency exchange rate fluctuations. These foreign
currency exchange rate fluctuations may affect our decision to order new
cruise ships. We have in the past and may in the future utilize derivative
financial instruments, such as foreign currency derivatives, to manage our
exposure to newbuild currency risks. Our decisions to hedge non-functional
currency ship commitments for our cruise brands are 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.
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,
refinancing of existing debt 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 and
cash equivalents, investments, notes receivables, reserve funds related to
customer deposits (when required), future financing facilities, contingent
obligations, derivative instruments, insurance contracts 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 and new ship progress payments to
shipyards
We also monitor the creditworthiness of travel agencies and tour operators and
credit and debit card providers to which we extend credit in the normal course
of our business. Our credit exposure also includes contingent obligations
related to cash payments received directly by travel agents and tour operators
for cash collected by them on cruise sales in certain European countries where
we are obligated to honor our guests' cruise payments made by them to their
travel agents and tour operators regardless of whether we have received these
payments.
Concentrations of credit risk associated with 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 and have not experienced significant credit
losses.
NOTE 6 - Segment Information
The chief operating decision maker, who is the Chief Executive Officer of
Carnival Corporation and Carnival plc assesses performance and makes decisions
to allocate resources for Carnival Corporation & plc based upon review of
the results across all of our segments. The operating segments within each of
our reportable segments have been aggregated based on the similarity of their
economic and other characteristics, including geographic guest sourcing. Our
four reportable segments are comprised of (1) North America cruise operations
("North America"), (2) Europe cruise operations ("Europe"), (3) Cruise
Support and (4) Tour and Other.
Our Cruise Support segment includes our portfolio of leading port destinations
and exclusive islands as well as other services, all of which are operated for
the benefit of our cruise brands. Our Tour and Other segment represents the
hotel and transportation operations of Holland America Princess Alaska Tours
and other operations.
Three Months Ended May 31,
(in millions) Revenues Operating Selling Depreciation Operating
expenses and and income (loss)
administrative amortization
2025
North America (a) $4,214 $2,600 $473 $450 $691
Europe 2,011 1,208 248 187 368
Cruise Support 73 46 90 50 (113)
Tour and Other 31 32 5 6 (12)
$6,328 $3,886 $816 $692 $934
2024
North America (a) $3,984 $2,580 $464 $414 $525
Europe 1,697 1,135 230 164 168
Cruise Support 63 39 90 49 (114)
Tour and Other 37 44 6 6 (19)
$5,781 $3,798 $789 $634 $560
Six Months Ended May 31, 2025
(in millions) Revenues Operating Selling Depreciation Operating
expenses and and income (loss)
administrative amortization
2025
North America (a) $8,120 $5,036 $993 $884 $1,207
Europe 3,841 2,478 499 356 508
Cruise Support 145 91 163 95 (204)
Tour and Other 33 47 9 12 (34)
$12,139 $7,653 $1,663 $1,346 $1,477
2024
North America (a) $7,558 $4,982 $966 $813 $797
Europe 3,466 2,386 464 328 288
Cruise Support 122 75 162 94 (210)
Tour and Other 41 59 10 12 (40)
$11,187 $7,502 $1,603 $1,247 $836
(a) Beginning in the first quarter of 2025, we renamed the North America
and Australia segment to the North America segment.
Revenue by geographic areas, which are based on where our guests are sourced,
were as follows:
Three Months Ended Six Months Ended
May 31, May 31,
(in millions) 2025 2024 2025 2024
North America $3,774 $3,542 $7,243 $6,663
Europe 1,964 1,631 3,590 3,199
Australia 315 355 735 781
Other 275 252 570 545
$6,328 $5,781 $12,139 $11,187
NOTE 7 - Earnings Per Share
Three Months Ended Six Months Ended
May 31, May 31,
(in millions, except per share data) 2025 2024 2025 2024
Net income (loss) $565 $92 $486 $(123)
Interest expense on dilutive Convertible Notes 18 - - -
Net income (loss) for diluted earnings per share $582 $92 $486 $(123)
Weighted-average shares outstanding 1,312 1,267 1,310 1,265
Dilutive effect of equity awards 4 4 6 -
Dilutive effect of Convertible Notes 84 - - -
Diluted weighted-average shares outstanding 1,400 1,271 1,316 1,265
Basic earnings per share $0.43 $0.07 $0.37 $(0.10)
Diluted earnings per share $0.42 $0.07 $0.37 $(0.10)
Antidilutive shares excluded from diluted earnings per share computations were
as follows:
Three Months Ended Six Months Ended
May 31, May 31,
(in millions) 2025 2024 2025 2024
Equity awards - - - 5
Convertible Notes - 127 84 127
Total antidilutive securities - 127 84 132
NOTE 8 - Supplemental Cash Flow Information
(in millions) May 31, 2025 November 30, 2024
Cash and cash equivalents (Consolidated Balance Sheets) $2,146 $1,210
Restricted cash (included in prepaid expenses and other and other assets) 25 21
Total cash, cash equivalents and restricted cash (Consolidated Statements $2,171 $1,231
of Cash Flows)
NOTE 9 - Property and Equipment
Ship Sales
During 2025, we completed the sales of one North America segment ship and one
Europe segment ship, which represents a passenger-capacity reduction of 460
berths for our North America segment and 2,700 berths for our Europe segment.
We will continue to operate the North America segment ship through May 2026
and the Europe segment ship through September 2026 under bareboat charter
agreements.
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 statements concerning future
results, operations, strategy, 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.
Because forward-looking statements involve risks and uncertainties, there are
many factors that could cause our actual results, performance or achievements
to differ materially from those expressed or implied by our forward-looking
statements. This note contains important cautionary statements of the known
factors that we consider could materially affect the accuracy of our
forward-looking statements and adversely affect our business, results of
operations and financial position. These factors include, but are not limited
to, the following:
• Events and conditions around the world, including geopolitical
uncertainty, war and other military actions, pandemics, inflation, higher fuel
prices, higher interest rates and other general concerns impacting the ability
or desire of people to travel could lead to a decline in demand for cruises as
well as have significant negative impacts on our financial condition and
operations.
• Incidents concerning our ships, guests or the cruise industry
may negatively 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-money laundering, anti-corruption,
economic sanctions, trade protection, labor and employment, and tax may be
costly and lead to litigation, enforcement actions, fines, penalties and
reputational damage.
• Factors associated with climate change, including evolving and
increasing regulations, increasing concerns about climate change and the shift
in climate conscious consumerism and stakeholder scrutiny, and increasing
frequency and/or severity of adverse weather conditions could have a material
impact on our business.
• Inability to meet or achieve our targets, goals, aspirations,
initiatives, and our public statements and disclosures regarding them,
including those related to sustainability matters, may expose us to risks that
may adversely impact our business.
• Cybersecurity incidents and data privacy breaches, as well as
disruptions and other damages to our principal offices, information technology
operations and system networks and failure to keep pace with developments in
technology have adversely impacted and may in the future materially adversely
impact our business operations, the satisfaction of our guests and crew and
may lead to fines, penalties and reputational damage.
• The loss of key team members, our inability to recruit or retain
qualified shoreside and shipboard team members and increased labor costs could
have an adverse effect on our business and 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 suppliers who are integral to the operations of our
businesses. These suppliers and service providers may be unable to deliver on
their commitments, which could negatively impact our business.
• Fluctuations in foreign currency exchange rates may adversely
impact our financial results.
• Overcapacity and competition in the cruise and land-based
vacation industry may negatively impact 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.
• We require a significant amount of cash to service our debt and
sustain our operations. Our ability to generate cash depends on many factors,
including those beyond our control, and we may not be able to generate cash
required to service our debt and sustain our operations.
• Our substantial debt could adversely affect our financial health
and operating flexibility.
The ordering of the risk factors set forth above is not intended to reflect
our indication of priority or likelihood. Additionally, many of these risks
and uncertainties are currently, and in the future may continue to be,
amplified by our substantial debt balance incurred during the pause of our
guest cruise operations. There may be additional risks that we consider
immaterial or which are unknown.
Forward-looking statements should not be relied upon as a prediction of actual
results. Subject to any continuing obligations under applicable law or any
relevant stock exchange rules, we expressly disclaim any obligation to
disseminate, after the date of this document, any updates or revisions to any
such forward-looking statements to reflect any change in expectations or
events, conditions or circumstances on which any such statements are based.
Forward-looking and other statements in this document may also address our
sustainability progress, plans, and goals (including climate change- and
environmental-related matters). In addition, historical, current, and
forward-looking sustainability- and climate-related statements may be based on
standards and tools for measuring progress that are still developing, internal
controls and processes that continue to evolve, and assumptions and
predictions that are subject to change in the future and may not be generally
shared.
New Accounting Pronouncements
Refer to 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 "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations" that is included in the Form 10-K.
Seasonality
Our passenger ticket revenues are seasonal. Demand for cruises has been
greatest during our third quarter, which includes the Northern Hemisphere
summer months. This higher demand during the third quarter results in higher
ticket prices and occupancy levels and, accordingly, the largest share of our
operating income is typically earned during this period. Our results are also
impacted by ships being taken out-of-service for planned maintenance, which we
schedule during non-peak seasons. In addition, substantially all of Holland
America Princess Alaska Tours' revenue and operating income is generated from
May through September in conjunction with Alaska's cruise season.
Known Trends and Uncertainties
• We believe the volatility in the cost of fuel is reasonably
likely to impact our profitability in both the short and long-term.
• We believe the increasing focus on the reduction of greenhouse
gas emissions and new and evolving related regulatory requirements, are
reasonably likely to have a material negative impact on our future financial
results. We became subject to the EU Emissions Trading System ("ETS") on
January 1, 2024, which includes a three-year phase-in period. The impact of
this regulation in 2024 was $46 million, which represented costs associated
with 40% of emissions under the ETS operational scope. In 2025, 70% of
emissions under the ETS scope will be impacted, and in 2026, all in scope
emissions will be impacted.
Statistical Information
Three Months Ended Six Months Ended
May 31, May 31,
2025 2024 2025 2024
Passenger Cruise Days ("PCDs") (in millions) (a) 25.3 24.3 49.6 47.8
Available Lower Berth Days ("ALBDs") (in millions) (b) (c) 24.2 23.5 47.8 46.5
Occupancy percentage (d) 104% 104% 104% 103%
Passengers carried (in millions) 3.4 3.3 6.5 6.3
Fuel consumption in metric tons (in millions) 0.7 0.7 1.4 1.5
Fuel consumption in metric tons per thousand ALBDs 29.9 31.9 30.1 31.8
Fuel cost per metric ton consumed (excluding European Union Allowance) $614 $684 $628 $685
Currencies (USD to 1)
AUD $0.63 $0.66 $0.63 $0.66
CAD $0.71 $0.73 $0.70 $0.74
EUR $1.11 $1.08 $1.08 $1.08
GBP $1.31 $1.26 $1.28 $1.26
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) For the three months ended May 31, 2025 compared to the three months
ended May 31, 2024, we had a 3.1% capacity increase in ALBDs comprised of a
0.3% capacity increase in our North America segment and an 8.4% capacity
increase in our Europe segment.
Our North America segment's capacity increase was caused by a Carnival Cruise
Line 4,130-passenger capacity ship that transferred from Costa Cruises and
entered into service in April 2024.
The increase in our North America segment's capacity was partially offset by
the following:
• Seabourn 460-passenger capacity ship that left the fleet in
September 2024
• P&O Cruises (Australia) 2,000-passenger capacity ship that
left the fleet in February 2025
Our Europe segment's capacity increase was caused by the following:
• Cunard 2,960-passenger capacity ship that entered into service
in May 2024
• The return to normal operations for ships impacted by the Red
Sea rerouting in the prior year
For the six months ended May 31, 2025 compared to the six months ended May 31,
2024, we had a 2.8% capacity increase in ALBDs comprised of a 2.9% capacity
increase in our North America segment and a 2.6% capacity increase in our
Europe segment.
Our North America segment's capacity increase was caused by the following:
• Carnival Cruise Line 5,360-passenger capacity ship that entered
into service in December 2023
• Princess Cruises 4,310-passenger capacity ship that entered into
service in February 2024
• Carnival Cruise Line 4,130-passenger capacity ship that was
transferred from Costa Cruises and entered into service in April 2024
Our North America segment's capacity increase was partially offset by:
• Seabourn 460-passenger capacity ship that left the fleet in
September 2024
• P&O Cruises (Australia) 2,000-passenger capacity ship that
left the fleet in February 2025
Our Europe segment's capacity increase was caused by:
• Cunard 2,960-passenger capacity ship that entered into service
in May 2024
• The return to normal operations for ships impacted by the Red
Sea rerouting in the prior year
The increase in our Europe segment's capacity was partially offset by a Costa
Cruises 4,240-passenger capacity ship that transferred to Carnival Cruise Line
in February 2024
(d) Occupancy, in accordance with cruise industry practice, is calculated
using a numerator of PCDs and a denominator of ALBDs, which assumes two
passengers per cabin even though some cabins can accommodate three or more
passengers. Percentages in excess of 100% indicate that on average more than
two passengers occupied some cabins.
Three Months Ended May 31, 2025 ("2025") Compared to Three Months Ended May
31, 2024 ("2024")
Revenues
Consolidated
Passenger ticket revenues made up 65% of our 2025 total revenues. Passenger
ticket revenues increased by $351 million, or 9.3%, to $4.1 billion in 2025
from $3.8 billion in 2024.
This increase was caused by:
• $169 million - higher ticket prices driven by continued strength
in demand
• $115 million - 3.1% capacity increase in ALBDs
• $51 million - net favorable foreign currency translation impact
• $35 million - 0.9 percentage point increase in occupancy
The remaining 35% of 2025 total revenues was comprised of onboard and other
revenues, which increased by $197 million, or 9.7%, to $2.2 billion in 2025
from $2.0 billion in 2024.
This increase was driven by:
• $128 million - higher onboard spending by our guests
• $37 million - 3.1% capacity increase in ALBDs
North America Segment
Passenger ticket revenues made up 61% of our North America segment's 2025
total revenues. Passenger ticket revenues increased by $108 million, or 4.4%,
to $2.6 billion in 2025 from $2.5 billion in 2024.
This increase was caused by:
• $102 million - higher ticket prices driven by continued strength
in demand
• $23 million - 1.0 percentage point increase in occupancy
The remaining 39% of our North America segment's 2025 total revenues were
comprised of onboard and other revenues, which increased by $122 million, or
8.1%, to $1.6 billion in 2025 from $1.5 billion in 2024. This increase was
driven by $103 million of higher onboard spending by our guests.
Europe Segment
Passenger ticket revenues made up 76% of our Europe segment's 2025 total
revenues. Passenger ticket revenues increased by $234 million, or 18%, to
$1.5 billion in 2025 from $1.3 billion in 2024.
This increase was driven by:
• $109 million - 8.4% capacity increase in ALBDs
• $67 million - higher ticket prices driven by continued strength
in demand
• $52 million - net favorable foreign currency translation
The remaining 24% of our Europe segment's 2025 total revenues were comprised
of onboard and other revenues, which increased by $79 million, or 20%, to $474
million in 2025 from $395 million in 2024.
This increase was driven by:
• $33 million - 8.4% capacity increase in ALBDs
• $25 million - higher onboard spending by our guests
Operating Expenses
Consolidated
Operating expenses increased by $89 million, or 2.3%, to $3.9 billion in 2025
from $3.8 billion in 2024.
This increase was caused by:
• $101 million - 3.1% capacity increase in ALBDs
• $72 million - higher repair and maintenance expenses (including
dry-dock expenses)
• $31 million - higher onboard and other cost of sales driven by
higher onboard revenues
• $31 million - net unfavorable foreign currency translation
• $14 million - higher commissions, transportation costs, and
other expenses driven by increased ticket pricing and an increase in the
number of guests
These increases were partially offset by:
• $103 million - gains on the sales of one North America segment
ship and one Europe segment ship
• $40 million - lower fuel prices including the impact of the
European Union allowance cost ("EU allowances")
• $32 million - lower fuel consumption per ALBD
Selling and administrative expenses increased by $26 million, or 3.3%, to $816
million in 2025 from $789 million in 2024.
Depreciation and amortization expenses increased by $59 million, or 9.2%, to
$692 million in 2025 from $634 million in 2024.
North America Segment
Operating expenses were $2.6 billion in 2025 and 2024. The changes in
operating expenses for the North America segment were not material.
Selling and administrative expenses increased by $8 million, or 1.8%, to $473
million in 2025 from $464 million in 2024.
Depreciation and amortization expenses increased by $35 million, or 8.5%, to
$450 million in 2025 from $414 million in 2024.
Europe Segment
Operating expenses increased by $73 million, or 6.5%, to $1.2 billion in 2025
from $1.1 billion in 2024.
This increase was caused by:
• $95 million - 8.4% capacity increase in ALBDs
• $31 million - net unfavorable foreign currency translation
These increases were partially offset by a $57 million gain on sale of one
ship.
Selling and administrative expenses increased by $18 million, or 8.0%, to $248
million in 2025 from $230 million in 2024.
Depreciation and amortization expenses increased by $22 million, or 14%, to
$187 million in 2025 from $164 million in 2024. This increase was driven by
increases in capacity, fleet enhancements and net unfavorable foreign currency
translation.
Operating Income
Our consolidated operating income increased by $374 million to $934 million in
2025 from $560 million in 2024. Our North America segment's operating income
increased by $167 million to $691 million in 2025 from $525 million in 2024,
and our Europe segment's operating income increased by $199 million to $368
million in 2025 from $168 million in 2024. These changes were primarily due to
the reasons discussed above.
Nonoperating Income (Expense)
Interest expense, net of capitalized interest decreased by $109 million, or
24%, to $341 million in 2025 from $450 million in 2024. The decrease was
substantially all due to a decrease in total debt, lower average interest
rates and increased capitalized interest.
Debt extinguishment and modification costs decreased by $29 million to $4
million in 2025 from $33 million in 2024 as a result of debt transactions
occurring during the respective periods.
Six Months Ended May 31, 2025 ("2025") Compared to Six Months Ended May 31,
2024 ("2024")
Revenues
Consolidated
Passenger ticket revenues made up 65% of our 2025 total revenues. Passenger
ticket revenues increased by $566 million, or 7.7%, to $7.9 billion in 2025
from $7.4 billion in 2024.
This increase was caused by:
• $320 million - higher ticket prices driven by continued strength
in demand
• $207 million - 2.8% capacity increase in ALBDs
• $68 million - 0.9 percentage point increase in occupancy
These increases were partially offset by a decrease of $29 million in air
transportation revenue.
The remaining 35% of 2025 total revenues was comprised of onboard and other
revenues, which increased by $386 million, or 10%, to $4.2 billion in 2025
from $3.8 billion in 2024.
This increase was driven by:
• $252 million - higher onboard spending by our guests
• $103 million - 2.8% capacity increase in ALBDs
• $29 million - 0.9 percentage point increase in occupancy
North America Segment
Passenger ticket revenues made up 62% of our North America segment's 2025
total revenues. Passenger ticket revenues increased by $268 million, or 5.6%,
to $5.0 billion in 2025 from $4.7 billion in 2024.
This increase was caused by:
• $148 million - higher ticket prices driven by continued strength
in demand
• $138 million - 2.9% capacity increase in ALBDs
• $30 million - 0.7 percentage point increase in occupancy
These increases were partially offset by a decrease of $31 million in air
transportation revenue.
The remaining 38% of our North America segment's 2025 total revenues were
comprised of onboard and other revenues, which increased by $295 million, or
10%, to $3.1 billion in 2025 from $2.8 billion in 2024.
This increase was driven by:
• $199 million - higher onboard spending by our guests
• $82 million - 2.9% capacity increase in ALBDs
Europe Segment
Passenger ticket revenues made up 77% of our Europe segment's 2025 total
revenues. Passenger ticket revenues increased by $286 million, or 11%, to
$3.0 billion in 2025 from $2.7 billion in 2024.
This increase was driven by:
• $173 million - higher ticket prices driven by continued strength
in demand
• $69 million - 2.6% capacity increase in ALBDs
• $38 million - 1.4 percentage point increase in occupancy
The remaining 23% of our Europe segment's 2025 total revenues were comprised
of onboard and other revenues, which increased by $88 million, or 11%, to $887
million in 2025 from $799 million in 2024.
This increase was driven by:
• $52 million - higher onboard spending by our guests
• $21 million - 2.6% capacity increase in ALBDs
Operating Expenses
Consolidated
Operating expenses increased by $150 million, or 2.0%, to $7.7 billion in
2025 from $7.5 billion in 2024.
This increase was caused by:
• $206 million - 2.8% capacity increase in ALBDs
• $63 million - higher onboard and other cost of sales driven by
higher onboard revenues
• $50 million - higher repair and maintenance expenses (including
dry-dock expenses)
• $44 million - higher commissions, transportation costs, and
other expenses driven by increased ticket pricing and an increase in the
number of guests
These increases were partially offset by:
• $103 million - gains on the sales of one North America segment
ship and one Europe segment ship
• $68 million - lower fuel prices including the impact of the cost
of EU allowances
• $58 million - lower fuel consumption per ALBD
Selling and administrative expenses increased by $61 million, or 3.8%, to
$1.7 billion in 2025 from $1.6 billion in 2024.
Depreciation and amortization expenses increased by $100 million, or 8.0%, to
$1.3 billion in 2025 from $1.2 billion in 2024.
North America Segment
Operating expenses increased by $54 million, or 1.1%, and were $5.0 billion
in 2025 and 2024.
This increase was caused by:
• $145 million - 2.9% capacity increase in ALBDs
• $40 million - higher onboard and other cost of sales driven by
higher onboard revenues
These increases were partially offset by:
• $56 million - lower fuel prices including the impact of the cost
of EU allowances
• $46 million - gain on sale of one ship
• $42 million - lower fuel consumption per ALBD
Selling and administrative expenses increased by $27 million, or 2.8%, to $993
million in 2025 from $966 million in 2024.
Depreciation and amortization expenses increased by $71 million, or 8.7%, to
$884 million in 2025 from $813 million in 2024.
Europe Segment
Operating expenses increased by $92 million, or 3.9%, to $2.5 billion in 2025
from $2.4 billion in 2024.
This increase was caused by:
• $62 million - 2.6% capacity increase in ALBDs
• $35 million - higher repair and maintenance expenses (including
dry-dock expenses)
• $25 million - higher commissions, transportation costs, and
other expenses driven by increased ticket pricing and an increase in the
number of guests
• $23 million - higher onboard and other cost of sales driven by
higher onboard revenues
These increases were partially offset by a $57 million gain on sale of one
ship.
Selling and administrative expenses increased by $34 million, or 7.4%, to $499
million in 2025 from $464 million in 2024.
Depreciation and amortization expenses increased by $27 million, or 8.4%, to
$356 million in 2025 from $328 million in 2024.
Operating Income
Our consolidated operating income increased by $641 million to $1.5 billion in
2025 from $0.8 billion in 2024. Our North America segment's operating income
increased by $410 million to $1.2 billion in 2025 from $0.8 billion in 2024,
and our Europe segment's operating income increased by $220 million to $508
million in 2025 from $288 million in 2024. These changes were primarily due to
the reasons discussed above.
Nonoperating Income (Expense)
Interest expense, net of capitalized interest decreased by $203 million, or
22%, to $718 million in 2025 from $921 million in 2024. The decrease was
substantially all due to a decrease in total debt, lower average interest
rates and increased capitalized interest.
Debt extinguishment and modification costs increased by $190 million to $255
million in 2025 from $66 million in 2024 as a result of debt transactions
occurring during the respective periods.
Liquidity, Financial Condition and Capital Resources
As of May 31, 2025, we had $5.2 billion of liquidity including $2.1 billion
of cash and cash equivalents and $3.0 billion of borrowings available under
the Revolving Facility. In June 2025, Carnival Corporation and Carnival plc
entered into a $4.5 billion New Revolving Facility, which replaced the
Revolving Facility. The New Revolving Facility matures in June 2030 and
contains an accordion feature, allowing for up to $1.0 billion of additional
revolving commitments. In addition, we had $8.4 billion of undrawn export
credit facilities to fund ship deliveries planned through 2033. We will
continue to pursue various opportunities to repay portions of our existing
indebtedness and refinance future debt maturities to extend maturity dates and
reduce interest expense. Refer to Note 3 - "Debt" of the consolidated
financial statements and Funding Sources below for additional details.
We had a working capital deficit of $8.6 billion as of May 31, 2025 compared
to a working capital deficit of $8.2 billion as of November 30, 2024. The
increase in working capital deficit was driven by an increase in customer
deposits, partially offset by an increase in cash and cash equivalents as well
as decreases in accrued liabilities and other and the current portion of
long-term debt. We operate with a substantial working capital deficit. This
deficit is mainly attributable to the fact that, under our business model,
substantially all of our passenger ticket receipts are collected in advance of
the applicable sailing date. These advance passenger receipts generally remain
a current liability on our balance sheet until the sailing date. The cash
generated from these advance receipts is used interchangeably with cash on
hand from other sources, such as our borrowings and other cash from
operations. The cash received as advanced receipts can be used to fund
operating expenses, pay down our debt, make long-term investments or any other
use of cash. Included within our working capital are $8.1 billion and
$6.4 billion of current customer deposits as of May 31, 2025 and November 30,
2024. We have agreements with a number of credit card processors that transact
customer deposits related to our cruise vacations. Certain of these agreements
allow the credit card processors to request, under certain circumstances, that
we provide a capped reserve fund in cash. In addition, we have a relatively
low level of accounts receivable and limited investment in inventories.
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.
Sources and Uses of Cash
Operating Activities
Our business provided $3.3 billion of net cash flows from operating activities
during the six months ended May 31, 2025, a decrease of $0.5 billion, compared
to $3.8 billion provided for the same period in 2024. This was caused by the
nonrecurrence of cash provided by the release of $0.8 billion in credit card
reserves in 2024 (included in the change in prepaid expenses and other
assets).
Investing Activities
During the six months ended May 31, 2025, net cash used in investing
activities was $1.2 billion. This was driven by:
• Capital expenditures of $1.5 billion primarily attributable to
ship improvements and developments in our port destinations and exclusive
islands
• Proceeds of $312 million substantially all from the sales of one
North America segment ship and one Europe segment ship
During the six months ended May 31, 2024, net cash used in investing
activities was $3.4 billion. This was caused by capital expenditures of
$3.5 billion primarily attributable to the delivery of two North America
segment ships and one Europe segment ship.
Financing Activities
During the six months ended May 31, 2025, net cash used in financing
activities of $1.2 billion was caused by:
• Repayments of $5.1 billion of long-term debt
• Debt issuance costs of $41 million
• Debt extinguishment costs of $197 million
• Issuances of $4.1 billion of long-term debt
During the six months ended May 31, 2024, net cash used in financing
activities of $1.2 billion was caused by:
• Repayments of $4.1 billion of long-term debt
• Debt issuance costs of $117 million
• Debt extinguishment costs of $41 million
• Issuances of $3.0 billion of long-term debt
Funding Sources
We plan to use existing liquidity and future cash flows from operations to
fund our cash requirements including capital expenditures not funded by our
export credit facilities. We seek to manage our credit risk exposures,
including counterparty nonperformance associated with our cash and cash
equivalents, and future financing facilities by conducting business with
well-established financial institutions, and export credit agencies and
diversifying our counterparties.
(in billions) 2025 2026 2027 2028 2029 Thereafter
Future export credit facilities at May 31, 2025 $0.8 $- $1.3 $1.3 $1.7 $3.4
Our export credit facilities contain various financial covenants as described
in Note 3 - "Debt". At May 31, 2025, we were in compliance with the
applicable covenants under our debt agreements.
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 "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" within our Form 10-K. There
have been no material changes to our exposure to market risks since the date
of our 2024 Form 10-K.
Interest Rate Risks
The composition of our debt, after the effect of interest rate swaps, was as
follows:
May 31, 2025
Fixed rate 58%
EUR fixed rate 24%
Floating rate 7%
EUR floating rate 11%
Item 4. Controls and 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 Chief Executive Officer and our Chief Financial Officer and Chief
Accounting Officer have evaluated our disclosure controls and procedures and
have concluded, as of May 31, 2025, that they are effective to provide a
reasonable level of assurance, as described above.
B. Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting
during the quarter ended May 31, 2025 that have materially affected or are
reasonably likely to materially affect our internal control over financial
reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
To the extent disclosure is required by Part II. Item 1 of Form 10-Q, the
legal proceedings described in Note 4 - "Contingencies and Commitments" of our
consolidated financial statements, including those described under "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.
Item 1A. Risk Factors.
The risk factors that affect our business and financial results are discussed
in "Item 1A. Risk Factors," included in the Form 10-K, and there has been no
material change to these risk factors since the Form 10-K filing. These risks
should be carefully considered, and 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.
Item 5. Other Information.
Trading Plans
During the quarter ended May 31, 2025, no director or Section 16 officer
adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1
trading arrangements (in each case, as defined in Item 408(a) of Regulation
S-K).
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