Carnival Corporation & plc, 2020 Annual Report on Form 10-K
Summary
Carnival Corporation and Carnival plc file this joint Form 10-K for the fiscal year ended November 30, 2020. Their income statement shows a net loss of $10,236 million for 2020 against net income of $2,990 million in 2019, and a loss of $13.20 per share against earnings of $4.34. The filing says the companies paused guest cruise operations in mid-March 2020 and began a limited resumption in September, and that they expect a net loss on both a U.S. GAAP and adjusted basis for 2021. At January 14, 2021 Carnival Corporation had 932,485,510 shares of common stock outstanding and Carnival plc had 183,830,161 ordinary shares outstanding. The cover reports non-affiliate equity of $7.1 billion and $2.0 billion for the two registrants as of the end of the second fiscal quarter.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
(checked
☑ box)
ANNUALANNUAL REPORT
REPORT PURSUANTO
PURSUANT TOSECTION
SECTION 13
13 OR
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OFTHE
THESECURITIES
SECURITIESEXCHANGE ACT OF
EXCHANGE ACT1934
OF
1934
For the fiscal year ended November 30, 2020 or
☐
(unchecked box) TRANSITION REPORT
TRANSITION REPORT PURSUANT TO SECTION
PURSUANT TO 13 OR 15(d)13
SECTION OFOR
THE15(d)
SECURITIES EXCHANGE
OF THE ACT OF 1934
SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ______________ to ________________
Commission file number: 001-9610 Commission file number: 001-15136
Carnival Corporation Carnival plc
(Exact name of registrant as (Exact name of registrant as
specified in its charter) specified in its charter)
Republic of Panama England and Wales
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
59-1562976 98-0357772
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
3655 N.W. 87th Avenue Carnival House, 100 Harbour Parade,
Miami, Florida 33178-2428 Southampton SO15 1ST, United Kingdom
(Address of principal (Address of principal
executive offices executive offices
and zip code) and zip code)
(305) 599-2600 011 44 23 8065 5000
(Registrant’s telephone number, (Registrant’s telephone number,
including area code) including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock ($0.01 par value) CCL New York Stock Exchange, Inc.
Ordinary Shares each represented by American
Depositary Shares ($1.66 par value), Special Voting
Share, GBP 1.00 par value and Trust Shares of CUK New York Stock Exchange, Inc.
beneficial interest in the P&O Princess Special Voting
Trust
1.625% Senior Notes due 2021 CCL21 New York Stock Exchange LLC
1.875% Senior Notes due 2022 CUK22 New York Stock Exchange LLC
1.000% Senior Notes due 2029 CUK29 New York Stock Exchange LLC
Securities registered pursuant to Section 12(g) of the Act: None
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The aggregate market value of the voting and non-voting common The aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at equity held by non-affiliates computed by reference to the price at
which the common equity was last sold was $7.1 billion as of the which the common equity was last sold was $2.0 billion as of the
last business day of the registrant’s most recently completed second last business day of the registrant’s most recently completed second
fiscal quarter. fiscal quarter.
At January 14, 2021, Carnival Corporation had outstanding At January 14, 2021, Carnival plc had outstanding 183,830,161
932,485,510 shares of its Common Stock, $0.01 par value. Ordinary Shares $1.66 par value, one Special Voting Share GBP
1.00 par value and 932,485,510 Trust Shares of beneficial interest in
the P&O Princess Special Voting Trust.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 2020 Annual Report and 2021 joint definitive Proxy Statement are incorporated by reference into Part II and Part III of this
report.
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CARNIVAL CORPORATION & PLC
FORM 10-K
FOR THE FISCAL YEAR ENDED NOVEMBER 30, 2020
TABLE OF CONTENTS
PART I
Item 1. Business............................................................................................................................................................ 4
A. Overview............................................................................................................................................. 4
I. Summary...................................................................................................................................... 4
II. Recent Developments................................................................................................................. 4
III. Vision, Goals and Related Strategies........................................................................................ 6
B. Global Cruise Industry.......................................................................................................................... 7
I. Overview...................................................................................................................................... 7
II. Passenger Capacity and Cruise Guests Carried by Ocean Going Vessels.................................. 7
C. Our Global Cruise Business.................................................................................................................. 8
I. Segment Information.................................................................................................................... 8
II. Ships Under Contract for Construction...................................................................................... 9
III. Cruise Brands............................................................................................................................ 10
IV. Principal Source Geographic Areas.......................................................................................... 12
V. Cruise Programs......................................................................................................................... 13
VI. Cruise Pricing and Payment Terms........................................................................................... 14
VII. Seasonality............................................................................................................................... 15
VIII. Onboard and Other Revenues ................................................................................................ 15
IX. Marketing Activities ................................................................................................................. 15
X. Sales Relationships .................................................................................................................... 15
XI. Ethics and Compliance.............................................................................................................. 16
XII. Sustainability ........................................................................................................................... 16
XIII. Human Capital Management and Employees......................................................................... 17
XIV. Supply Chain.......................................................................................................................... 18
XV. Insurance ................................................................................................................................. 18
XVI. Governmental Regulations..................................................................................................... 19
XVII. Taxation................................................................................................................................ 25
XVIII. Trademarks and Other Intellectual Property........................................................................ 27
XIX. Competition............................................................................................................................ 27
D. Website Access to Carnival Corporation & plc SEC Reports................................................................ 27
E. Industry and Market Data........................................................................................................................ 27
Item 1A. Risk Factors...................................................................................................................................................... 28
Item 1B. Unresolved Staff Comments............................................................................................................................. 36
Item 2. Properties.......................................................................................................................................................... 36
Item 3. Legal Proceedings............................................................................................................................................. 37
Item 4. Mine Safety Disclosures................................................................................................................................... 37
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PART II
Item 5. Market for Registrants’ Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities.......................................................................................................................................................... 37
Item 6. Selected Financial Data.................................................................................................................................... 38
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations........................... 38
Item 7A. Quantitative and Qualitative Disclosures About Market Risk......................................................................... 38
Item 8. Financial Statements and Supplementary Data................................................................................................ 38
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.......................... 38
Item 9A. Controls and Procedures................................................................................................................................... 38
Item 9B. Other Information............................................................................................................................................. 39
PART III
Item 10. Directors, Executive Officers and Corporate Governance............................................................................... 39
Item 11. Executive Compensation.................................................................................................................................. 40
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters........ 40
Item 13. Certain Relationships and Related Transactions, and Director Independence................................................. 41
Item 14. Principal Accountant Fees and Services........................................................................................................... 41
PART IV
Item 15. Exhibits and Financial Statement Schedules.................................................................................................... 41
Item 16. Form 10-K Summary........................................................................................................................................ 50
2
DOCUMENTS INCORPORATED BY REFERENCE
The information described below and contained in the Registrants’ 2020 Annual Report to shareholders to be furnished to the
U.S. Securities and Exchange Commission pursuant to Rule 14a-3(b) of the Securities Exchange Act of 1934 is shown in
Exhibit 13 and is incorporated by reference into this joint 2020 Annual Report on Form 10-K (“Form 10-K”).
Part and Item of the Form 10-K
Part II
Item 5. Market for Registrants’ Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities -
Market Information, Holders and Performance Graph.
Item 6. Selected Financial Data.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Item 8. Financial Statements and Supplementary Data.
Portions of the Registrants’ 2021 joint definitive Proxy Statement, to be filed with the U.S. Securities and Exchange
Commission, are incorporated by reference into this Form 10-K under the items described below.
Part and Item of the Form 10-K
Part III
Item 10. Directors, Executive Officers and Corporate Governance.
Item 11. Executive Compensation.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Item 14. Principal Accountant Fees and Services.
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PART I
Item 1. Business.
A. Overview
I. Summary
Carnival Corporation was incorporated in Panama in 1974 and Carnival plc was incorporated in England and Wales in 2000.
Carnival Corporation and Carnival plc operate a dual listed company (“DLC”), whereby the businesses of Carnival Corporation
and Carnival plc are combined through a number of contracts and through provisions in Carnival Corporation’s Articles of
Incorporation and By-Laws and Carnival plc’s Articles of Association. The two companies operate as if they are a single
economic enterprise with a single senior executive management team and identical Boards of Directors, but each has retained
its separate legal identity. Carnival Corporation and Carnival plc are both public companies with separate stock exchange
listings and their own shareholders. Together with their consolidated subsidiaries, Carnival Corporation and Carnival plc are
referred to collectively in this Form 10-K as “Carnival Corporation & plc,” “our,” “us” and “we.” We are one of the world’s
largest leisure travel companies with operations in North America, Australia, Europe and Asia.
II. Recent Developments
In the face of the global impact of COVID-19, we paused our guest cruise operations in mid-March. In response to this
unprecedented situation, we acted to protect the health and safety of guests and shipboard team members, optimize the pause in
guest operations and increase our liquidity position. In September, we began the resumption of limited guest operations as part
of our phased-in return to service. As of January 14, 2021, none of our ships were operating with guests onboard. We anticipate
a gradual return to service over time. As we have never previously experienced a complete cessation of our guest cruise
operations, we cannot predict the timing of our complete return to service and when various ports will reopen to our ships.
Protecting the Health and Safety of Guests and Team Members
Early in the pause period, we returned over 260,000 guests to their homes, coordinating with a large number of countries
around the globe. We chartered aircraft, utilized commercial flights and even used our ships to sail home guests who could not
fly. We also worked around the clock with various local governmental authorities to repatriate our shipboard team members as
quickly as possible, using our ships and chartering hundreds of planes. We focused on the physical and mental health of our
shipboard team members who experienced extended stays onboard during our repatriation efforts. Wherever possible, we
provided shipboard team members with single occupancy cabin accommodations, many with a window or balcony. Shipboard
team members also had access to fresh air and other areas of the ship, movies and internet, and available counseling. We were
able to successfully repatriate our shipboard team members to more than 130 countries around the globe, other than the safe
manning team members who remained on the ships.
We also implemented significant changes in the way we work, pivoting our shoreside operations to allow for remote working,
where possible, in order to facilitate physical distancing protocols. We believe these measures are critical to helping keep our
employees, their families and the communities in which we work safe and healthy.
Optimizing the Pause in Guest Operations
While our highest responsibility and top priorities remain focused on maintaining compliance everywhere we operate,
protecting the environment and the health, safety and well-being of our guests, the people in the communities we touch and
serve, and our shipboard and shoreside employees, we significantly reduced operating expenses by transitioning ships into
pause status, reducing marketing and selling expenses, implementing a combination of layoffs, furloughs, reduced work weeks
and salary and benefit reductions across the company, including senior management, instituting a hiring freeze across the
organization and significantly reducing consultant and contractor roles. In addition, we reduced non-newbuild capital
expenditures.
Optimizing the Future Fleet
We expect future capacity to be moderated by the phased re-entry of our ships, the removal of capacity from our fleet and
delays in new ship deliveries. Since the pause in guest operations, we have accelerated the removal of ships in 2020 which were
previously expected to be sold over the ensuing years. We now expect to dispose of 19 ships, 15 of which have already left the
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fleet as of January 14, 2021. In total, the 19 ships represent approximately 13 percent of pre-pause capacity and only three
percent of operating income in 2019. The sale of less efficient ships is expected to result in future operating expense efficiencies
of approximately two percent per available lower berth day ("ALBD") and a reduction in fuel consumption of approximately
one percent per ALBD.
Since the pause in guest cruise operations began and through November 30, 2020, we have taken delivery of only two
(Enchanted Princess and Iona) of the four ships originally scheduled for delivery in fiscal 2020. Subsequent to November 30,
2020 and through January 14, 2021, we took delivery of two additional ships (Mardi Gras and Costa Firenze). We expect only
one more ship to be delivered in fiscal 2021 compared to five ships that were originally scheduled for delivery in fiscal 2021.
Based on the actions taken to date and the scheduled newbuild deliveries through 2022, our fleet is expected to only experience
a 1.9 percent compounded annual average capacity growth rate through 2022, be more cost efficient with a roughly 14 percent
larger average berth size per ship and an average age of 12 years in 2022 versus 13 years, in each of these cases as compared to
2019.
Liquidity
We have taken, and continue to take, significant actions to preserve cash and obtain additional capital to increase our liquidity.
Since March 2020 we have raised $19 billion through a series of transactions.
Refer to "Liquidity, Financial Condition and Capital Resources", Note 1 - “Liquidity and Management’s Plans” and “Critical
Accounting Estimates, Liquidity and COVID-19” for additional discussion regarding our liquidity.
Resumption of Guest Operations
We resumed limited guest operations in September 2020, with Costa Cruises ("Costa") and then with AIDA Cruises ("AIDA")
in October 2020. The initial cruises will continue to take place with adjusted passenger capacity and enhanced health protocols
developed with government and health authorities, and guidance from our roster of medical and scientific experts. As of
January 14, 2021, none of our ships were operating with guests onboard. These and other brands and ships are expected to
return to service over time, as part of our goal to provide guests with unmatched joyful vacations in a manner consistent with
our vision regarding our highest priorities, which are compliance, environmental protection and the health, safety and well-
being of our guests, crew, shoreside employees and the people in the communities our ships visit.
Health and Safety Protocols
As the understanding of COVID-19 continues to evolve, we have been working with a number of world-leading public health,
epidemiological and policy experts to support our ongoing efforts with enhanced protocols and procedures for the return of
cruise vacations. These advisors will continue to provide guidance based on the latest scientific evidence and best practices for
protection and mitigation, as well as regulatory requirements.
Working with governments, national health authorities and medical experts, Costa and AIDA have a comprehensive set of
health and hygiene protocols that has helped facilitate a safe and healthy return to cruise vacations. These enhanced protocols
are modeled after shoreside health and mitigation guidelines as provided by each brand's respective country, and approved by
all relevant regulatory authorities of the flag state, Italy. Protocols will be updated based on evolving scientific and medical
knowledge related to mitigation strategies. Costa is the first cruise company to earn the Biosafety Trust Certification from
Registro Italiano Navale ("RINA"). The certification process examined all aspects of life onboard and ashore and assessed the
compliance of the system with procedures aimed at the prevention and control of infections.
We are also working directly with the Centers for Disease Control and Prevention (“CDC”) on the development of protocols
necessary to resume cruising from the United States. We, in conjunction with our advisors, are currently evaluating the
requirements set forth in the CDC’s Framework for Conditional Sailing Order effective as of October 30, 2020. The current
framework consists of several initial requirements that cruise ship operators will need to follow prior to resuming guest
operations. Further, the current framework is subject to additional technical instructions and orders from the CDC and may
change based on public health considerations. While the current framework represents an important step in our return to service,
many uncertainties remain.
The requirements outlined in the CDC’s current framework include:
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• Establishment of laboratory testing of crew and guests onboard cruise ships in U.S. waters and upon embarkation and
disembarkation
• Simulated voyages designed to test a cruise ship operators’ ability to mitigate COVID-19 on cruise ships
• Meeting and maintaining requirements for a Conditional Sailing Certificate, which include, among other things:
◦ implementing the required testing protocols,
◦ a prohibition on offering itineraries longer than seven days and
◦ the demonstration, at each port where a ship intends to dock, of approval with U.S. port and local health
authorities, which requires:
▪ medical care agreements addressing evacuation to onshore hospitals,
▪ housing agreements with onshore facilities for isolation and quarantine of COVID-19 cases and
▪ port agreements to limit the number of cruise ships at any single port
• A return to passenger voyages in a manner that mitigates the risk of COVID-19 introduction, transmission, or spread
among passengers and crew onboard ships and ashore to communities
Our plans to resume U.S. operations will be designed to comply with the numerous requirements in the CDC’s framework. We
continue to work closely with governments and health authorities in other parts of the world to ensure that our health and safety
protocols will also comply with the requirements of each location. Implementing these initial and subsequent requirements may
result in an increase in cost and take time before the continued resumption of our guest operations.
III. Vision, Goals and Related Strategies
At Carnival Corporation & plc, our highest responsibility and top priorities are to be in compliance everywhere we operate in
the world, to protect the environment and the health, safety and well-being of our guests, the people in the communities we
touch and serve and our shipboard and shoreside employees. On this foundation, we aspire to deliver unmatched joyful
vacations for our guests, always exceeding their expectations and in doing so driving outstanding shareholder value. We are
committed to a positive and just corporate culture, based on inclusion and the power of diversity. We operate with integrity,
trust and respect for each other -- communicating, coordinating and collaborating while seeking candor, openness and
transparency at all times. And we aspire to be an exemplary corporate citizen leaving the people and the places we touch even
better.
We believe our portfolio of brands is instrumental to achieving our vision. Paramount to the success of our business is our
commitment to health, environment, safety, security (“HESS”) and sustainability. We are committed to enhancing a culture of
compliance and integrity that adheres to applicable legal and statutory requirements and the highest ethical principles. Our
vision is based on four key pillars:
• Health, environment, safety, security and sustainability
• Guests
• Employees
• Shareholders and other stakeholders
Health, Environment, Safety, Security and Sustainability
We are committed to operating a safe and reliable fleet and to protect the environment and the health, safety and well-being of
our guests, the people in the communities we touch and our shipboard and shoreside employees. We are dedicated to fully
complying with, or exceeding, all legal and statutory requirements applicable to us related to health, environment, safety,
security and sustainability throughout our business.
Guests
Our goal is to consistently exceed our guests’ expectations while providing them with a wide variety of safe and exceptional
vacation experiences. We believe that we can achieve this goal by continually focusing our efforts on helping our guests choose
the cruise brand that will best meet their unique needs and desires, improving their overall vacation experiences and building
state-of-the-art ships with innovative onboard offerings and providing unequaled service to our guests.
Employees
Our goal is to foster a positive and just corporate culture, based on inclusion and the power of diversity that supports the
recruitment, development and retention of the finest employees. A team of highly motivated and engaged employees is key to
delivering vacation experiences that exceed our guests’ expectations. Understanding the critical skills that are needed for
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outstanding performance is crucial in order to hire and train our officers, crew and shoreside personnel. We believe in building
trust based relationships and listening to and acting upon our employees’ perspectives and ideas and use employee feedback
tools to monitor and improve our progress in this area. We are a diverse organization and value and support our talented and
diverse employee base. We are committed to employing people from around the world and hiring them based on the quality of
their experience, skills, education and character, without regard for their identification with any group or classification of
people.
Shareholders and Other Stakeholders
We value the relationships we have with our shareholders and other stakeholders, including travel agents, trade associations,
communities, regulatory bodies, media, creditors, insurers, shipbuilders, governments and suppliers. Strong relationships with
our travel agent partners are especially vital to our success. We believe that engaging stakeholders in a mutually beneficial
manner is critical to our long-term success. As part of this effort, we believe we must continue to be an outstanding corporate
citizen in the communities in which we operate. Our brands work to meet or exceed their economic, environmental, ethical and
legal responsibilities.
B. Global Cruise Industry
I. Overview
In the face of the global impact of COVID-19, the global cruise industry paused guest cruise operations. While certain cruise
lines have begun the resumption of limited guest operations, initially focusing on shorter cruise durations within select
geographic areas and with a focus on local and regional itineraries, we anticipate a gradual return to service over time.
We believe cruising offers a broad range of products and services to suit vacationing guests of many ages, backgrounds and
interests. Each brand in our portfolio meets the needs of a unique set of consumer psychographics and vacation needs which
allows us to penetrate large addressable customer segments. The mobility of cruise ships enables us to move our vessels
between regions in order to meet changing demand across different geographic areas.
Cruise brands can be broadly classified as offering contemporary, premium and luxury cruise experiences. The contemporary
experience has a more casual ambiance and historically includes cruises that last seven days or less. The premium experience
emphasizes quality, comfort, style and more destination-focused itineraries and appeals to those who are more affluent.
Historically, the premium experience includes cruises that last from seven to 14 days. The luxury experience is usually
characterized by very high standards of accommodation and service, smaller vessel size and exotic itineraries to ports that are
inaccessible by larger ships. We have product and service offerings in each of these three broad classifications.
II. Passenger Capacity and Cruise Guests Carried by Ocean Going Vessels (table is in thousands)
Year
(in thousands) Average Passenger Capacity (a) Cruise Guests Carried
Global Carnival Global Carnival
Year Cruise Industry (b) Corporation & plc Cruise Industry (c) Corporation & plc
2018 520 230 28,500 12,400
2019 550 240 30,100 12,900
Due to the impact of COVID-19 on the global cruise industry in 2020, current year data is not meaningful and is not included in
the table.
(a) In accordance with cruise industry practice, passenger capacity is calculated based on the assumption of two passengers
per cabin even though some cabins can accommodate three or more passengers.
(b) Amounts were based on internal estimates using public industry data.
(c) The global cruise guests carried for 2018 and 2019 were obtained from G.P. Wild, an independent cruise research
company.
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C. Our Global Cruise Business
I. Segment Information
Ships expected to return to service as of November 30,
2020 (a)
Passenger Percentage of Number of
Capacity Total Capacity Cruise Ships
North America and Australia ("NAA") Segment
Carnival Cruise Line 66,440 29 % 23
Princess Cruises 42,610 18 14
Holland America Line 18,820 9 9
P&O Cruises (Australia) 7,230 3 3
Seabourn 2,570 1 5
137,670 60 54
Europe and Asia (“EA”) Segment
Costa Cruises ("Costa") 34,980 15 11
AIDA Cruises ("AIDA") 31,930 14 14
P&O Cruises (UK) 19,020 8 6
Cunard 6,830 3 3
92,760 40 34
230,430 100 % 88
(a) Excludes one ship that left the fleet after November 30, 2020 and four additional ships that are expected to leave the
fleet through May 2021.
We also have a Cruise Support segment that includes our portfolio of leading port destinations and other services, all of which
are operated for the benefit of our cruise brands.
In addition to our cruise operations, we own Holland America Princess Alaska Tours, the leading tour company in Alaska and
the Canadian Yukon, which complements our Alaska cruise operations. Our tour company owns and operates hotels, lodges,
glass-domed railcars and motorcoaches which comprise our Tour and Other segment.
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II. Ships Under Contract for Construction
As of November 30, 2020, we have a total of 14 cruise ships expected to be delivered through 2025. Our ship construction
contracts are with Fincantieri and MARIOTTI in Italy, Meyer Werft in Germany and Meyer Turku in Finland.
Passenger
Expected Capacity
Delivery Date Lower Berth
Carnival Cruise Line
Mardi Gras December 2020 5,250
Carnival Celebration November 2022 5,250
Princess Cruises
Discovery Princess January 2022 3,660
Newbuild (see(a)
Newbuild footnote (a) ) November 2023 4,280
Newbuild (see footnote
Newbuild (a) (a) ) May 2025 4,280
Holland America Line
Rotterdam July 2021 2,660
Seabourn
Seabourn Venture December 2021 260
Newbuild October 2022 260
Costa
Costa Firenze December 2020 4,240
Costa Toscana December 2021 5,330
AIDA
AIDAcosma December 2021 5,440
Newbuild October 2023 5,440
P&O Cruises (UK)
Newbuild December 2022 5,190
Cunard
Newbuild December 2023 3,000
Footnote (a):
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9
III. Cruise Brands
Carnival Cruise Line is “The World’s Most Popular Cruise Line®” and provides multi-generational family entertainment at
exceptional value to its guests. It is a place where guests can be their most playful selves and choose their fun. Carnival Cruise
Line ships are designed to inspire the experience of bringing people together, with limitless opportunities for guests to create
their own fun.
For over 50 years, Princess has sailed the world bringing people closer together – by connecting guests to their loved ones,
exciting cultures and new friends. The endless choices are enhanced by Princess MedallionClass experiences, which are
enabled by a revolutionary wearable that supports a seamless, effortless, and personalized vacation, and are combined with our
global destination expertise delivered through programs such as “North to Alaska”.
For more than 145 years, Holland America Line has delivered a distinctively classic, European style of cruising throughout its
fleet of mid-sized premium ships. Guests of all ages enjoy immersive travel through engaging experiences onboard and in-depth
cultural experiences as part of their exploration of fascinating destinations around the world. Holland America Line believes
travel has the power to change the world and has defined their higher purpose to help make the world a better place through
opening minds, building connections and inspiring shared humanity.
For almost 90 years, P&O Cruises (Australia) has taken Australians & New Zealanders on dream holidays to the South Pacific
filled with amazing entertainment, world-class dining, idyllic destinations and unforgettable onboard experiences. With P&O
Cruises (Australia) you can choose to do everything, or nothing at all.
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Seabourn’s ultra-luxury resorts at sea represent the most advanced evolution of intimate, small-ship cruising with all ocean-
front suites, beautifully designed spaces and exceptionally refined amenities. The official cruise line partner of UNESCO World
Heritage, Seabourn offers discerning travelers immersive destination experiences on all seven continents. A variety of
prestigious partnerships enhance the ships’ award-winning cuisine, world-class spa & wellness and other onboard enrichments,
and our staffs’ unique style of sincere, heartfelt hospitality adds unforgettable Seabourn Moments to every voyage.
Costa delivers Italy’s finest at sea primarily serving guests from Continental Europe and Asia. Costa brings a modern Italian
lifestyle to its ships and provides guests with a true European experience that embodies a uniquely Italian passion for life
through warm hospitality, entertainment and gastronomy that makes Costa different from any other cruise experience.
AIDA is the leading and most recognized brand in the German cruise market. Its guests enjoy the German inspired active,
premium modern lifestyle cruise experience. AIDA provides a cruising wellness holiday in modern comfort where guests feel at
home and enjoy consistently excellent service accompanied by the AIDA smile.
P&O Cruises (UK) is Britain’s favorite cruise line, welcoming guests to extraordinary travel experiences designed in a
distinctively British way - through a blend of discovery, relaxation and exceptional service catered towards British tastes. P&O
Cruises (UK)’s fleet of premium ships deliver authentic travel experiences around the globe, combining style, quality and
innovation with a sense of occasion and attention to detail, to create a truly memorable holiday.
Over its 180 year history, the iconic Cunard fleet has perfected the timeless art of luxury ocean travel. While onboard, Cunard
guests experience unique signature moments, from Cunard’s white gloved afternoon tea service to spectacular gala evening
balls to its renowned Insights Speaker program. Guest expectations are exceeded through Cunard’s exemplary White Star
Service®, a legacy from the White Star Line. From the moment a guest steps onboard, every detail of their cruise is curated to
ensure an enjoyable, memorable and luxurious experience.
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(table is in thousands)
IV. Principal Source Geographic Areas
Carnival Corporation & plc
Cruise Guests Carried
(in thousands) 2019 2018 Brands Mainly Serving
Carnival Cruise Line, Princess Cruises, Holland
United States and Canada 7,170 6,790 America Line, Seabourn and Cunard
Continental Europe 2,590 2,340 Costa and AIDA
Asia 1,110 1,140 Princess Cruises and Costa
Carnival Cruise Line, Princess Cruises and
Australia and New Zealand 920 1,020 P&O Cruises (Australia)
United Kingdom 780 810 P&O Cruises (UK) and Cunard
Other 300 310
Total 12,870 12,410
Due to the impact of COVID-19 on the global cruise industry in 2020, current year data is not meaningful and is not included in
the table.
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V. Cruise Programs
Carnival Corporation & plc
Percentage of Passenger
Capacity by Itinerary
2019 2018
Caribbean 32 % 33 %
Europe without Mediterranean 14 14
Mediterranean 13 13
Australia and New Zealand 7 8
Alaska 6 6
China 4 5
Other 25 23
100 % 100 %
Due to the impact of COVID-19 on the global cruise industry in 2020, current year passenger capacity data by itinerary is not
meaningful and is not included in the table.
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VI. Cruise Pricing and Payment Terms
Each of our cruise brands publishes prices for the upcoming seasons primarily through the internet, although published
materials such as direct mailings are also used. Our brands have multiple pricing levels that vary by source market, category of
guest accommodation, ship, season, duration and itinerary. Cruise prices frequently change in a dynamic pricing environment
and are impacted by a number of factors, including the number of available cabins for sale in the marketplace and the level of
guest demand. Some cruise prices are increased due to higher demand. We offer a variety of special promotions, including early
booking, past guest recognition and travel agent programs.
Our bookings are generally taken several months in advance of the cruise departure date. Historically, the longer the cruise
itinerary the further in advance the bookings are made. This lead time allows us to manage our prices in relation to demand for
available cabins through the use of advanced revenue management capabilities and other initiatives.
The cruise ticket price typically includes the following:
• Accommodations
• Most meals, including snacks at numerous venues
• Access to amenities such as swimming pools, water slides, water parks, whirlpools, a health club, and sun decks
• Child care and supervised youth programs
• Entertainment, such as theatrical and comedy shows, live music and nightclubs
• Visits to multiple destinations
We offer value added packages to induce ticket sales to guests and groups and to encourage advance purchase of certain
onboard items. These packages are bundled with cruise tickets and sold to guests for a single price rather than as a separate
package and may include one or more of the following:
• Beverage packages • Internet packages
• Shore excursions • Photo packages
• Air packages • Onboard spending credits
• Specialty restaurants • Gratuities
Our brands’ payment terms generally require that a guest pay a deposit to confirm their reservation and then pay the balance
due before the departure date. We are providing flexibility to guests with bookings on sailings cancelled due to the pause in
cruise operations by allowing guests to receive enhanced future cruise credits ("FCC") or to elect to receive refunds in cash.
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VII. Seasonality
Our passenger ticket revenues are seasonal. Historically, demand for cruises has been greatest during our third quarter, which
includes the Northern Hemisphere summer months, although 2020 has been adversely impacted by COVID-19. This higher
demand during the third quarter results in higher ticket prices and occupancy levels and, accordingly, the largest share of our
operating income is typically earned during this period. This historical trend has been disrupted by the pause in global cruise
operations. In addition, substantially all of Holland America Princess Alaska Tours’ revenue and net income (loss) is generated
from May through September in conjunction with Alaska’s cruise season. During 2020, the Alaska cruise season was adversely
impacted by the effects of COVID-19.
VIII. Onboard and Other Revenues
Onboard and other activities are provided either directly by us or by independent concessionaires, from which we receive either
a percentage of their revenues or a fee. Concession revenues do not have direct expenses because the costs and services incurred
for concession revenues are borne by our concessionaires. In 2019, we earned 30% of our revenues from onboard and other
revenue goods and services not included in the cruise ticket price including the following:
• Beverage sales • Internet and communication services
• Casino gaming • Full service spas
• Shore excursions • Specialty restaurants
• Retail sales • Art sales
• Photo sales • Laundry and dry cleaning services
IX. Marketing Activities
We significantly reduced our marketing activities in 2020 due to the pause in global cruise operations as a result of COVID-19.
Historically, guest feedback and research have supported the development of our overall marketing and business strategies to
drive demand for cruises and increase the number of first-time cruisers. Our goal has always been to increase consumer
awareness for cruise vacations and further grow our share of their vacation spend. We measure and evaluate key drivers of
guest loyalty and their satisfaction with our products and services that provide valuable insights about guests’ cruise
experiences. We closely monitor our net promoter scores, which reflect the likelihood that our guests will recommend our
brands’ cruise products and services to friends and family.
Our brands historically have had comprehensive marketing and advertising programs across diverse mediums to promote their
products and services to vacationers and our travel agent partners. Each brand’s marketing activities have generally been
designed to reach a local region in the local language. Our marketing efforts historically have allowed us to attract new guests
online by leveraging the reach and impact of digital marketing and social media. Over time, we have invested in new marketing
technologies to deliver more engaging and personalized communications. This has helped us cultivate guests as advocates of
our brands, ships, itineraries and onboard products and services.
Substantially all of our cruise brands offer past guest recognition programs that reward repeat guests with special incentives
such as reduced fares, gifts, onboard activity discounts, complimentary laundry and internet services, expedited ship
embarkation and disembarkation and special onboard activities.
X. Sales Relationships
We primarily sell our cruises through travel agents and tour operators that serve our guests in their local regions. Our individual
cruise brands’ relationships with their travel agent partners are generally independent of each of our other brands. Our travel
agents relationships are generally not exclusive and travel agents generally receive a base commission, plus the potential of
additional commissions, including discounts or complimentary tour conductor cabins, based on the achievement of pre-defined
sales volumes. In 2020, we continued to support our travel agent partners by generally protecting commissions on sailings
cancelled as a result of COVID-19.
Travel agent partners are an integral part of our long-term cruise distribution network and are critical to our success. We utilize
local sales teams to motivate travel agents to support our products and services with competitive sales and pricing policies and
joint marketing and advertising programs. We also employ a wide variety of educational programs, including websites,
seminars and videos, to train agents on our cruise brands and their products and services. In 2020, due to physical distancing
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requirements, we held a variety of virtual training and educational programs to continue to support and develop our travel agent
partners.
All of our brands have internet booking engines to allow travel agents to book our cruises. We also support travel agent booking
capabilities through global distribution systems. All of our cruise brands have their own consumer websites that provide access
to information about their products and services to users and enable their guests to quickly and easily book cruises and other
products and services online. These sites interface with our brands’ social networks, blogs and other social media sites, which
allow them to develop greater contact and interaction with their guests before, during and after their cruise. We also employ
vacation planners who support our sales initiatives by offering our guests one-on-one cruise planning expertise and other
services.
XI. Ethics and Compliance
We believe a clear and strong ethics and compliance culture is imperative for the future success of any corporation. In August
2019, we enhanced our compliance framework and significantly increased the resources we devote to our compliance function
by creating an Ethics and Compliance (“E&C”) governance function, as well as an ethics and compliance strategic plan. Our
Chief Ethics and Compliance Officer, an executive officer and member of the executive leadership team, leads the effort to
promote a strong ethics and compliance culture and further develop our E&C governance function throughout the company.
This function involves compliance risk management, improved compliance training programs for our employees, thorough
investigations relating to health, environmental and safety incidents and efforts to strengthen our corporate culture. More
specifically, the E&C governance function’s strategic plan sets out the following four goals:
• Align and build upon fundamental principles - strengthen culture to support ethics and compliance
• Be proactive and embrace a risk-based approach - develop a more strategic mindset
• Assemble the people, platform and processes - organize ethics and compliance leadership, governance and procedures
• Listen and learn - promote open communications: speaking-up, listening, learning and responding
By taking these measures, we heightened our commitment to operate with integrity, which includes not only complying with
applicable laws, but also treating our guests, employees and stakeholders with honesty, transparency and respect. To further
heighten the focus on ethics and compliance, the Boards of Directors established the Compliance Committees, which oversee
the E&C governance function, maintain regular communications with the Chief Ethics and Compliance Officer and ensure
implementation of the E&C governance function’s strategic plan.
In 2020, despite the challenges related to COVID-19, we developed an interim strategic plan, called the Pause Priorities Plan,
which included various improvements to be made during the pause in guest cruise operations. These improvements included the
following:
• In the environmental arena, we made progress on improving food waste management; developing criteria for bringing
back the most qualified environmental and technical talent before we resume guest operations; launching our Fleet
Environmental Officer Program to further support, train and coach our environmental officers; developing a new and
improved virtual environmental training program for Environmental Officers; and improving our efforts to conduct
due diligence on the waste vendors that we engage across the company.
• For health, safety and security, we have made substantial progress in developing new protocols, installation of filters
and testing equipment, and new awareness training to respond to the COVID-19 health crisis and to comply with the
CDC’s current framework and the guidelines of other governmental authorities.
• To strengthen our capabilities to conduct internal investigations of HESS incidents, we revised and improved our
investigation procedures and developed new training on root cause analysis.
• To continue strengthening the corporate culture, we developed a Culture Action Plan, which consists of various
activities undertaken throughout 2020 and expected to continue into 2021, including efforts to highlight and
incentivize key actions and behaviors, new trainings for managers and leaders, more frequent communications, revised
performance evaluations, and culture surveys to measure progress. More specifically, we developed and announced
our Culture Essentials, which are the key actions and behaviors we will seek to encourage and reinforce to further
strengthen our culture.
XII. Sustainability
We strive to be a company that people want to work for and to be an exemplary global corporate citizen. Our commitment and
actions to keep our guests and crew members safe and comfortable, protect the environment, develop and provide opportunities
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for our workforce, strengthen stakeholder relations and enhance both the communities where we work as well as the port
communities that our ships visit, are reflective of our brands’ core values and vital to our success as a business enterprise.
We voluntarily publish Sustainability Reports that address governance, stakeholder engagement, environmental, labor, human
rights, society, product responsibility, economic and other sustainability-related issues and performance indicators. These
reports, which are not incorporated in this document but can be viewed at www.carnivalcorp.com, www.carnivalplc.com and
www.carnivalsustainability.com, were developed in accordance with the Global Reporting Initiative (GRI) Standards, the
global standard for sustainability reporting. We have been publishing Sustainability Reports since 2011.
XIII. Human Capital Management and Employees
Our shipboard and shoreside employees are sourced from over 100 countries. Excluding employees on leave, we reduced the
employees onboard our ships throughout 2020 during the pause in guest cruise operations in order to maintain safe manning
levels. In 2020 and 2019, we had an average of 58,000 and 92,000 employees onboard the ships we operated. Throughout 2020
we reduced our shoreside operations, resulting in an annual average of 11,000 full-time and 1,000 part-time/seasonal
employees. In 2019, we had an average of 12,000 full-time and 2,000 part-time/seasonal employees. Historically, Holland
America Princess Alaska Tours significantly increases its work force during the late spring and summer months in connection
with the Alaskan cruise season. We have entered into agreements with unions covering certain employees on our ships and in
our shoreside hotel and transportation operations. The percentages of our shipboard and shoreside employees that are
represented by collective bargaining agreements are 63% and 26%, respectively. We consider our employee and union
relationships to be strong.
A team of highly motivated and engaged employees is key to delivering vacation experiences that exceed our guests’
expectations. To facilitate the recruitment, development and retention of our valuable team members, we strive to make
Carnival Corporation & plc a diverse, inclusive and safe workplace, with opportunities for our employees to grow and develop
in their careers.
Refer to "Recent Developments" for additional discussion regarding health and safety of our team members in light of
COVID-19.
a. Talent Development
We believe in the investment in our team members through the training and development of both shoreside and shipboard
employees. During the operational pause, our training teams have made significant progress in delivering virtual training to
augment the normal training historically completed in-person. We anticipate as we move from the pause into full operations that
we will continue to leverage a combination of virtual and in-person training to ensure that our teams are well-prepared to carry
out their individual and collective responsibilities.
For our shipboard employees our goal is to be a leader in delivering high quality professional maritime training, as evidenced
by the Arison Maritime Center. The Center is home to the Center for Simulator Maritime Training (“CSMART”). The leading
edge CSMART Academy features the most advanced bridge and engine room simulator technology and equipment available
with the capacity to provide annual professional training for all our bridge and engineering officers. CSMART participants
receive a maritime training experience that fosters critical thinking, problem solving, ethical decision making and skill
development. CSMART offers an environmental officer training program and additional environmental courses for bridge and
engineering officers to further enhance our training on social responsibility and environmental awareness and protection.
b. Succession Planning
Our Boards of Directors believe that planning for succession is an important function. Our multi-brand structure enhances our
succession planning process. At the corporate level, a highly-skilled management team oversees a collection of cruise brands.
At both the corporate and brand levels, we continually strive to foster the professional development of senior management and
other critical roles. As a result, Carnival Corporation & plc has developed a very experienced and strong group of leaders, with
their performance subject to ongoing monitoring and evaluation, as potential successors to all of our senior executive positions,
including our Chief Executive Officer.
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XIV. Supply Chain
We incur expenses for goods and services to deliver exceptional cruise experiences to our guests. In addition, we incur
significant capital expenditures for materials to support the refurbishment and enhancements of our vessels as well as to build
new ships. We approach our spend strategically and look for suppliers who demonstrate the ability to help us leverage our scale
in terms of cost, quality, service, innovation and sustainability. We are focused on the creation of strategic partnerships and will
streamline our supplier base where it is prudent. Our largest capital investments are for the construction of new ships.
XV. Insurance
a. General
We maintain insurance to cover a number of risks associated with owning and operating our vessels and other non-ship related
risks. All such insurance policies are subject to coverage limits, exclusions and deductible levels. Insurance premiums are
dependent on our own loss experience and the general premium requirements of our insurers. We maintain certain levels of
deductibles for substantially all the below-mentioned coverages. We may increase our deductibles to mitigate future premium
increases. We do not carry coverage related to loss of earnings or revenues from our ships or other operations.
b. Protection and Indemnity (“P&I”) Coverages
Liabilities, costs and expenses for illness and injury to crew, guest injury, pollution and other third party claims in connection
with our cruise activities are covered by our P&I clubs, which are mutual indemnity associations owned by ship owners.
We are members of three P&I clubs, Gard, Steamship Mutual and UK Club, which are part of a worldwide group of 13 P&I
clubs, known as the International Group of P&I Clubs (the “IG”). The IG insures directly, and through broad and established
reinsurance markets, a large portion of the world’s shipping fleets. Coverage is subject to the P&I clubs’ rules and the limits of
coverage are determined by the IG.
c. Hull and Machinery Insurance
We maintain insurance on the hull and machinery of each of our ships for reasonable amounts as determined by management.
The coverage for hull and machinery is provided by large and well-established international marine insurers. Insurers make it a
condition for insurance coverage that a ship be certified as “in class” by a classification society that is a member of the
International Association of Classification Societies (“IACS”). All of our ships are routinely inspected and certified to be in
class by an IACS member.
d. War Risk Insurance
We use a combination of insurance and self-insurance to cover war risk for legal liability to crew, guests and other third parties
as well as loss or damage to our vessels arising from war or war-like actions. Our primary war risk insurance coverage is
provided by international marine insurers and our excess war risk insurance is provided by our three P&I clubs. Under the terms
of our war risk insurance coverage, which are typical for war risk policies in the marine industry, insurers can give us seven
days’ notice that the insurance policies will be canceled. However, the policies can be reinstated at different premium rates.
e. Other Insurance
We maintain property insurance covering our shoreside assets and casualty insurance covering liabilities to third parties arising
from our hotel and transportation business, shore excursion operations and shoreside operations, including our port and related
commercial facilities. We also maintain worker’s compensation, director’s and officer’s liability and other insurance coverages.
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XVI. Governmental Regulations
a. Maritime Regulations
1. General
Our ships are regulated by numerous international, national, state and local laws, regulations, treaties and other legal
requirements, as well as voluntary agreements, which govern health, environmental, safety and security matters in relation to
our guests, crew and ships. These requirements change regularly, sometimes on a daily basis, depending on the itineraries of
our ships and the ports and countries visited. If we violate or fail to comply with any of these laws, regulations, treaties and
other requirements we could be fined or otherwise sanctioned by regulators. We are committed to complying with, or
exceeding, all relevant maritime requirements.
The primary regulatory bodies that establish maritime laws and requirements applicable to our ships include:
The International Maritime Organization (“IMO”): All of our ships, and the maritime industry as a whole, are
subject to the maritime safety, security and environmental regulations established by the IMO, a specialized agency of
the United Nations. The IMO’s principal sets of requirements are mandated through its International Convention for
the Safety of Life at Sea (“SOLAS”) and its International Convention for the Prevention of Pollution from Ships
(“MARPOL”).
Flag States: Our ships are registered, or flagged, in The Bahamas, Bermuda, Italy, Malta, the Netherlands, Panama
and the UK, which are also referred to as Flag States. Our ships are regulated by these Flag States through
international conventions that govern, among other things, health, environmental, safety and security matters in
relation to our guests, crew and ships. Representatives of each Flag State conduct periodic inspections, surveys and
audits to verify compliance with these requirements.
Ship classification societies: Class certification is one of the necessary documents required for our cruise ships to be
flagged in a specific country, obtain liability insurance and legally operate as passenger cruise ships. Our ships are
subject to periodic class surveys, including dry-dock inspections, by ship classification societies to verify that our ships
have been maintained in accordance with the rules of the classification societies and that recommended repairs have
been satisfactorily completed. Dry-dock frequency is a statutory requirement mandated by SOLAS. Our ships dry-
dock once or twice every five years, depending on the age of the ship.
National, regional and other authorities: We are subject to the decrees, directives, regulations and requirements of
the European Union (“EU”), the UK, the U.S., other countries and hundreds of other authorities including international
ports that our ships visit every year.
Port regulatory authorities (Port State Control): Our ships are also subject to inspection by the port regulatory
authorities, which are also referred to as Port State Control, in the various countries that they visit. Such inspections
include verification of compliance with the maritime safety, security, environmental, customs, immigration, health and
labor requirements applicable to each port, as well as with regional, national and international requirements. Many
countries have joined together to form regional Port State Control authorities.
As members of the Cruise Lines International Association (“CLIA”), we helped to develop and have implemented policies that
are intended to enhance shipboard safety and environmental protection throughout the cruise industry. In some cases this calls
for implementing best practices, which are in excess of existing legal requirements. Further details on these and other policies
can be found on www.cruising.org.
Our Boards of Directors have HESS Committees, which were comprised of six independent directors as of December 1, 2020.
The principal function of the HESS Committees is to assist the boards in fulfilling their responsibility to supervise and monitor
our health, environment, safety, security and sustainability related policies, programs and initiatives at sea and ashore and
compliance with related legal and regulatory requirements. The HESS Committees and our management team review all
significant relevant risks or exposures and associated mitigating actions.
We are committed to implementing appropriate measures to manage identified risks effectively. We have a Chief Maritime
Officer to oversee our global maritime operations, including maritime policy, maritime affairs, training, shipbuilding, asset
19
management, ship refits and research and development. In addition, we have a Chief Ethics and Compliance Officer who is
responsible for overseeing our ethics and compliance governance function, including all areas of HESS.
To help ensure that we are compliant with legal and regulatory requirements and that these areas of our business operate in an
efficient and effective manner we:
• Provide regular health, environmental, safety and security support, training, guidance and information to guests,
employees and others working on our behalf
• Develop and implement effective and verifiable management systems to fulfill our health, environmental, safety,
security and sustainability commitments
• Perform regular shoreside and shipboard audits and take appropriate action when deficiencies are identified
• Report and investigate health, environmental, safety and security incidents and strive to take appropriate action to
prevent recurrence
• Identify those employees responsible for managing health, environment, safety, security and sustainability programs
and aim to establish clear lines of accountability
• Identify the aspects of our business with potential to impact the environment and continue to take appropriate action to
minimize that impact
• Monitor an anonymous hotline for any reported allegations or concerns and the related responses
• Review and work to improve policies and procedures designed to prevent, detect, respond and correct various
regulatory violations and other misconduct
2. Maritime Safety Regulations
The IMO has adopted safety standards as part of SOLAS. To help ensure guest and crew safety, SOLAS establishes
requirements for the following:
• Vessel design and structural features • Life-saving and other equipment
• Construction and materials • Fire protection and detection
• Refurbishment standards • Safe management and operation
• Radio communications • Musters
All of our crew undergo regular safety training that meets or exceeds all international maritime regulations, including SOLAS
requirements, which are periodically revised.
SOLAS requires implementation of the International Safety Management Code (“ISM Code”), which provides an international
standard for the safe management and operation of ships and for pollution prevention. The ISM Code is mandatory for
passenger vessel operators. Under the ISM Code, vessel operators are required to:
• Develop and implement a Safety Management System (“SMS”) that includes, among other things, the adoption of
safety and environmental protection policies setting forth instructions and procedures for operating vessels safely and
describing procedures for responding to emergencies and protecting the environment. In addition, our SMS includes
health and security procedures.
• Obtain a Document of Compliance (“DOC”) for the vessel operator, as well as a Safety Management Certificate
(“SMC”) for each vessel they operate. These documents are issued by the vessel’s Flag State and evidence compliance
with the ISM Code and the SMS
• Verify or renew DOCs and SMCs periodically in accordance with the ISM Code
We have implemented and continue to develop policies and procedures that we believe enhance our commitment to the safety
of our guests and crew. These initiatives include the following:
• Training of our bridge, engineering and environmental officers in maritime related best practices facilitated by our
CSMART Academy, the Center for Simulator Maritime Training located within our Arison Maritime Center in
Almere, Netherlands
• Further standardization of our detailed bridge and engine resource management procedures on our ships
• Expansion of our existing oversight function to monitor bridge and engine room operations through state of the art
fleet operations centers in Miami, Seattle and Hamburg
• Identifying and promoting the use of international standards and best-practice policies and procedures in health,
environmental, safety and security disciplines across the organization including on all our ships
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• Further enhancement of our processes for auditing our HESS performance throughout our operations
3. Maritime Security Regulations
Our ships are subject to numerous security requirements. These requirements include the International Ship and Port Facility
Security Code, which is part of SOLAS, the U.S. Maritime Transportation Security Act of 2002, which addresses U.S. port and
waterway security and the U.S. Cruise Vessel Security and Safety Act of 2010, which applies to all of our ships that embark or
disembark passengers in the U.S. These regulations include requirements as to the following:
• Implementation of specific security measures, including onboard installation of a ship security alert system
• Assessment of vessel security
• Efforts to identify and deter security threats
• Training, drills and exercises
• Security plans that may include guest, vehicle and baggage screening procedures, security patrols, establishment of
restricted areas, personnel identification procedures, access control measures and installation of surveillance
equipment
• Establishment of procedures and policies for reporting and managing allegations of crimes
4. Maritime Environmental Regulations
We are subject to numerous international, national, state and local environmental laws, regulations and treaties that govern air
emissions, waste management, and the storage, handling, use and disposal of hazardous substances such as chemicals, solvents
and paints.
As a means of managing and improving our environmental performance and compliance, we adhere to standards set by ISO
(International Organization for Standardization), an international standard-setting body, which produces worldwide industrial
and commercial standards. The environmental management system of our company and ships is certified in accordance with
ISO 14001, the environmental management standard that was developed to help organizations manage the environmental
impacts of their processes, products and services. ISO 14001 defines an approach to setting and achieving environmental
objectives and targets, within a structured management framework.
i. International Regulations
The principal international convention governing marine pollution prevention and response is MARPOL.
a. Preventing and Minimizing Pollution
MARPOL includes six annexes, four of which are applicable to our cruise ships, containing requirements designed to prevent
and minimize both accidental and operational pollution by oil, sewage, garbage and air emissions and sets forth specific
requirements related to vessel operations, equipment, recordkeeping and reporting that are designed to prevent and minimize
pollution. All of our ships must carry an International Oil Pollution Prevention Certificate, an International Sewage Pollution
Prevention Certificate, an International Air Pollution Prevention Certificate and a Garbage Management Plan. The ship’s Flag
State issues these certificates, which evidence their compliance with the MARPOL regulations regarding prevention of
pollution by oil, sewage, garbage and air emissions. Certain jurisdictions have not adopted all of these MARPOL annexes but
have established various national, regional or local laws and regulations that apply to these areas.
As noted above, MARPOL governs the prevention of pollution by oil from operational measures, as well as from accidental
discharges. MARPOL requires that discharges of machinery space bilge water pass through pollution prevention equipment that
separates oil from the water and monitors the discharged water to ensure that the effluent does not exceed 15 parts per million
oil content. During 2019, we voluntarily completed the upgrade of oily water separation equipment to the latest MARPOL
standards as set forth by the IMO onboard all of our ships. Our ships have oily water separators with oil content monitors
installed and maintain a record of certain engine room operations in an Oil Record Book. In addition, we have voluntarily
installed redundant systems on all of our ships that monitor processed bilge water a second time prior to discharge to help
ensure that it contains no more than 15 parts per million oil content. This system also provides additional controls to prevent
improper bilge water discharges. MARPOL also requires that our ships have Shipboard Oil Pollution Emergency Plans.
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MARPOL also governs the discharge of sewage from ships and contains regulations regarding the ships’ equipment and
systems for the control of sewage discharge, the provision of facilities at ports and terminals for the reception of sewage and
requirements for survey and certification.
MARPOL also governs the discharge of garbage from ships and requires the implementation of Garbage Management Plan and
the maintenance of a Garbage Record Book.
Furthermore, MARPOL addresses air emissions from vessels, establishes requirements for the prevention of air pollution from
ships to reduce emissions of sulfur oxides (“SOx”), nitrogen oxides (“NOx”) and particulate matter. It also contains restrictions
on the use of ozone depleting substances (“ODS”) and requires the recording of ODS use, equipment containing ODS and the
emission of ODS.
b. Sulfur Emissions
The International Maritime Organization has adopted a global 0.5% sulfur cap for marine fuel which began in January 2020.
The EU Parliament and Council has also adopted 0.5% sulfur content fuel requirement (the “EU Sulfur Directive”). The options
to comply with both the global 0.5% sulfur cap and the EU Sulfur Directive include the installation of Advanced Air Quality
Systems, or the use of low sulfur or alternative fuels.
MARPOL addresses air emissions from both auxiliary and main propulsion diesel engines on ships and further specifies
requirements for Emission Control Areas (“ECAs”) with stricter limitations on sulfur emissions content in these areas, requiring
ships to use fuel with a sulfur content of no more than 0.1%, or to use alternative emission reduction methods, such as
Advanced Air Quality Systems.
We have Advanced Air Quality Systems on most of our ships, which are aiding in partially mitigating the financial impact from
the ECAs and global 0.5% sulfur requirements.
c. Other Ship Emission Abatement Methods
In the long-term, the cost impacts of meeting progressively lower sulfur fuel requirements may be further mitigated by the
impact of future changes in the supply and demand balance for marine and other types of fuel, future developments of and
investments in improved sulfur emission abatement technologies, the use of alternative lower cost and lower emission fuels and
our continued efforts to improve the overall fuel efficiency across our fleet. From 2008 through 2019, we have achieved
approximately 32% cumulative reduction in unit fuel consumption by focusing on more efficient itineraries, a wide variety of
ships’ system hardware and software, energy-efficiency upgrades (including hull coatings, air conditioning and engine
performance improvements, fresh water savers and LED lighting), creating collaborative energy-savings groups across
operating lines and ships’ staff energy use awareness and training.
As part of our emission abatement program, we have continued our work with several local port authorities to utilize cruise ship
shore power connections and have equipped 39 of our ships with the ability to utilize shore power technology. This technology
enables our ships to use power from the local electricity provider rather than running their engines while in port to power their
onboard services, thus reducing our ship air emissions.
Similarly, in an effort to extend our commitment to sustainability and to play a leading role in matters of environmental
protection in the cruise industry, we are expanding our investment in the use of low carbon fuels, in particular, LNG.
AIDAnova, the first cruise ship in the world with the ability to use LNG to generate 100 percent of its power both in port and on
the open sea, entered the fleet in December 2018, followed by two additional LNG ships, Costa Smeralda and Iona. We also
have eight more next generation LNG cruise ships on order. These innovative ships generate significantly less exhaust than
traditionally powered ships and we believe, on balance, may greatly reduce our impact on the environment.
d. Greenhouse Gas Emissions (“GHG”)
In 2013, the IMO approved measures to improve energy efficiency and reduce emissions of GHGs from international shipping
by adopting technical and operational measures for all ships. The technical measures apply to the design of new vessels, and the
operational reduction measures apply to all vessels. Operational reduction measures have been implemented through a variety
of means, including a Ship Energy Efficiency Management Plan, improved voyage planning and more frequent propeller and
hull cleanings. We have established objectives within the ISO 14001 environmental management system for each of our brands
to further reduce fuel consumption rates and the resulting GHG emissions.
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In 2016, the IMO approved the implementation of a mandatory data collection system (“DCS”) for fuel oil consumption. The
DCS requires ships of 5,000 gross tons and above to provide fuel oil consumption data to their respective flag State at the end
of each calendar year, beginning in 2019. Flag States validate the data and transfer it to an IMO database. The IMO will
produce a summary annual report with anonymous data. In 2018, the IMO also set aspirations to achieve several shipping
industry GHG emission reduction goals with 2030 and 2050 target dates. In November 2020, the IMO’s Marine Environment
Protection Committee approved further MARPOL changes in support of its GHG emission reduction goals, which are expected
to enter into force on January 1, 2023.
e. Ballast Water
In 2017, the IMO’s Ballast Water Management Convention entered into force, which governs the discharge of ballast water
from ships. Subsequent amendments effectively extended the implementation date for installation of ballast water management
systems for existing ships by about two years, though other requirements went into effect immediately, including requirements
for ballast water exchange, record keeping, and maintaining an approved Ballast Water Management Plan. Ballast water is
water used to stabilize ships at sea and maintain safe operating conditions throughout a voyage. Ballast water can carry a
multitude of marine species. The Convention is designed to regulate the treatment of ballast water prior to discharging
overboard in order to avoid the transfer of marine species to new environments, as well as establishing other ballast water
management practices for monitoring and environmental protection.
ii. U.S. Federal and State Regulations
The Act to Prevent Pollution from Ships implements several MARPOL Annexes in the U.S. and imposes numerous
requirements on our ships, as discussed above. Administrative, civil and criminal penalties may be assessed for violations.
The Oil Pollution Act of 1990 (“OPA 90”) established a comprehensive federal liability regime, as well as prevention and
response requirements, relating to discharges of oil in U.S. waters. The major requirements include demonstrating financial
responsibility up to the liability limits set by OPA 90 and having oil spill response plans in place. We have Certificates of
Financial Responsibility (“COFR”) that demonstrate our ability to meet the liability limits of OPA 90 based on the gross
tonnage of our ships for removal costs and damages, such as from an oil spill. The COFR also covers releases of hazardous
substances. It is possible, however, for our liability limits to be broken, which could expose us to unlimited liability. Under
OPA 90, owners or operators of vessels operating in U.S. waters must file Vessel Response Plans with the U.S. Coast Guard
(“USCG”) and must operate and conduct any response action in compliance with these plans. As OPA 90 expressly allows
coastal states to impose liabilities and requirements beyond those imposed under federal law, many U.S. states have enacted
laws more stringent than OPA 90. Some of these state laws impose unlimited liability for oil spills and contain more stringent
financial responsibility and contingency planning requirements. Most coastal states have also enacted environmental regulations
that impose strict liability for removal costs and damages resulting from a discharge of oil or a release of a hazardous substance,
similar to OPA 90.
The Clean Water Act (“CWA”) provides the U.S. Environmental Protection Agency (“EPA”) with the authority to regulate
incidental discharges from commercial vessels, including discharges of ballast water, bilge water, gray water, anti-fouling
paints and other substances during normal operations within the U.S. three mile territorial sea and inland waters. Pursuant to the
CWA authority, the U.S. National Pollutant Discharge Elimination System was designed to minimize pollution within U.S.
territorial waters. For our affected ships, the incidental discharge requirements are set forth in EPA’s Vessel General Permit
(“VGP”) for discharges incidental to the normal operations of vessels. The VGP establishes effluent limits for 27 specific
discharges incidental to the normal operation of a vessel, many of which apply to our cruise ships. In addition to the
requirements associated with these discharges and more stringent vessel-specific requirements, the VGP includes requirements
for inspections, monitoring, reporting and record-keeping. In 2018, the Vessel Incidental Discharge Act (“VIDA”) was signed
into law and was intended to clarify and streamline discharge requirements for the incidental discharges covered by the VGP
and certain USCG regulations for ballast water. More specifically, a new section was added to the CWA called “Uniform
National Standards for Discharges Incidental to Normal Operation of Vessels.” Once fully implemented, VIDA will replace the
VGP; however, while the standards and regulations are being developed, which is expected to take at least until the end of
2022, the 2013 VGP has been administratively extended and will remain in effect. VIDA requires the standards and regulations
to be at least as stringent as the existing requirements in the 2013 VGP and USCG regulations, unless information becomes
available that was not reasonably available when the initial standard of performance was issued, and that information would
have justified a less stringent standard. In October 2020, the EPA posted its notice of proposed rulemaking to set standards for
20 types of vessel discharges incidental to normal operations. The discharge standards are organized into three categories: (1)
general operation and maintenance; (2) biofouling management; and (3) oil management. These standards mandate overall
minimization of discharges and prescribe associated best management practices. No training or education requirements are
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included, as these will be set by the USCG in its rulemaking once EPA’s standards are finalized. Notably, EPA incorporated
discharge standards applicable to exhaust gas cleaning system discharges based substantially on applicable IMO guidelines,
which better harmonizes the VGP and IMO requirements. While the proposed rule provides clarity into the likely structure of
VIDA, there is uncertainty over the mechanism through which state-specific standards may be implemented.
We are subject to the requirements of the U.S. Resource Conservation and Recovery Act for the disposal of both hazardous and
non-hazardous solid wastes that are generated by our ships. In general, vessel owners are required to determine if their wastes
are hazardous and, when landing waste ashore, comply with certain standards for the proper management of hazardous wastes,
including the use of hazardous waste manifests for shipments to approved disposal facilities.
The U.S. National Invasive Species Act (“NISA”) was enacted in 1996 in response to growing reports of harmful organisms
being released into U.S. waters through ballast water taken on by vessels in foreign waters. The USCG adopted regulations
under NISA that impose mandatory ballast water management practices for all vessels equipped with ballast water tanks
entering U.S. waters. Depending on a vessel’s compliance date for installation of a USCG type-approved ballast water
management system, these requirements may now be met by performing mid-ocean ballast exchange, by retaining ballast water
onboard the vessel or by using a ballast water management system authorized or approved by the USCG. In the near future,
ballast exchange will no longer be permissible. These USCG regulations, however, will ultimately be replaced with the new
regulatory regime being developed under VIDA, which is expected to contain similar requirements.
The state of Alaska has enacted legislation that prohibits certain discharges in designated Alaskan waters and sets effluent limits
on others, which are applicable to cruise ships. Further, the state of Alaska requires that certain discharges be reported and
monitored to verify compliance with the standards established by the legislation. Environmental regimes in Alaska are more
stringent than the U.S. federal requirements with regard to discharges from vessels. The legislation also provides that repeat
violators of the regulations could be prohibited from operating in Alaskan waters. The state of California also has
environmental requirements significantly more stringent than federal requirements for water discharges and air emissions.
iii. EU Regulations
The EU has adopted a broad range of substantial environmental measures aimed at improving the quality of the environment for
European citizens. To support the implementation and enforcement of European environmental legislation, the EU has adopted
directives on environmental liability and enforcement and a recommendation providing for minimum criteria for environmental
inspections.
The European Commission’s (“EC”) strategy is to reduce emissions from ships. The EC strategy seeks to implement SOx
Emission Control Areas set out in MARPOL, as discussed above.
The EC has also implemented regulations aimed at reducing GHG emissions from maritime shipping through a Monitoring,
Reporting and Verification regulation, which involves collecting emissions data from ships over 5,000 gross tons to monitor
and report carbon emissions on all voyages to, from and between European Union ports.
5. Maritime Health Regulations
We are committed to providing a healthy environment for all of our guests and crew. We collaborate with public health
inspection programs throughout the world, such as the CDC in the U.S. and the SHIPSAN Project in the EU as well as CLIA’s
Public Health and Medical Policy to ensure that development of these programs leads to enhanced health and hygiene onboard
our ships. Through our collaborative efforts, we work with the authorities to develop and revise guidelines, review plans and
conduct on-site inspections for all newbuilds and significant ship renovations. In addition, we continue to maintain our ships by
meeting, and often exceeding, applicable public health guidelines and requirements, complying with inspections, reporting
communicable illnesses and conducting regular crew training and guest education programs.
Refer to "Recent Developments" for additional discussion regarding health and safety protocols in light of COVID-19.
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6. Maritime Labor Regulations
The International Labor Organization develops and oversees international labor standards and includes a broad range of
requirements, such as the definition of a seafarer, minimum age of seafarers, medical certificates, recruitment practices,
training, repatriation, food, recreational facilities, health and welfare, hours of work and rest, accommodations, wages and
entitlements.
The International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, as amended, establishes
additional minimum standards relating to training, including security training, certification and watchkeeping for our seafarers.
b. Other Governmental Regulations
In most major countries where we source our guests, we are required to establish financial responsibility, such as obtaining a
guarantee from stable financial institutions and insurance companies, to satisfy liability in cases of our non-performance of
obligations to our guests. The amount of financial responsibility varies by jurisdiction based on the amount mandated by the
applicable local regulatory agencies or association.
In Australia and most of Europe, we may be obligated to honor our guests’ cruise payments made by them to their travel agents
and tour operators regardless of whether we receive these payments.
We are also subject to many other laws and regulations which require our compliance, including those addressing antitrust, anti-
money laundering, data privacy, securities, sanctions, bribery and corruption, as well as human resources related matters.
XVII. Taxation
A summary of our principal taxes and exemptions in the jurisdictions where our significant operations are located is as follows:
a. U.S. Income Tax
We are primarily foreign corporations engaged in the business of operating cruise ships in international transportation. We also
own and operate, among other businesses, the U.S. hotel and transportation business of Holland America Princess Alaska Tours
through U.S. corporations.
Our North American cruise ship businesses and certain ship-owning subsidiaries are engaged in a trade or business within the
U.S. Depending on its itinerary, any particular ship may generate income from sources within the U.S. We believe that our U.S.
source income and the income of our ship-owning subsidiaries, to the extent derived from, or incidental to, the international
operation of a ship or ships, is currently exempt from U.S. federal income and branch profit taxes.
Our domestic U.S. operations, principally the hotel and transportation business of Holland America Princess Alaska Tours, are
subject to federal and state income taxation in the U.S.
1. Application of Section 883 of the Internal Revenue Code
In general, under Section 883 of the Internal Revenue Code, certain non-U.S. corporations (such as our North American cruise
ship businesses) are not subject to U.S. federal income tax or branch profits tax on U.S. source income derived from, or
incidental to, the international operation of a ship or ships. Applicable U.S. Treasury regulations provide in general that a
foreign corporation will qualify for the benefits of Section 883 if, in relevant part, (i) the foreign country in which the foreign
corporation is organized grants an equivalent exemption to corporations organized in the U.S. in respect of each category of
shipping income for which an exemption is being claimed under Section 883 (an “equivalent exemption jurisdiction”) and (ii)
the foreign corporation meets a defined publicly-traded corporation stock ownership test (the “publicly-traded test”).
Subsidiaries of foreign corporations that are organized in an equivalent exemption jurisdiction and meet the publicly-traded test
also benefit from Section 883. We believe that Panama is an equivalent exemption jurisdiction and that Carnival Corporation
currently satisfies the publicly-traded test under the regulations. Accordingly, substantially all of Carnival Corporation’s income
is exempt from U.S. federal income and branch profit taxes.
Regulations under Section 883 list certain activities that the Internal Revenue Service (“IRS”) does not consider to be incidental
to the international operation of ships and, therefore, the income attributable to such activities, to the extent such income is U.S.
source, does not qualify for the Section 883 exemption. Among the activities identified as not incidental are income from the
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sale of air transportation, transfers, shore excursions and pre- and post-cruise land packages to the extent earned from sources
within the U.S.
2. Exemption Under Applicable Income Tax Treaties
We believe that the U.S. source transportation income earned by Carnival plc and its subsidiaries currently qualifies for
exemption from U.S. federal income tax under applicable bilateral U.S. income tax treaties.
3. U.S. State Income Tax
Carnival Corporation and Carnival plc and certain of their subsidiaries are subject to various U.S. state income taxes generally
imposed on each state’s portion of the U.S. source income subject to U.S. federal income taxes. However, the state of Alaska
imposes an income tax on its allocated portion of the total income of our companies doing business in Alaska and certain of
their subsidiaries.
b. UK and Australian Income Tax
Cunard, P&O Cruises (UK) and P&O Cruises (Australia) are divisions of Carnival plc and have elected to enter the UK tonnage
tax under a rolling ten-year term and, accordingly, reapply every year. Companies to which the tonnage tax regime applies pay
corporation taxes on profits calculated by reference to the net tonnage of qualifying ships. UK corporation tax is not chargeable
under the normal UK tax rules on these brands’ relevant shipping income. Relevant shipping income includes income from the
operation of qualifying ships and from shipping related activities.
For a company to be eligible for the regime, it must be subject to UK corporation tax and, among other matters, operate
qualifying ships that are strategically and commercially managed in the UK. Companies within UK tonnage tax are also subject
to a seafarer training requirement.
Our UK non-shipping activities that do not qualify under the UK tonnage tax regime remain subject to normal UK corporation
tax.
P&O Cruises (Australia) and all of the other cruise ships operated internationally by Carnival plc for the cruise segment of the
Australian vacation region are exempt from Australian corporation tax by virtue of the UK/Australian income tax treaty.
c. Italian and German Income Tax
In 2015, Costa and AIDA re-elected to enter the Italian tonnage tax regime through 2024 and can reapply for an additional ten-
year period beginning in early 2025. Companies to which the tonnage tax regime applies pay corporation taxes on shipping
profits calculated by reference to the net tonnage of qualifying ships.
Most of Costa’s and AIDA’s earnings that are not eligible for taxation under the Italian tonnage tax regime will be taxed at an
effective tax rate of 4.8% in 2020 and 2019.
Substantially all of AIDA’s earnings are exempt from German income taxes by virtue of the Germany/Italy income tax treaty.
d. Asian Countries Income and Other Taxes
Substantially all of our brands’ income from their international operations in Asian countries is exempt from income tax by
virtue of relevant income tax treaties. In addition, the income is exempt from indirect taxes in China under relevant income tax
treaties and other circulars.
e. Other
In addition to or in place of income taxes, virtually all jurisdictions where our ships call impose taxes, fees and other charges
based on guest counts, ship tonnage, passenger capacity or some other measure.
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XVIII. Trademarks and Other Intellectual Property
We own, use and/or have registered or licensed numerous trademarks, patents and patent pending designs and technology,
copyrights and domain names, which have considerable value and some of which are widely recognized throughout the world.
These intangible assets enable us to distinguish our cruise products and services, ships and programs from those of our
competitors. We own or license the trademarks for the trade names of our cruise brands, each of which we believe is a widely-
recognized brand in the cruise industry, as well as our ship names and a wide variety of cruise products and services.
XIX. Competition
We compete with land-based vacation alternatives throughout the world, such as hotels, resorts (including all-inclusive resorts),
theme parks, organized tours, casinos, vacation ownership properties, and other internet-based alternative lodging sites. Based
on the 2019 G.P. Wild Cruise Industry Statistical Review, we, along with our principal cruise competitors Royal Caribbean
Group, Norwegian Cruise Line Holdings, Ltd. and MSC Cruises, carried approximately 83% of all global cruise guests.
D. Website Access to Carnival Corporation & plc SEC Reports
We use our websites as channels of distribution of company information. Our Form 10-K, joint Quarterly Reports on Form 10-
Q, joint Current Reports on Form 8-K, joint Proxy Statement related to our annual shareholders meeting, Section 16 filings and
all amendments to those reports are available free of charge at www.carnivalcorp.com and www.carnivalplc.com and on the
SEC’s website at www.sec.gov as soon as reasonably practicable after we have electronically filed or furnished these reports
with the SEC. In addition, you may automatically receive email alerts and other information when you enroll your email
address by visiting the Investor Services section of our websites. The content of any website referred to in this document is not
incorporated by reference into this document.
E. Industry and Market Data
This document includes market share and industry data and forecasts that we obtained from industry publications, third-party
surveys and internal company surveys. Industry publications, including those from CLIA, G.P. Wild, and surveys and forecasts,
generally state that the information contained therein has been obtained from sources believed to be reliable. CLIA is a non-
profit marketing and training organization formed in 1975 to promote cruising and offer support and training for the travel
agent community in North America. CLIA participates in the regulatory and policy development process while supporting
measures that foster a safe, secure and healthy cruise ship environment. In addition, CLIA facilitates strategic relationships
between cruise industry suppliers and organizations, cruise lines, ports and shipyards and provides a forum for interaction with
governmental agencies. All CLIA information, obtained from the CLIA website www.cruising.org, relates to the CLIA member
cruise lines. In 2019, CLIA represented over 50 cruise brands that operated more than 95% of cruise industry capacity. In 2020,
CLIA continues to represent the cruise industry. G.P Wild is an authoritative source of cruise industry statistics and publishes a
number of reports and industry reviews. All G.P. Wild information is obtained from their annual Cruise Industry Statistical
Review. All other references to third party information are publicly available at nominal or no cost. We use the most currently
available industry and market data to support statements as to our market positions. Although we believe that the industry
publications and third-party sources are reliable, we have not independently verified any of the data. Similarly, while we believe
our internal estimates with respect to our industry are reliable, they have not been verified by any independent sources. While
we are not aware of any misstatements regarding any industry data presented herein, our estimates, in particular as they relate to
market share and our general expectations, involve risks and uncertainties and are subject to change based on various factors,
including those discussed under Part I, Item 1A. Risk Factors and Exhibit 13, Management’s Discussion and Analysis of
Financial Condition and Results of Operations, in this Form 10-K.
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Item 1A. Risk Factors.
You should carefully consider the following discussion of material factors, events and uncertainties that make an investment in
the Company’s securities risky and provide important information for the understanding of the “forward-looking” statements
discussed in this Form 10-K and elsewhere. These risk factors should be read in conjunction with other information in this
Form 10-K.
The events and consequences discussed in these risk factors could have a material adverse effect on the Company’s business,
financial condition, operating results and stock price. These risk factors do not identify all risks that the Company faces;
operations could also be affected by factors, events, or uncertainties that are not presently known to the Company or that the
Company currently does not consider to present material risks to its operations. In addition, the current global economic climate
amplifies many of these risks. Some of the statements in this item and elsewhere in this document are “forward-looking
statements.” For a discussion of those statements and of other factors to consider see the “Cautionary Note Concerning Factors
That May Affect Future Results” section below.
The ordering and lettering of the risk factors set forth below is not intended to reflect any Company indication of priority or
likelihood.
COVID-19 and Liquidity/Debt Related Risk Factors
a. COVID-19 has had, and is expected to continue to have, a significant impact on our financial condition and operations,
which impacts our ability to obtain acceptable financing to fund resulting reductions in cash from operations. The current,
and uncertain future, impact of the COVID-19 outbreak, including its effect on the ability or desire of people to travel
(including on cruises), is expected to continue to impact our results, operations, outlooks, plans, goals, reputation, litigation,
cash flows, liquidity, and stock price.
The COVID-19 global pandemic is having material negative impacts on all aspects of our business. We implemented a pause of
our guest cruise operations in mid-March 2020 across all brands. Although we began the resumption of limited guest operations
in September 2020 with cruises by Costa and in October 2020 with cruises by AIDA, as of January 14, 2021, none of our ships
were operating with guests onboard. The pause with respect to these and other brands and ships may be prolonged. In addition,
we have been, and will continue to be negatively impacted by related developments, including heightened governmental
regulations, travel bans and travel advisories and restrictions and recommendations by the U.S. Department of State, the CDC
and other governmental authorities.
We incurred significant costs as we paused our guest cruise operations, provided air transportation to return our passengers to
their home destinations, repatriated shipboard team members and assisted some of our crew that were unable to return home
with food and housing. We will continue to incur COVID-19 related costs as we implement additional hygiene-related
protocols to our ships, as well as prepare for the continued resumption of guest operations. In addition, the industry is subject to
and may be further subject to enhanced health and hygiene requirements in attempts to counteract future outbreaks, and these
requirements may be costly and take a significant amount of time to implement across our global cruise operations. In October
2020, the CDC announced a framework for a phased resumption of cruise ship passenger operations in U.S. waters. The current
framework consists of several initial requirements that cruise ship operators such as us would need to follow prior to resuming
guest operations, including those relating to testing and additional safeguards for crew members and the development of
laboratory capacity needed to test future passengers. We are in the process of evaluating the CDC’s current framework and
believe there are a significant number of requirements that must be evaluated in the context of our plans to resume operations.
Further, the current framework is subject to additional technical instructions and orders from the CDC (including in connection
with subsequent phases for resumption, which are expected to include simulated voyages and certification requirements) that
are currently uncertain and will require further evaluation as we seek to resume operations. Implementing these initial and
subsequent requirements may result in an increase in cost and take time before the resumption of our guest operations.
Due to the outbreak of COVID-19 on some of our ships, and the resulting illness and loss of life in certain instances, we have
been the subject of negative publicity, which could have a long term impact on the appeal of our brands, which would diminish
demand for vacations on our vessels. We cannot predict how long the negative impact of media attention on our brands will
last, or the level of investment that will be required to address the concerns of potential travelers through marketing and pricing
actions.
We have received, and may continue to receive, lawsuits, other governmental investigations and other actions stemming from
COVID-19. We cannot predict the quantum or outcome of any such proceedings, some of which could result in the imposition
of civil and criminal penalties in the future, and the impact that they will have on our financial results, but any such impact may
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be material. We also remain subject to extensive, complex, and closely monitored obligations under the court-ordered
environmental compliance plan supervised by the U.S. District Court for the Southern District of Florida, as a result of the
previously disclosed settlement agreement relating to the violation of probation conditions for a plea agreement entered into by
Princess Cruises and the U.S. Department of Justice in 2016. We remain fully committed to satisfying those obligations.
We have insurance coverage for certain liabilities, costs and expenses related to COVID-19 through our participation in
Protection and Indemnity (“P&I”) clubs, including coverage for direct and incremental costs including, but not limited to,
certain quarantine expenses and for certain liabilities to passengers and crew. P&I clubs are mutual indemnity associations
owned by members. There is a $10 million deductible per occurrence (meaning per outbreak on a particular ship). We cannot
assure you that we will receive insurance proceeds that will compensate us fully for our liabilities, costs and expenses that
exceed the $10 million deductible under these policies. We have no insurance coverage for loss of revenues or earnings from
our ships or other operations.
In connection with our capacity optimization strategy, we have accelerated the removal of ships from our fleet in 2020 which
were previously expected to be sold over the ensuing years. We have sold, expect to sell or have agreements for the disposal of
various vessels. Some of these agreements for the disposal of vessels are for recycling. When we choose to dispose of a ship,
there can be no assurance that there will be a viable buyer to purchase it at a price that exceeds our net book value, which could
result in ship impairment charges and losses on ship disposals.
The effects of COVID-19 on the operations of shipyards where our ships are under construction will result in a delay in ship
deliveries.
We cannot predict the timing of our complete return to service and when various ports will reopen to our ships. If we are
delayed in recommencing guest cruise operations or there is a further pause in the resumption of limited guest operations, it
could further negatively impact our liquidity. As our business is seasonal, the impact of a delay or further pause in the
resumption of guest cruise operations will be heightened if such delay or pause occurs during the Northern Hemisphere summer
months. Moreover, even as travel advisories and restrictions are lifted, demand for cruises may remain weak for a significant
length of time and we cannot predict if and when each brand will return to pre-outbreak demand or fare pricing. In particular,
our bookings may be negatively impacted by the adverse changes in the perceived or actual economic climate, including higher
unemployment rates, declines in income levels and loss of personal wealth resulting from the impact of COVID-19. In addition,
we cannot predict the impact COVID-19 will have on our partners, such as travel agencies, suppliers and other vendors,
counterparties and joint ventures. We may be adversely impacted as a result of the adverse impact our partners, counterparties
and joint ventures suffer.
We have never previously experienced a complete cessation of our guest cruise operations, and as a consequence, our ability to
be predictive regarding the impact of such a cessation on our brands and future prospects is uncertain. In particular, we cannot
predict the impact on our financial performance and cash flows (including as required for cash refunds of deposits) as a result of
the current pause in our guest cruise operations, which may be prolonged, and the public’s concern regarding the health and
safety of travel, especially by cruise ship, and related decreases in demand for travel and cruising. Moreover, our ability to
attract and retain guests and our ability to hire and the amounts we must pay our crew depends, in part, upon the perception and
reputation of our company and our brands and the public’s concerns regarding the health and safety of travel generally, as well
as regarding the cruising industry and our ships specifically.
As a result of all of the foregoing, we have raised significant capital and expect to further raise additional capital, including
equity. Our access to and cost of financing depend on, among other things, global economic conditions, conditions in the global
financing markets, the availability of sufficient amounts of financing, our prospects and our credit ratings. As a result of
COVID-19's effects on our operations, Moody's and S&P Global have downgraded our credit ratings to be non investment
grade. If we are delayed in recommencing guest cruise operations or there is a further pause in the resumption of limited guest
operations, our credit ratings were to be further downgraded, or general market conditions were to ascribe higher risk to our
rating levels, our industry, or us, our access to capital and the cost of any debt or equity financing will be further negatively
impacted. In addition, the terms of future debt agreements could include more restrictive covenants, or require incremental
collateral, which may further restrict our business operations or be unavailable due to our covenant restrictions then in effect.
There is no guarantee that debt or equity financings will be available in the future to fund our obligations, or that they will be
available on terms consistent with our expectations. Additionally, the impact of COVID-19 on the financial markets may
adversely impact our ability to raise funds.
In addition, the COVID-19 outbreak has significantly increased economic and demand uncertainty. The current outbreak and
continued spread of COVID-19 has caused a global recession, which could have a further adverse impact on our financial
condition and operations. In past recessions, demand for our cruise vacations has been significantly negatively impacted which
has resulted in lower occupancy rates and adverse pricing, with a corresponding increase in the use of credits and other means
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to attract travelers. Significant increases in unemployment in the U.S. and other regions due to the adoption of physical
distancing and other policies to slow the spread of the virus have had, and are likely to continue to have, a negative impact on
booking demand for our guest cruise operations, and these impacts could exist for an extensive period of time.
The extent of the effects of the outbreak on our business and the cruising industry at large is highly uncertain and will
ultimately depend on future developments, including, but not limited to, the duration and severity of the outbreak, the length of
time it takes for demand and pricing to return and normal economic and operating conditions to resume. To the extent
COVID-19 adversely affects our business, operations, financial condition and operating results, it may also have the effect of
heightening many other risks.
b. Our substantial debt could adversely affect our financial health and operating flexibility.
We have a substantial amount of debt and significant debt service obligations. Our substantial debt could have important
negative consequences for us. Our substantial debt could:
• require us to dedicate a large portion of our cash flow from operations to service debt and fund repayments on our
debt, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general
corporate purposes;
• increase our vulnerability to adverse general economic or industry conditions;
• limit our flexibility in planning for, or reacting to, changes in our business or the industry in which we operate;
• place us at a competitive disadvantage compared to our competitors that have less debt;
• make us more vulnerable to downturns in our business, the economy or the industry in which we operate;
• limit our ability to raise additional debt or equity capital in the future to satisfy our requirements relating to working
capital, capital expenditures, development projects, strategic initiatives or other purposes;
• restrict us from making strategic acquisitions, introducing new technologies or exploiting business opportunities;
• make it difficult for us to satisfy our obligations with respect to our debt; and
• expose us to the risk of increased interest rates as certain of our borrowings are (and may be in the future) at a variable
rate of interest.
c. Despite our leverage, we may incur more debt, which could adversely affect our business and prevent us from fulfilling our
obligations with respect to our debt.
We may be able to incur substantial additional debt in the future. Although the instruments governing our existing indebtedness
contain restrictions on the incurrence of additional debt, these restrictions are subject to a number of significant qualifications
and exceptions, and under certain circumstances, the amount of debt that could be incurred in compliance with these restrictions
could be substantial and a portion of such debt currently is, and may in the future be, secured. The instruments governing our
existing indebtedness do not prevent us from incurring liabilities that do not constitute “Indebtedness” as defined therein. If new
debt is added to our existing debt levels, our business could be adversely affected, which may prevent us from fulfilling our
obligations with respect to our debt.
d. We are subject to restrictive debt covenants that may limit our ability to finance future operations and capital needs and to
pursue business opportunities and activities. In addition, if we fail to comply with any of these restrictions, it could have a
material adverse effect on the company.
Certain of our debt instruments limit our flexibility in operating our business. For example, some of our debt instruments limit
the ability of Carnival Corporation, Carnival plc and certain of their respective subsidiaries to, among other things:
• incur or guarantee additional indebtedness;
• pay dividends or distributions on, or redeem or repurchase capital stock and make other restricted payments;
• make certain investments;
• consummate certain asset sales;
• engage in certain transactions with affiliates;
• grant or assume certain liens; and
• consolidate, merge or transfer all or substantially all of our assets.
All of these limitations are subject to significant exceptions and qualifications. Despite these exceptions and qualifications, we
cannot assure you that the operating and financial restrictions and covenants in certain of our debt instruments will not
adversely affect our ability to finance our future operations or capital needs or engage in other business activities that may be in
our interest. Any future indebtedness may include similar or other restrictive terms.
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In addition, many of our debt agreements contain one or more financial covenants that require us to maintain a minimum debt
service coverage, maintain minimum shareholders equity and/or limit our debt to capital percentage. Our ability to comply with
our debt covenants, including the financial maintenance covenants described above, and restrictions may be affected by events
beyond our control, including prevailing economic, financial and industry conditions, such as the continued resumption of our
guest cruise operations and our ability to issue additional equity. If we breach any of these covenants or restrictions, we could
be in default under the terms of certain of our debt facilities and the relevant lenders could elect to declare the debt, together
with accrued and unpaid interest and other fees, if any, immediately due and payable and proceed against any collateral, if any,
securing that debt. If the debt under certain of our debt instruments that we enter into were to be accelerated, our assets may be
insufficient to repay in full our debt. Borrowings under other debt instruments that contain cross-default provisions also may be
accelerated or become payable on demand. In these circumstances, our assets may not be sufficient to repay in full our
indebtedness then outstanding.
e. We require a significant amount of cash to service our debt and sustain our operations. Our ability to generate cash depends
on many factors beyond our control, and we may not be able to generate cash required to service our debt.
Our ability to meet our debt service obligations or refinance our debt depends on our future operating and financial performance
and ability to generate cash. This will be affected by our ability to successfully implement our business strategy, as well as
general economic, financial, competitive, regulatory and other factors beyond our control, such as the disruption caused by the
COVID-19 pandemic. If we cannot generate sufficient cash to meet our debt service obligations or fund our other business
needs, we may, among other things, need to refinance all or a portion of our debt, obtain additional financing, delay planned
capital expenditures or sell assets. We cannot assure you that we will be able to generate sufficient cash through any of the
foregoing. If we are not able to refinance any of our debt, obtain additional financing or sell assets on commercially reasonable
terms or at all, we may not be able to satisfy our obligations with respect to our debt. Refer to "Liquidity, Financial Condition
and Capital Resources".
f. Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase
significantly.
Borrowings under certain of our facilities are at variable rates of interest and expose us to interest rate risk. If interest rates
increase, our debt service obligations on certain of our variable rate indebtedness will increase even though the amount
borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, will
correspondingly decrease.
In addition, in July 2017, the United Kingdom's Financial Conduct Authority, which regulates the London Interbank Offered
Rate (“LIBOR”), announced that it will no longer persuade or compel banks to submit LIBOR rates after 2021. It is unclear
whether or not, at that time, a satisfactory replacement rate will be developed or if new methods of calculating LIBOR will be
established such that it continues to exist after 2021. The U.S. Federal Reserve, in conjunction with the Alternative Reference
Rates Committee, a steering committee comprised of, among other entities, large U.S. financial institutions, is considering
replacing U.S. dollar LIBOR with a new index that measures the cost of borrowing cash overnight, backed by U.S. Treasury
securities (“SOFR”). SOFR is observed and backward-looking, which stands in contrast with LIBOR under the current
methodology, which is an estimated forward-looking rate and relies, to some degree, on the expert judgment of submitting
panel members. Whether or not SOFR or any other potential alternative reference rate attains market traction as a LIBOR
replacement rate remains in question. The consequences of these developments with respect to LIBOR cannot be entirely
predicted but may result in the level of interest payments on the portion of our indebtedness that bears interest at variable rates
to be affected, which may adversely impact the amount of our interest payments under such debt.
We have entered into, and in the future we will continue to enter into, interest rate swaps that involve the exchange of floating
for fixed-rate interest payments to reduce interest rate volatility. However, we may not maintain interest rate swaps with respect
to all of our variable rate indebtedness, and any such swaps may not fully mitigate our interest rate risk, may prove
disadvantageous, or may create additional risks.
g. As a result of the COVID-19 outbreak, we may be out of compliance with one or more maintenance covenants in certain of
our debt facilities, for which we currently have amendments for the period through November 30, 2021 with the next testing
date of February 28, 2022.
Under the terms of certain of our debt facilities, we are required to maintain a minimum debt service coverage ratio (EBITDA
to consolidated net interest charges for the most recently ended four fiscal quarters) of not less than 3.0 to 1.0 at the end of each
fiscal quarter (the “Financial Covenant”). We have entered into supplemental agreements to amend our bank loans to extend
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existing amendments with respect to compliance with the Financial Covenant and to amend the Revolving Facility to include
the Financial Covenant, in each case through the November 30, 2022 testing date and reduce the applicable covenant thresholds
thereafter to 2.0 to 1.0 for the February 28, 2023 and May 31, 2023 testing dates, and 2.5 to 1.0 for the August 31, 2023 and
November 30, 2023 testing dates, before reverting to 3.0 to 1.0 from the February 28, 2024 testing date onwards, or through
their respective maturity dates. We are in the process of negotiating similar amendment extensions and threshold amendments
under our funded export credit facilities (with aggregate indebtedness of $7.3 billion as of November 30, 2020) and our
unfunded export credit facilities (which had an aggregate principal amount of $8.0 billion as of November 30, 2020) as the
current amendments under such export credit facilities extend through November 30, 2021 or December 31, 2021, with the
testing under such facilities recommencing on the February 28, 2022 testing date. Even though we expect to obtain further
amendments under our export credit facilities with respect to the Financial Covenant (in particular in light of the additional debt
holiday amendments that have been introduced by the European export credit agencies), if such amendments are not obtained
we may not be in compliance with the Financial Covenant following November 30, 2021 with the next testing date of February
28, 2022 under our export credit facilities, or in future periods for certain agreements because of the pause and limited
resumptions of our guest operations.
In addition, under the terms of certain of our debt facilities, we are required to ensure that our debt as a percentage of capital
does not exceed 65% at the end of each fiscal quarter (the “Debt to Capital Covenant”). While we were in compliance with the
Debt to Capital Covenant as of November 30, 2020, we have entered into agreements to amend the Revolving Facility and the
agreements governing our bank loans to increase the Debt to Capital Covenant to 75% for each quarterly testing date from
November 30, 2021 to May 31, 2023, and thereafter declining ratably to 65% for the May 31, 2024 testing date and thereafter.
We are in the process of negotiating similar amendments to our funded export credit facilities (with aggregate indebtedness of
$7.3 billion as of November 30, 2020) and our unfunded export credit facilities (which had an aggregate principal amount of
$8.0 billion as of November 30, 2020) to obtain amendments under the Debt to Capital Covenant (compliance with which is
currently waived through November 30, 2021 or December 31, 2021, as applicable, with the next testing date of February 28,
2022). Even though we expect to obtain amendments under our export credit facilities with respect to the Debt to Capital
Covenant (in particular in light of the additional debt holiday amendments that have been introduced by the European export
credit agencies), if such amendments are not obtained we may be required to take certain actions, such as issuing additional
equity and/or reducing our indebtedness, failing which we may not be in compliance with the Debt to Capital Covenant as of
the February 28, 2022 testing date under our export credit facilities, or as of future testing dates for certain agreements, because
of the pause and limited resumptions of our guest operations.
The Financial Covenant and Debt to Capital Covenant amendments have led and may continue to lead to increased costs,
increased interest rates, additional restrictive covenants and other lender protections that are, or may become, applicable to us
under these debt facilities, and such increased costs, restrictions and modifications may vary among debt facilities. For example,
in connection with the amendments to the Revolving Facility and agreements governing our bank loans described above, we
have made certain changes to more closely align the financial covenants among the various facilities and agreements. In
addition, we have agreed to additional restrictive covenants in such facilities and agreements with respect to debt incurrence,
lien incurrence, restricted payments and investments that are substantially consistent with those contained in the indenture
governing the 2026 Senior Unsecured Notes. Our ability to provide additional lender protections under these facilities,
including the granting of security interests in certain collateral and the granting of guarantees with respect to certain outstanding
debt, will be limited by the terms of such agreements as amended, and our other debt facilities.
There can be no assurance that we will be able to obtain amendments in a timely manner, on acceptable terms or at all. If we
were not able to obtain the financial covenant amendments described above under any one or more of these debt facilities, we
would be in default of any such agreement. As a consequence, we would need to refinance or repay the applicable debt facility
or facilities, and would be required to raise additional debt or equity capital, or divest assets, to refinance or repay such facility
or facilities. If we were to be unable to obtain financial covenant amendments as may be required under any one or more of
these debt facilities, there can be no assurance that we would be able to raise sufficient debt or equity capital, or divest assets, to
refinance or repay such facility or facilities. With respect to each of the unfunded debt facilities, if we were unable to obtain
amendments under such debt facilities, the relevant lender under such facility could terminate that facility. With respect to each
of our funded debt facilities, if we were unable to obtain amendments or refinance or repay such debt facilities, it would lead to
an event of default under such facilities, which could lead to an acceleration of the indebtedness under such debt facilities. In
turn, this would lead to an event of default and potential acceleration of amounts due under all of our outstanding debt and
derivative contract payables. As a result, the failure to obtain the financial covenant amendments described above would have a
material adverse effect.
h. The covenants in certain of our debt facilities may require us to secure those facilities in the future.
Certain of our debt facilities contain provisions which may require that we provide a security interest in certain assets. In certain
of our debt facilities, there is a requirement that if the credit rating of our senior indebtedness should fall below investment
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grade (which occurred on June 24, 2020) and at such time we have granted liens or security interests in respect of indebtedness
in an amount exceeding 25% of our total assets (excluding for these purposes the value of any intangible assets) as shown in our
most recent Consolidated Balance Sheet, then we will be required to provide a first-priority security interest in certain
designated assets. In addition, under our export credit facilities, there is a requirement that if a security interest or lien is granted
in respect of a vessel to secure borrowed money under certain other debt facilities, then a first-priority security interest will be
required to be provided over certain designated vessels.
If the events described above were to occur, we may be unable to comply with this requirement and expect to seek covenant
amendments from the lenders under the relevant facilities. Any such amendment may lead to increased costs, increased interest
rates, additional restrictive covenants and other available lender protections that would be applicable to us under these debt
facilities, and such increased costs, restrictions and modifications may vary among debt facilities. Our ability to give additional
lender protections under these facilities, including the granting of security interests in collateral, will be limited by the
restrictions in our indebtedness and security interest we have already granted. If we were not able to obtain amendments, the
occurrence of such events may result in an event of default under these facilities and other debt facilities that contain cross
default provisions that would be triggered.
Operating Risk Factors
a. World events impacting the ability or desire of people to travel have and may continue to lead to a decline in demand for
cruises.
We have been and may continue to be impacted by the public’s concerns regarding the health, safety and security of travel,
including government travel advisories and travel restrictions, political instability and civil unrest, terrorist attacks and other
general concerns. Additionally, we have been and may continue to be impacted by heightened regulations around customs and
border control, travel bans to and from certain geographical areas, government policies increasing the difficulty of travel and
limitations on issuing international travel visas. We may also be impacted by adverse changes in the perceived or actual
economic climate, such as global or regional recessions, higher unemployment and underemployment rates and declines in
income levels. Furthermore, uncertainties resulting from the UK’s exit from the EU may impact our business.
b. Incidents concerning our ships, guests or the cruise vacation industry as well as adverse weather conditions and other
natural disasters have in the past and may, in the future, impact the satisfaction of our guests and crew and lead to
reputational damage.
Our operations involve the risk of incidents and media coverage thereof. Such incidents include, but are not limited to, the
improper operation or maintenance of ships, motorcoaches and trains; guest and crew illnesses; mechanical failures, fires and
collisions; repair delays, groundings and navigational errors; oil spills and other maritime and environmental issues as well as
other incidents at sea or while in port or on land which may cause guest and crew discomfort, injury, or death. Although our
commitment to the safety and comfort of our guests and crew is paramount to the success of our business, our ships have been
involved in outbreaks, accidents and other incidents in the past and we may experience similar or other incidents in the future.
Our ability to attract and retain guests and our ability to hire and the amounts we must pay our crew depend, in part, upon the
perception and reputation of our company and our brands and the public’s concerns regarding the health and safety of travel
generally, as well as regarding the cruising industry and our ships specifically.
Our cruise ships, hotels, land tours, port and related commercial facilities and shore excursions may be impacted by adverse
weather patterns or other natural disasters, such as hurricanes, earthquakes, floods, fires, tornadoes, tsunamis, typhoons and
volcanic eruptions. It is possible that we could be forced to alter itineraries or cancel a cruise or a series of cruises or tours due
to these or other types of disruptions. Changes in climate may increase the frequency and intensity of adverse weather patterns,
make certain destinations less desirable or impact our business in other ways. In addition, these and any other events which
impact the travel industry more generally may negatively impact our guests’ or crew’s ability or desire to travel to or from our
ships and/or interrupt the supply of critical goods and services.
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-corruption, economic sanctions, trade protection and tax
have in the past and may, in the future, lead to litigation, enforcement actions, fines, penalties, and reputational damage.
We are subject to numerous international, national, state and local laws, regulations, treaties and other legal requirements that
govern health, environmental, safety and security matters in relation to our guests, crew and ships. These requirements change
regularly, sometimes on a daily basis, depending on the itineraries of our ships and the ports and countries visited.
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Implementing these and any subsequent requirements may be costly and take time to implement across our global cruise
operations. If we violate or fail to comply with any of these laws, regulations, treaties and other requirements we could be, and
have previously been, fined or otherwise sanctioned by regulators. In addition, there is increased global focus on climate
change, which may lead to additional regulatory requirements. We are subject to a court-ordered environmental compliance
plan supervised by the U.S. District Court for the Southern District of Florida, which is operative until April 2022 and subjects
our operations to additional review and other obligations. Failure to comply with the requirements of this environmental
compliance plan or other special conditions of probation could result in fines, which the court has imposed in the past, and
restrictions on our operations.
We are subject to laws and requirements related to the treatment and protection of personal, sensitive and/or other regulated
data in the jurisdictions where we operate. Various governments, agencies and regulatory organizations have enacted or are
considering new rules and regulations. In the course of doing business, we collect guest, employee, company and other third-
party data, including personally identifiable information and other sensitive data.
Our operations subject us to potential liability under anti-corruption laws and regulations. We may also be affected by economic
sanctions, trade protection laws, policies and other regulatory requirements affecting trade and investment.
We are subject to compliance with tax laws, regulations and treaties in the jurisdictions in which we are incorporated or operate.
These tax laws, regulations and treaties are subject to change at any time, which may result in substantially higher tax liabilities.
Additionally, the relevant authorities’ interpretation of tax laws, regulations and treaties could differ materially from ours.
d. Breaches in data security and lapses in data privacy as well as disruptions and other damages to our principal offices,
information technology operations and system networks, including the recent ransomware incidents, and failure to keep pace
with developments in technology may adversely impact our business operations, the satisfaction of our guests and crew and
may lead to reputational damage.
We have and may continue to be impacted by breaches in data security and lapses in data privacy, which occur from time to
time. These can vary in scope and intent from motivated driven attacks to malicious attacks intended to disrupt or compromise
our shoreside and shipboard operations by targeting our key operating systems. Breach or circumvention of our systems or the
systems of third parties, including by ransomware or other attacks, results in disruptions to our business operations;
unauthorized access to (or the loss of company access to) competitively sensitive, confidential or other critical data (including
sensitive financial, medical or other personal or business information) or systems; loss of customers; financial losses; regulatory
investigations, enforcement actions and fines; litigation and misuse or corruption of critical data and proprietary information,
any of which could be material.
On August 15, 2020, we detected a ransomware attack and unauthorized access to our information technology systems. We
engaged a major cybersecurity firm to investigate the matter and notified law enforcement and applicable regulators of the
incident. The incident investigation and remediation phases are complete and we have moved to the communication and
reporting phases. We determined that the unauthorized third-party gained access to certain personal information relating to
some guests, employees and crew for some of our operations. There is currently no indication of any misuse of this information
and we have no reason to believe that the information from this attack will be misused going forward.
On December 25, 2020, we detected a ransomware attack and unauthorized access to our information technology systems
affecting two of our brands. We engaged a major cybersecurity firm to investigate the matter and notified law enforcement and
applicable regulators of the incident. The incident investigation and remediation phases are in process, but at this time there is
currently no indication of any misuse of information.
While at this time we do not believe that these incidents will have a material adverse effect on our business, operations or
financial results, no assurances can be given and we may be subject to future attacks or incidents that could have such a material
adverse effect.
Our principal offices, information technology operations, system networks and various remote work locations may be impacted
by actual or threatened natural disasters (for example, hurricanes, earthquakes, floods, fires, tornadoes, tsunamis, typhoons and
volcanic eruptions) or other disruptive events. Our maritime and/or shoreside operations, including our ability to manage our
inventory of cabins held for sale and set pricing, control costs, and serve our guests, depends on the reliability of our
information technology operations and system networks as well as our ability to refine and update to more advanced systems
and technologies.
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e. Ability to recruit, develop and retain qualified shipboard personnel who live away from home for extended periods of time
may adversely impact our business operations, guest services and satisfaction.
We hire a significant number of qualified shipboard personnel each year and, thus, our ability to adequately recruit, develop and
retain these individuals is critical to our success. Incidents involving cruise ships, including COVID-19 outbreaks on our ships,
and the related adverse media publicity, adverse economic conditions that negatively affect our profitability and increasing
demand as a result of the industry’s projected growth could negatively impact our ability to recruit, develop and retain sufficient
qualified shipboard personnel.
f. 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 may be impacted, and have been impacted in the past, by economic, market and political conditions around the world, such
as fuel demand, regulatory requirements, supply disruptions and related infrastructure needs, which make it difficult to predict
the future price and availability of fuel. Future increases in the global price of fuel would increase the cost of our cruise ship
operations as well as some of our other expenses, such as crew travel, freight and commodity prices. Increases in airfares,
which could result from increases in the price of fuel, would increase our guests’ overall vacation costs as many of our guests
depend on airlines to transport them to or from the airports near the ports where our cruises embark and disembark.
As a result of changes in regulations, we consumed a larger percentage of low sulfur fuel in 2020, which will likely increase our
fuel costs upon resumption of guest cruise operations. Additionally, certain of our ships are designed to use LNG as their
primary fuel source. At this time, the marine LNG distribution infrastructure is in the early stages of development with a limited
number of suppliers.
g. Fluctuations in foreign currency exchange rates may adversely impact our financial results.
We earn revenues, pay expenses, purchase and own assets and incur liabilities in currencies other than the U.S. dollar.
Additionally, our shipbuilding contracts are typically denominated in euros. Movements in foreign currency exchange rates will
affect our financial results.
h. Overcapacity and competition in the cruise and land-based vacation industry may lead to a decline in our cruise sales,
pricing and destination options.
We may be impacted by increases in capacity in the cruise and land-based vacation industry, which may result in capacity
growth beyond demand, either globally or for a region, or for a particular itinerary. We face competition from other cruise
brands on the basis of overall experience, destinations, types and sizes of ships and cabins, travel agent preferences and value.
In addition, we compete with land-based vacation alternatives throughout the world on the basis of overall experience,
destinations and value.
i. 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 may be impacted by unforeseen events, such as work stoppages, insolvencies, “force majeure” events or other financial
difficulties experienced by shipyards, their subcontractors and our suppliers. This may result in less shipyard availability
resulting in delays or preventing the delivery of our ships under construction and/or the completion of the repair, maintenance,
or refurbishment of our existing ships. This may lead to potential delays or cancellations of cruises. In addition, the prices of
various commodities that are used in the construction of ships and for repair, maintenance and refurbishment of existing ships,
such as steel, are subject to volatility.
Cautionary Note Concerning Factors That May Affect Future Results
Some of the statements, estimates or projections contained in this document are “forward-looking statements” that involve
risks, uncertainties and assumptions with respect to us, including some statements concerning future results, operations,
outlooks, plans, goals, reputation, cash flows, liquidity and other events which have not yet occurred. These statements are
intended to qualify for the safe harbors from liability provided by Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. 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,”
35
“expect,” “goal,” “anticipate,” “forecast,” “project,” “future,” “intend,” “plan,” “estimate,” “target,” “indicate,” “outlook,” and
similar expressions of future intent or the negative of such terms.
Forward-looking statements include those statements that relate to our outlook and financial position including, but not limited
to, statements regarding:
• Pricing • Estimates of ship depreciable lives and residual values
• Booking levels • Goodwill, ship and trademark fair values
• Occupancy • Liquidity and credit ratings
• Interest, tax and fuel expenses • Adjusted earnings per share
• Currency exchange rates • Impact of the COVID-19 coronavirus global pandemic
on our financial condition and results of operations
Certain of the risks we are exposed to are identified in this Item 1A. “Risk Factors.” This item contains important cautionary
statements and a discussion of the known factors that we consider could materially affect the accuracy of our forward-looking
statements and adversely affect our business, results of operations and financial position. Additionally, many of these risks and
uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the
COVID-19 outbreak. It is not possible to predict or identify all such risks. 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.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
As of November 30, 2020, the Carnival Corporation and Carnival plc headquarters and our larger shoreside locations are as
follows:
Square Footage
Location (in thousands) Own/Lease Principal Operations
Miami, FL, U.S.A. 463/61 Own/Lease Carnival Corporation and Carnival Cruise Line
Genoa, Italy 246/66 Own/Lease Costa and AIDA
Santa Clarita, CA, U.S.A. 311 Lease Princess Cruises, Holland America Line and
Seabourn
Almere, Netherlands 253 Own Arison Maritime Center
Rostock, Germany 224 Own Costa and AIDA
Seattle, WA, U.S.A. 175 Lease Princess Cruises, Holland America Line and
Seabourn
Southampton, England 150 Lease Carnival plc, P&O Cruises (UK) and Cunard
Hamburg, Germany 171 Lease Costa and AIDA
Sydney, NSW, Australia 37 Lease Princess Cruises and P&O Cruises (Australia)
Shanghai, China 19 Lease Costa
Information about our cruise ships, including the number each of our cruise brands operate, as well as information regarding
our cruise ships under construction may be found under Part I. Item 1. Business. C. “Our Global Cruise Business.” In addition,
we own, lease or have controlling interests in port destinations, private islands, hotels, and lodges.
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Item 3. Legal Proceedings.
The following represents environmental legal proceedings with potential monetary sanctions of $1 million or more.
As previously disclosed, on May 19, 2017, Holland America Line and Princess Cruises notified the National Oceanic and
Atmospheric Administration (“NOAA”) regarding discharges made by certain vessels in the recently expanded area of the
National Marine Sanctuary in the Farallones Island. On February 7, 2020, Carnival Corporation received an assessment for a
civil penalty of $1.4 million for these discharges. The parties are negotiating a final settlement.
In addition to the proceeding described above, the legal proceedings described in Note 7 – “Contingencies”, including those
described under “COVID-19 Actions,” are shown in Exhibit 13 and are incorporated by reference into this Form 10-K.
Item 4. Mine Safety Disclosures.
None.
PART II
Item 5. Market for Registrants’ Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities.
A. Market Information
The information required by Item 201(a) of Regulation S-K, Market Information, is shown in Exhibit 13 and is incorporated by
reference into this Form 10-K.
B. Holders
The information required by Item 201(b) of Regulation S-K, Holders, is shown in Exhibit 13 and is incorporated by reference
into this Form 10-K.
C. Dividends
On March 30, 2020, we suspended the payment of dividends on the common stock of Carnival Corporation and the ordinary
shares of Carnival plc.
D. Securities Authorized for Issuance under Equity Compensation Plans
The information required by Item 201(d) of Regulation S-K is incorporated by reference to Part III. Item 12 of this Form 10-K.
E. Performance Graph
The information required by Item 201(e) of Regulation S-K, Performance Graph, is shown in Exhibit 13 and is incorporated by
reference into this Form 10-K.
F. Issuer Purchases of Equity Securities; Use of Proceeds from Registered Securities
I. Repurchase Program
Under a share repurchase program effective 2004, we had been authorized to repurchase Carnival Corporation common stock
and Carnival plc ordinary shares (the “Repurchase Program”). On June 15, 2020, to enhance our liquidity and comply with
restrictions in our recent financing transactions, the Boards of Directors terminated the Repurchase Program.
37
During the three months ended November 30, 2020, no shares of Carnival Corporation common stock or Carnival plc ordinary
shares were repurchased pursuant to the Repurchase Program. No shares of Carnival Corporation common stock or Carnival plc
ordinary shares were purchased outside of publicly announced plans or programs.
II. Carnival plc Shareholder Approvals
Carnival plc ordinary share repurchases under the Repurchase Program require annual shareholder approval. The existing
shareholder approval was limited to a maximum of 18.2 million ordinary shares and is valid until the earlier of the conclusion
of the Carnival plc 2021 annual general meeting or October 5, 2021. To enhance our liquidity as well as comply with the
restrictions in our recent financing transactions, we terminated the Repurchase Program.
Item 6. Selected Financial Data.
The information required by Item 6. Selected Financial Data, is shown in Exhibit 13 and is incorporated by reference into this
Form 10-K.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The information required by Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,
is shown in Exhibit 13 and is incorporated by reference into this Form 10-K.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
The information required by Item 7A. Quantitative and Qualitative Disclosures About Market Risk, is shown in Management’s
Discussion and Analysis of Financial Condition and Results of Operations in Exhibit 13 and is incorporated by reference into
this Form 10-K.
Item 8. Financial Statements and Supplementary Data.
The financial statements, together with the report thereon of PricewaterhouseCoopers LLP, dated January 26, 2021, and the
Selected Quarterly Financial Data (Unaudited) are shown in Exhibit 13 and are incorporated by reference into this Form 10-K.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. 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 President and Chief Executive Officer and our Chief Financial Officer and Chief Accounting Officer have evaluated our
disclosure controls and procedures and have concluded, as of November 30, 2020, that they are effective as described above.
B. Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term
is defined in the Securities Exchange Act of 1934 Rule 13a-15(f). Our management, with the participation of our President and
Chief Executive Officer and our Chief Financial Officer and Chief Accounting Officer, conducted an evaluation of the
effectiveness of our internal control over financial reporting based on the 2013 Internal Control – Integrated Framework (the
38
“COSO Framework”). Based on this evaluation under the COSO Framework, our management concluded that our internal
control over financial reporting was effective as of November 30, 2020.
PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited our consolidated financial
statements incorporated in this Form 10-K, has also audited the effectiveness of our internal control over financial reporting as
of November 30, 2020 as stated in their report, which is shown in Exhibit 13 and is incorporated by reference into this Form 10-
K.
C. Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the quarter ended November 30, 2020 that
have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
Item 9B. Other Information.
None.
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Directors
Information regarding our directors, as required by Item 10, is incorporated herein by reference from the Carnival Corporation
and Carnival plc joint definitive Proxy Statement to be filed with the U.S. Securities and Exchange Commission not later than
120 days after the close of the 2020 fiscal year.
Information About Our Executive Officers
The table below sets forth the name, age, years of service and title of each of our executive officers. Titles listed relate to
positions within Carnival Corporation and Carnival plc unless otherwise noted.
Years of
Age Service (a) Title
Peter C. Anderson 57 1 Chief Ethics and Compliance Officer
Micky Arison 71 49 Chairman of the Boards of Directors
David Bernstein 63 22 Chief Financial Officer and Chief Accounting Officer
Arnold W. Donald 66 20 President and Chief Executive Officer and Director
Arnaldo Perez 60 28 General Counsel and Secretary
Michael Thamm 57 27 Group Chief Executive Officer of Costa Group and Carnival Asia
(a) Years of service with us or Carnival plc predecessor companies.
Business Experience of Executive Officers
Peter C. Anderson has been Chief Ethics and Compliance Officer since 2019. Prior to joining us, he was a Shareholder at the
law firm of Beveridge & Diamond, PC from 2012 to 2019.
Micky Arison has been Chairman of the Boards of Directors since 1990 and a Director since 1987. He was Chief Executive
Officer from 1979 to 2013.
David Bernstein has been Chief Financial Officer since 2007 and Chief Accounting Officer since 2016.
Arnold W. Donald has been President and Chief Executive Officer since 2013. He has been a Director since 2001.
Arnaldo Perez has been General Counsel and Secretary since 1995.
39
Michael Thamm has been Group Chief Executive Officer of Costa Group since 2012 and of Carnival Asia since 2017.
Corporate Governance
We have adopted a Code of Business Conduct and Ethics that applies to our President and Chief Executive Officer and senior
financial officers, including the Chief Financial Officer and Chief Accounting Officer and other persons performing similar
functions. Our Code of Business Conduct and Ethics applies to all our other employees and to our directors as well. This Code
of Business Conduct and Ethics is posted on our website, which is located at www.carnivalcorp.com and www.carnivalplc.com.
We intend to satisfy the disclosure requirement under Item 5.05 of the Form 8-K regarding any amendments to, or waivers
from, provisions of this Code of Business Conduct and Ethics by posting such information on our website, at the addresses
specified above.
The additional information required by Item 10 is incorporated herein by reference from the Carnival Corporation and Carnival
plc joint definitive Proxy Statement to be filed with the U.S. Securities and Exchange Commission not later than 120 days after
the close of the 2020 fiscal year.
Item 11. Executive Compensation.
The information required by Item 11 is incorporated herein by reference from the Carnival Corporation and Carnival plc joint
definitive Proxy Statement to be filed with the U.S. Securities and Exchange Commission not later than 120 days after the close
of the 2020 fiscal year.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
A. Securities Authorized for Issuance under Equity Compensation Plans
I. Carnival Corporation
Set forth below is a table that summarizes compensation plans (including individual compensation arrangements) under which
Carnival Corporation equity securities are authorized for issuance as of November 30, 2020.
Number of securities remaining
available for future issuance
Number of securities to Weighted-average under equity compensation
be issued upon exercise exercise price of plans (excluding securities
of warrants and rights outstanding warrants reflected in column (1))
Plan category (in millions) and rights (in millions)
(1)
Equity compensation plans
approved by security holders 7.5 (a) - 8.5 (b)
Equity compensation plans not
approved by security holders — - —
7.5 - 8.5
(a) Represents 7.5 million of restricted share units outstanding under the Carnival Corporation 2011 Stock Plan and Carnival
Corporation 2020 Stock Plan.
(b) Includes Carnival Corporation common stock available for issuance as of November 30, 2020 as follows: $1.7 million
under the Carnival Corporation Employee Stock Purchase Plan, which includes 89,396 shares subject to purchase during
the current purchase period and 7.5 million under the Carnival Corporation 2020 Stock Plan.
40
II. Carnival plc
Set forth below is a table that summarizes compensation plans (including individual compensation arrangements) under which
Carnival plc equity securities are authorized for issuance as of November 30, 2020.
Number of securities remaining
available for future issuance under
Number of securities to Weighted-average equity compensation plans
be issued upon exercise exercise price of (excluding securities reflected in
of warrants and rights outstanding warrants column (1))
Plan category (in millions) and rights (in millions)
(1)
Equity compensation plans approved by
security holders 2.7 (a) - 4.4
Equity compensation plans not
approved by security holders — - —
2.7 - 4.4
(a) Represents 2.7 million restricted share units outstanding under the Carnival plc 2014 Employee Share Plan.
The additional information required by Item 12 is incorporated herein by reference to the Carnival Corporation and Carnival plc
joint definitive Proxy Statement to be filed with the U.S. Securities and Exchange Commission not later than 120 days after the
close of the 2020 fiscal year.
Items 13 and 14. Certain Relationships and Related Transactions, and Director Independence and Principal
Accountant Fees and Services.
The information required by Items 13 and 14 is incorporated herein by reference from the Carnival Corporation and Carnival
plc joint definitive Proxy Statement to be filed with the U.S. Securities and Exchange Commission not later than 120 days after
the close of the 2020 fiscal year.
PART IV
Item 15. Exhibits and Financial Statement Schedules.
(a) (1) Financial Statements
The financial statements shown in Exhibit 13 are incorporated herein by reference into this Form 10-K.
(2) Financial Statement Schedules
All schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related
instruction or are inapplicable and, therefore, have been omitted.
(3) Exhibits
The exhibits listed below on the Index to Exhibits are filed or incorporated by reference as part of this Form 10-K.
41
INDEX TO EXHIBITS
Incorporated by Reference
Exhibit Filing Filed
Number Exhibit Description Form Exhibit Date Herewith
Articles of incorporation and by-laws
3.1 Third Amended and Restated Articles of Incorporation
of Carnival Corporation. 8-K 3.1 4/17/03
3.2 Third Amended and Restated By-Laws of Carnival
Corporation. 8-K 3.1 4/20/09
3.3 Articles of Association of Carnival plc. 8-K 3.3 4/20/09
Instruments defining the rights of security holders, including indenture
4.1 Agreement of Carnival Corporation and Carnival plc,
dated January 18, 2021 to furnish certain debt
instruments to the Securities and Exchange
Commission. X
4.2 Carnival Corporation Deed, dated April 17, 2003,
between Carnival Corporation and P&O Princess
Cruises plc for the benefit of the P&O Princess Cruises
Shareholders. 10-Q 4.1 10/15/03
4.3 Equalization and Governance Agreement, dated April
17, 2003, between Carnival Corporation and P&O
Princess Cruises plc. 10-Q 4.2 10/15/03
4.4 Carnival Corporation Deed of Guarantee, dated as of
April 17, 2003, between Carnival Corporation and
Carnival plc. S-4 4.3 5/30/03
4.5 Carnival plc Deed of Guarantee, dated as of April 17,
2003, between Carnival Corporation and Carnival plc. S-3 & F-3 4.10 6/19/03
4.6 Specimen Carnival Corporation Common Stock
Certificate. S-3 & F-3 4.16 6/19/03
4.7 Pairing Agreement, dated as of April 17, 2003, between
Carnival Corporation, The Law Debenture Trust
Corporation (Cayman) Limited, as trustee, and
Computershare Investor Services (formerly SunTrust
Bank), as transfer agent. 8-K 4.1 4/17/03
4.8 Voting Trust Deed, dated as of April 17, 2003, between
Carnival Corporation and The Law Debenture Trust
Corporation (Cayman) Limited, as trustee. 8-K 4.2 4/17/03
4.9 SVE Special Voting Deed, dated as of April 17, 2003,
between Carnival Corporation, DLS SVC Limited, P&O
Princess Cruises plc, The Law Debenture Trust
Corporation (Cayman) Limited, as trustee, and The Law
Debenture Trust Corporation, P.L.C. 8-K 4.3 4/17/03
42
INDEX TO EXHIBITS
Incorporated by Reference
Exhibit Filing Filed
Number Exhibit Description Form Exhibit Date Herewith
4.10 Form of Amended and Restated Deposit Agreement and Post
holders from time to time of receipts issued thereunder. Amend-
ment to
Form F-6 99-a 4/15/03
4.11 Specimen Carnival plc Ordinary Share Certificate. S-3 4.1 7/2/09
4.12 Description of Equity Securities Registered under
Section 12 of the Exchange Act. 10-K 4.12 1/28/20
4.13 Description of 1.625% Senior Notes Due 2021.
10-K 4.13 1/28/20
4.14 Description of 1.875% Senior Notes Due 2022.
10-K 4.14 1/28/20
4.15 Description of 1.000% Senior Notes Due 2029.
10-K 4.15 1/28/20
Material contracts
10.1* Carnival Corporation Nonqualified Retirement Plan for
Highly Compensated Employees. 10-Q 10.1 9/28/07
10.2* Form of Appointment Letter for Non-Executive
Directors. 10-Q 10.1 6/27/08
10.3* Form of Appointment Letter for Executive Directors. 10-Q 10.2 6/27/08
10.4 Succession Agreement, dated as of May 28, 2002, to
Registration Rights Agreement, dated June 14, 1991,
between Carnival Corporation and Ted Arison
(incorporated by reference to Exhibit 10.2 of Carnival
Corporation’s Quarterly Report on Form 10-Q for the
period ended May 31, 2002).
10-Q 10.2 7/12/02
10.5* Amended and Restated Carnival Corporation 2011
Stock Plan. 10-K 10.23 1/30/17
10.6* Employment Agreement dated as of October 14, 2013
between Carnival Corporation, Carnival plc and Arnold
W. Donald. 10-Q 10.2 10/3/14
10.7* Amended and Restated Carnival plc 2014 Employee
Share Plan. 10-K 10.39 1/30/17
10.8* Carnival Corporation & plc Management Incentive Plan
(adopted in 2015). 10-Q 10.3 7/1/15
43
INDEX TO EXHIBITS
Incorporated by Reference
Exhibit Filing Filed
Number Exhibit Description Form Exhibit Date Herewith
10.9* Amendment to Facilities Agreement dated May 18,
2016 among Carnival Corporation, Carnival plc and
certain of Carnival Corporation and Carnival plc
subsidiaries, Bank of America Merrill Lynch
International Limited, as facilities agent, and KfW
IPEX-Bank GmbH, Bayerische Landesbank, New York
Branch and DZ BANK AG, Deutsche Zentral
Genossenschaftsbank, Frankfurt am Main, New York
Branch, as new lenders. 10-Q 10.1 7/1/16
10.10* Amendment dated October 18, 2016 to Employment
Agreement dated October 14, 2016 between Carnival
Corporation, Carnival plc and Arnold W. Donald. 8-K 99.1 10/21/16
10.11* Form of Management Incentive Plan Tied Restricted
Stock Unit Agreement for the Carnival Corporation
2011 Stock Plan. 10-Q 10.1 3/30/17
10.12* Form of Management Incentive Plan Tied Restricted
Share Unit Agreement for the Carnival plc 2014
Employee Share Plan. 10-Q 10.2 3/30/17
10.13* Form of Shareholder Equity Alignment Restricted Stock
Unit Agreement for the Carnival Corporation 2011
Stock Plan. 10-Q 10.3 3/30/17
10.14* Employment Contract dated April 21, 2017 between
Carnival plc and Michael Olaf Thamm. 8-K 10.1 4/27/17
10.15* Form of Non-Employee Director Restricted Stock
Award Agreement for the Carnival Corporation 2011
Stock Plan. 10-Q 10.2 6/30/17
10.16* Form of Performance-Based Restricted Share Unit
Agreement for the Carnival Corporation 2011 Stock
Plan. 10-Q 10.3 6/30/17
10.17* Form of Performance-Based Restricted Share Unit
Agreement for the Carnival plc 2014 Employee Share
Plan. 10-Q 10.4 6/30/17
10.18* Form of Management Incentive Plan Tied Restricted
Stock Unit Agreement for the Carnival Corporation
2011 Stock Plan. 10-Q 10.1 3/22/18
10.19* Form of Management Incentive Plan Tied Restricted
Share Unit Agreement for the Carnival plc 2014
Employee Share Plan. 10-Q 10.2 3/22/18
10.20* Form of Performance-Based Restricted Stock Unit
Agreement for the Carnival Corporation 2011 Stock
Plan. 10-Q 10.3 3/22/18
44
INDEX TO EXHIBITS
Incorporated by Reference
Exhibit Filing Filed
Number Exhibit Description Form Exhibit Date Herewith
10.21* Form of Performance-Based Restricted Share Unit
Agreement for the Carnival plc 2014 Employee Share
Plan. 10-Q 10.4 3/22/18
10.22* Form of Shareholder Equity Alignment Restricted Stock
Unit Agreement for the Carnival Corporation 2011
Stock Plan. 10-Q 10.1 6/25/18
10.23* Form of Non-Employee Director Restricted Stock
Award Agreement for the Carnival Corporation 2011
Stock Plan. 10-Q 10.2 6/25/18
10.24* Form of Management Incentive Plan Tied Restricted
Stock Unit Agreement for the Carnival Corporation
2011 Stock Plan 10-Q 10.1 4/9/19
10.25* Form of Management Incentive Plan Tied Restricted
Share Unit Agreement for the Carnival plc 2014
Employee Share Plan 10-Q 10.2 4/9/19
10.26* Form of Performance-Based Restricted Stock Unit
Agreement for the Carnival Corporation 2011 Stock
Plan 10-Q 10.3 4/9/19
10.27* Form of Performance-Based Restricted Share Unit
Agreement for the Carnival plc 2014 Employee Share
Plan 10-Q 10.4 4/9/19
10.28* Form of Shareholder Equity Alignment Restricted Stock
Unit Agreement for the Carnival Corporation 2011
Stock Plan 10-Q 10.5 4/9/19
10.29* Amended and Restated Carnival Corporation 2011
Stock Plan 10-Q 10.1 6/24/19
10.30* Amended and Restated Carnival plc 2014 Employee
Share Plan 10-Q 10.2 6/24/19
10.31* Form of Non-Employee Director Restricted Stock
Award Agreement for the Carnival Corporation 2011
Stock Plan 10-Q 10.3 6/24/19
10.32* Amendment and Restatement Agreement dated August
6, 2019 in respect of the Multicurrency Revolving
Facilities Agreement dated May 18, 2011, among
Carnival Corporation, Carnival plc and certain of
Carnival Corporation and Carnival plc subsidiaries,
Bank of America Merrill Lynch International
Designated Activity Company as facilities agent and a
syndicate of financial institutions 10-Q 10.1 9/26/19
10.33*
Form of Management Incentive Tied Restricted Stock
Unit Agreement for the Carnival Corporation 2011
Stock Plan
10-Q 10.1 4/1/20
45
INDEX TO EXHIBITS
Incorporated by Reference
Exhibit Filing Filed
Number Exhibit Description Form Exhibit Date Herewith
10.34*
Form of Management Incentive Tied Restricted Share
Unit Agreement for the Carnival plc 2014 Employee
Share Plan
10-Q 10.2 4/1/20
10.35*
Form of Shareholder Equity Alignment Restricted Stock
Unit Agreement for the Carnival Corporation 2011
Stock Plan
10-Q 10.3 4/1/20
10.36* Form of Salary for Shares Restricted Stock Unit
Agreement for the Carnival Corporation 2020 Stock
Plan 10-Q 10.1 7/10/20
10.37* Form of Salary for Shares Restricted Share Unit
Agreement for the Carnival plc 2014 Employee Share
Plan 10-Q 10.2 7/10/20
10.38* Form of Non-Employee Director Annual Restricted
Stock Award Agreement for the for the Carnival
Corporation 2020 Stock Plan 10-Q 10.3 7/10/20
10.39* Form of Non-Employee Director Shares for Retainer
Restricted Stock Grants Agreement for the for the
Carnival Corporation 2020 Stock Plan 10-Q 10.4 7/10/20
10.40* Carnival Corporation 2020 Stock Plan 10-Q 10.5 7/10/20
10.41*** Term Loan Agreement dated as of June 30, 2020 among
Carnival Finance, LLC and Carnival Corporation, as
borrowers, Carnival plc and the other Guarantors party
hereto, the various financial institutions as are or shall
become parties hereto, JPMorgan Chase Bank, N.A., as
administrative agent for the lenders, and U.S. Bank
National Association, as security agent 10-Q 10.6 7/10/20
10.42 Amendment No. 1, dated as of December 3, 2020 to
Term Loan Agreement dated as of June 30, 2020 among
Carnival Finance, LLC and Carnival Corporation, as
borrowers, Carnival plc and the other Guarantors party
hereto, the various financial institutions as are or shall
become parties hereto, JPMorgan Chase Bank, N.A., as
administrative agent for the lenders, and U.S. Bank
X
10.43 Indenture, dated as of April 6, 2020, among Carnival
Corporation, as issuer, Carnival plc, the other
Guarantors party thereto and U.S. Bank National
Association, as trustee, relating to the 5.75%
Convertible Senior Notes due 2023 10-Q 10.7 7/10/20
10.44 First Supplemental Indenture dated as of June 30, 2020
among Carnival Corporation as issuer, Carnival plc, the
other Guarantors party thereto and U.S. Bank, National
Association, as trustee, relating to the 5.75%
Convertible Senior Notes due 2023 10-Q 10.9 7/10/20
46
INDEX TO EXHIBITS
Incorporated by Reference
Exhibit Filing Filed
Number Exhibit Description Form Exhibit Date Herewith
10.45 Second Supplemental Indenture dated as of July 8, 2020
among Carnival Corporation as issuer, Carnival plc, the
other Guarantors party thereto and U.S. Bank, National
Association, as trustee, relating to the 5.75%
Convertible Senior Notes due 2023 10-Q 10.1 10/8/20
10.46*** Indenture, dated as of April 8, 2020, among Carnival
Corporation, as issuer, Carnival plc, the other
Guarantors party thereto and U.S. Bank National
Association, as trustee, principal paying agent, transfer
agent, registrar and security agent, relating to the
11.500% First-Priority Senior Secured Notes due 2023
10-Q 10.8 7/10/20
10.47 First Supplemental Indenture dated as of November 18,
2020 among Carnival Corporation as issuer, Carnival
plc, the other Guarantors party thereto and U.S. Bank,
National Association, as trustee and security agent,
relating to the 11.500% First-Priority Senior Secured
Notes due 2023 X
10.48*** Indenture dated as of July 20, 2020 among Carnival
Corporation as issuer, Carnival plc, the other Guarantors
party thereto and U.S. Bank, National Association, as
trustee, security agent, principal paying agent, transfer
agent and registrar, relating to the U.S. dollar-
denominated 10.500% Second-Priority Senior Secured
Notes due 2026 and the Euro-denominated 10.125%
Second-Priority Senior Secured Notes due 2026 10-Q 10.2 10/8/20
10.49 First Supplemental Indenture dated as of November 18,
2020 among Carnival Corporation as issuer, Carnival
plc, the other Guarantors party thereto and U.S. Bank,
National Association, as trustee and security agent,
relating to the U.S. dollar-denominated 10.500%
Second-Priority Senior Secured Notes due 2026 and the
Euro-denominated 10.125% Second-Priority Senior
Secured Notes due 2026 X
10.50*** Indenture dated as of August 18, 2020 among Carnival
Corporation as issuer, Carnival plc, the other Guarantors
party thereto and U.S. Bank, National Association, as
trustee, security agent, principal paying agent, transfer
agent and registrar, relating to the 9.875% Second-
Priority Senior Secured Notes due 2027 10-Q 10.3 10/8/20
10.51 First Supplemental Indenture dated as of November 18,
2020 among Carnival Corporation as issuer, Carnival
plc, the other Guarantors party thereto and U.S. Bank,
National Association, as trustee and security agent,
relating to the 9.875% Second-Priority Senior Secured
Notes due 2027 X
47
INDEX TO EXHIBITS
Incorporated by Reference
Exhibit Filing Filed
Number Exhibit Description Form Exhibit Date Herewith
10.52 Indenture dated as of November 25, 2020 among
Carnival Corporation as issuer, Carnival plc, the other
Guarantors party thereto and U.S. Bank, National
Association, as trustee, principal paying agent, transfer
agent and registrar, relating to the U.S. dollar-
denominated 7.625% Senior Unsecured Notes due 2026
and the Euro-denominated 7.625% Senior Unsecured
Notes due 2026 X
10.53* Form of Special Performance-Based Restricted Stock
Unit Agreement for the Carnival Corporation 2020
Stock Plan 10-Q 10.4 10/8/20
10.54* Form of Special Performance-Based Restricted Share
Unit Agreement for the Carnival plc 2014 Employee
Share Plan 10-Q 10.5 10/8/20
10.55* Form of Retention Time-Based Restricted Stock Unit
Agreement for the Carnival Corporation 2020 Stock
Plan 10-Q 10.6 10/8/20
10.56* Form of Retention Time-Based Restricted Share Unit
Agreement for the Carnival plc 2014 Employee Share
Plan 10-Q 10.7 10/8/20
10.57 Amendment Agreement dated December 31, 2020 to the
Amendment and Restatement Agreement dated August
6, 2019 in respect of the Multicurrency Revolving
Facilities Agreement originally dated May 18, 2011, as
amended and restated on August 6, 2019, among
Carnival Corporation, Carnival plc and certain of
Carnival Corporation and Carnival plc subsidiaries,
Bank of America Europe Designated Activity Company
as facilities agent and a syndicate of financial
institutions. 8-K 10.1 1/6/21
Annual report to security holders
13 Portions of the 2020 Annual Report. X
Subsidiaries of the registrants
21 Subsidiaries of Carnival Corporation and Carnival plc. X
Consents of experts and counsel
23 Consent of Independent Registered Public Accounting
Firm. X
Power of attorney
48
INDEX TO EXHIBITS
Incorporated by Reference
Exhibit Filing Filed
Number Exhibit Description Form Exhibit Date Herewith
Power 24
of attorney
Power of Attorney given by certain Directors of
24 Power of Attorney
Carnival given by
Corporation certain
and Directors
Carnival plc to of Carnival
Arnold W. Corporation
andDonald,
CarnivalDavid
plc toBernstein
Arnold W.and Arnaldo
Donald, Perez
David authorizing
Bernstein
such persons to sign this 2020 joint Annual Report on
and Arnaldo Perez authorizing such persons to sign
Form 10-K and any future amendments on their behalf. X
this 2020 joint Annual Report on Form 10-K and any future
amendments on their behalf.
Rule 13a-14(a)/15d-14(a) certifications
31.1 Certification of President and Chief Executive Officer
of Carnival Corporation pursuant to Rule 13a-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002. X
31.2 Certification of Chief Financial Officer and Chief
Accounting Officer of Carnival Corporation pursuant to
Rule 13a-14(a), as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002. X
31.3 Certification of President and Chief Executive Officer
of Carnival plc pursuant to Rule 13a-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002. X
31.4 Certification of Chief Financial Officer and Chief
Accounting Officer of Carnival plc pursuant to Rule
13a-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002. X
Section 1350 certifications
32.1** Certification of President and Chief Executive Officer
of Carnival Corporation pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002. X
32.2** Certification of Chief Financial Officer and Chief
Accounting Officer of Carnival Corporation pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002. X
32.3** Certification of President and Chief Executive Officer
of Carnival plc pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002. X
32.4** Certification of Chief Financial Officer and Chief
Accounting Officer of Carnival plc pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002. X
Interactive data file
101 The consolidated financial statements from Carnival
Corporation & plc’s Form 10-K for the year ended
November 30, 2020, as filed with the SEC on January
26, 2021 formatted in Inline XBRL, are as follows:
49
INDEX TO EXHIBITS
Incorporated by Reference
Exhibit Filing Filed
Number Exhibit Description Form Exhibit Date Herewith
101 (i) the Consolidated Statements of Income for the years
ended November 30, 2020, 2019 and 2018; X
(ii) the Consolidated Statements of Comprehensive
Income for the years ended November 30, 2020, 2019
and 2018; X
(iii) the Consolidated Balance Sheets at November 30,
2020 and 2019; X
(iv) the Consolidated Statements of Cash Flows for the
years ended November 30, 2020, 2019 and 2018; X
(v) the Consolidated Statements of Shareholders’ Equity
for the years ended November 30, 2020, 2019 and 2018
and X
(vi) the notes to the consolidated financial statements,
tagged in summary and detail. X
104 The cover page from Carnival Corporation & plc’s
Form 10-K for the year ended November 30, 2020, as
filed with the Securities and Exchange Commission on
January 26, 2021, formatted in Inline XBRL (included
as Exhibit 101)
*Indicates a management contract or compensation plan or arrangement.
**These items are furnished and not filed.
***Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10) of Regulation S-K
Item 16. Form 10-K Summary.
None.
50
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, each of the registrants has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
CARNIVAL CORPORATION CARNIVAL PLC
/s/ Arnold W. Donald /s/ Arnold W. Donald
Arnold W. Donald Arnold W. Donald
President and Chief Executive Officer and President and Chief Executive Officer and
Director Director
January 26, 2021 January 26, 2021
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of each of the registrants and in the capacities and on the dates indicated.
CARNIVAL CORPORATION CARNIVAL PLC
/s/ Arnold W. Donald /s/ Arnold W. Donald
Arnold W. Donald Arnold W. Donald
President and Chief Executive Officer and President and Chief Executive Officer and
Director Director
January 26, 2021 January 26, 2021
/s/ David Bernstein /s/ David Bernstein
David Bernstein David Bernstein
Chief Financial Officer and Chief Accounting Officer Chief Financial Officer and Chief Accounting Officer
January 26, 2021 January 26, 2021
/s/*Micky Arison /s/*Micky Arison
Micky Arison Micky Arison
Chairman of the Board of Chairman of the Board of
Directors Directors
January 26, 2021 January 26, 2021
/s/*Sir Jonathon Band /s/*Sir Jonathon Band
Sir Jonathon Band Sir Jonathon Band
Director Director
January 26, 2021 January 26, 2021
/s/*Jason Glen Cahilly /s/*Jason Glen Cahilly
Jason Glen Cahilly Jason Glen Cahilly
Director Director
January 26, 2021 January 26, 2021
/s/*Helen Deeble /s/*Helen Deeble
Helen Deeble Helen Deeble
Director Director
January 26, 2021 January 26, 2021
/s/*Jeffrey J. Gearhart /s/*Jeffrey J. Gearhart
51
CARNIVAL CORPORATION CARNIVAL PLC
/s/*Jeffrey J. Gearhart /s/*Jeffrey J. Gearhart
Jeffrey J. Gearhart Jeffrey J. Gearhart
Director Director
January 26, 2021 January 26, 2021
/s/*Richard J. Glasier /s/*Richard J. Glasier
Richard J. Glasier Richard J. Glasier
Director Director
January 26, 2021 January 26, 2021
/s/*Katie Lahey /s/*Katie Lahey
Katie Lahey Katie Lahey
Director Director
January 26, 2021 January 26, 2021
/s/*Sir John Parker /s/*Sir John Parker
Sir John Parker Sir John Parker
Director Director
January 26, 2021 January 26, 2021
/s/*Stuart Subotnick /s/*Stuart Subotnick
Stuart Subotnick Stuart Subotnick
Director Director
January 26, 2021 January 26, 2021
/s/*Laura Weil /s/*Laura Weil
Laura Weil Laura Weil
Director Director
January 26, 2021 January 26, 2021
/s/*Randall J. Weisenburger /s/*Randall J. Weisenburger
Randall J. Weisenburger Randall J. Weisenburger
Director Director
January 26, 2021 January 26, 2021
*By: /s/ Arnaldo Perez *By: /s/ Arnaldo Perez
Arnaldo Perez Arnaldo Perez
(Attorney-in-fact) (Attorney-in-fact)
January 26, 2021 January 26, 2021
52
Exhibit 4.1
January 18, 2021
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
RE: Carnival Corporation, Commission File No. 001-9610, and
Carnival plc, Commission File No. 001-15136
Ladies and Gentlemen:
Pursuant to Item 601(b) (4) (iii) of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended,
Carnival Corporation and Carnival plc (the “Companies”) hereby agree to furnish copies of certain long-term debt instruments
to the Securities and Exchange Commission upon the request of the Commission and, in accordance with such regulation, such
instruments are not being filed as part of the joint Annual Report on Form 10-K of the Companies for their year ended
November 30, 2020.
Very truly yours,
CARNIVAL CORPORATION AND CARNIVAL PLC
/s/ Arnaldo Perez
General Counsel and Secretary
Table of Contents
Exhibit 13
CARNIVAL CORPORATION & PLC
EXHIBIT 13 TO FORM 10-K
FOR THE YEAR ENDED NOVEMBER 30, 2020
TABLE OF CONTENTS
CONSOLIDATED STATEMENTS OF INCOME (LOSS)................................................................................................ 2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)............................................................. 3
CONSOLIDATED BALANCE SHEETS........................................................................................................................... 4
CONSOLIDATED STATEMENTS OF CASH FLOWS.................................................................................................... 5
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY............................................................................ 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS......................................................................................... 7
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM............................................................. 40
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS..................................................................................................................................................................... 44
SELECTED FINANCIAL DATA....................................................................................................................................... 63
COMMON STOCK AND ORDINARY SHARES............................................................................................................. 65
STOCK PERFORMANCE GRAPHS................................................................................................................................. 66
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)................................................................................... 68
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CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in millions, except per share data)
Years Ended November 30,
2020 2019 2018
Revenues
Passenger ticket $ 3,684 $ 14,104 $ 13,930
Onboard and other 1,910 6,721 4,950
5,595 20,825 18,881
Operating Costs and Expenses
Commissions, transportation and other 1,139 2,720 2,590
Onboard and other 605 2,101 638
Payroll and related 1,780 2,249 2,190
Fuel 823 1,562 1,619
Food 413 1,083 1,066
Ship and other impairments 1,967 26 16
Other operating 1,518 3,167 2,971
8,245 12,909 11,089
Selling and administrative 1,878 2,480 2,450
Depreciation and amortization 2,241 2,160 2,017
Goodwill impairments 2,096 — —
14,460 17,549 15,556
Operating Income (Loss) (8,865 3,276 3,325
Nonoperating Income (Expense)
Interest income 18 23 14
Interest expense, net of capitalized interest (895 (206) (194)
Gains on fuel derivatives, net — — 59
Other income (expense), net (511 (32) 3
(1,388 (215) (118)
Income (Loss) Before Income Taxes (10,253 3,060 3,207
Income Tax Benefit (Expense), Net 17 (71) (54)
Net Income (Loss) $ (10,236 $ 2,990 $ 3,152
Earnings Per Share
Basic $ (13.20 $ 4.34 $ 4.45
Diluted $ (13.20 $ 4.32 $ 4.44
The accompanying notes are an integral part of these consolidated financial statements.
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CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in millions)
Years Ended November 30,
2020 2019 2018
Net Income (Loss) $ (10,236) $ 2,990 $ 3,152
Items Included in Other Comprehensive Income (Loss)
Change in foreign currency translation adjustment 578 (86) (199)
Other 51 (31) 32
Other Comprehensive Income (Loss) 630 (117) (167)
Total Comprehensive Income (Loss) $ (9,606) $ 2,873 $ 2,986
The accompanying notes are an integral part of these consolidated financial statements.
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CARNIVAL CORPORATION & PLC
CONSOLIDATED BALANCE SHEETS
(in millions, except par values)
November 30,
2020 2019
ASSETS
Current Assets
Cash and cash equivalents $ 9,513 $ 518
Trade and other receivables, net 273 444
Inventories 335 427
Prepaid expenses and other 443 671
Total current assets 10,563 2,059
Property and Equipment, Net 38,073 38,131
Operating Lease Right-of-Use Assets (a) 1,370 —
Goodwill 807 2,912
Other Intangibles 1,186 1,174
Other Assets 1,594 783
$ 53,593 $ 45,058
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ 3,084 $ 231
Current portion of long-term debt 1,742 1,596
Current portion of operating lease liabilities (a) 151 —
Accounts payable 624 756
Accrued liabilities and other 1,144 1,809
Customer deposits 1,940 4,735
Total current liabilities 8,686 9,127
Long-Term Debt 22,130 9,675
Long-Term Operating Lease Liabilities (a) 1,273 —
Other Long-Term Liabilities 949 890
Commitments and Contingencies
Shareholders' Equity
Common stock of Carnival Corporation, $0.01 par value; 1,960 shares authorized; 1,060
shares at 2020 and 657 shares at 2019 issued 11 7
Ordinary shares of Carnival plc, $1.66 par value; 217 shares at 2020 and 2019 issued 361 358
Additional paid-in capital 13,948 8,807
Retained earnings 16,075 26,653
Accumulated other comprehensive income (loss) (“AOCI”) (1,436) (2,066)
Treasury stock, 130 shares at 2020 and 2019 of Carnival Corporation and 60 shares at
2020 and 2019 of Carnival plc, at cost (8,404) (8,394)
Total shareholders' equity 20,555 25,365
$ 53,593 $ 45,058
(a) We adopted the provisions of Leases on December 1, 2019.
The accompanying notes are an integral part of these consolidated financial statements.
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CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
Years Ended November 30,
2020 2019 2018
OPERATING ACTIVITIES
Net income (loss) $ (10,236) $ 2,990 $ 3,152
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities
Depreciation and amortization 2,241 2,160 2,017
Impairments 4,063 26 16
Gains on fuel derivatives, net — — (59)
Loss on repurchases of Convertible Notes 464 — —
Share-based compensation 105 46 65
Noncash lease expense 172 — —
(Gain) loss on ship sales and other, net 78 43 (6)
(3,114) 5,265 5,186
Changes in operating assets and liabilities
Receivables 125 (114) (58)
Inventories 77 79 (67)
Prepaid expenses and other (209) (254) 74
Accounts payable (165) 34 (24)
Accrued liabilities and other (311) 80 (100)
Customer deposits (2,703) 387 539
Net cash provided by (used in) operating activities (6,301) 5,475 5,549
INVESTING ACTIVITIES
Purchases of property and equipment (3,620) (5,429) (3,749)
Proceeds from sales of ships 334 26 389
Purchase of minority interest (81) — (135)
Derivative settlements and other, net 127 126 (19)
Net cash provided by (used in) investing activities (3,240) (5,277) (3,514)
FINANCING ACTIVITIES
Proceeds from (repayments of) short-term borrowings, net 2,852 (605) 417
Principal repayments of long-term debt (1,621) (1,651) (1,556)
Proceeds from issuance of long-term debt 15,020 3,674 2,542
Dividends paid (689) (1,387) (1,355)
Purchases of treasury stock (12) (603) (1,468)
Issuance of common stock, net 3,249 4 3
Other, net (150) (86) (42)
Net cash provided by (used in) financing activities 18,650 (655) (1,460)
Effect of exchange rate changes on cash, cash equivalents and restricted cash 53 (9) (1)
Net increase (decrease) in cash, cash equivalents and restricted cash 9,161 (465) 574
Cash, cash equivalents and restricted cash at beginning of year 530 996 422
Cash, cash equivalents and restricted cash at end of year $ 9,692 $ 530 $ 996
The accompanying notes are an integral part of these consolidated financial statements.
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CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in millions)
Additional Total
Common Ordinary paid-in Retained Treasury shareholders’
stock shares capital earnings AOCI stock equity
At November 30, 2017 $ 7 $ 358 $ 8,690 $ 23,292 $ (1,782) $ (6,349) $ 24,216
Net income (loss) — — — 3,152 — — 3,152
Other comprehensive income (loss) — — — — (167) — (167)
Cash dividends declared — — — (1,378) — — (1,378)
Purchases of treasury stock under
the Repurchase Program and other — — 66 — — (1,446) (1,380)
At November 30, 2018 7 358 8,756 25,066 (1,949) (7,795) 24,443
Change in accounting principle (a) — — — (24) — — (24)
Net income (loss) — — — 2,990 — — 2,990
Other comprehensive income (loss) — — — — (117) — (117)
Cash dividends declared — — — (1,379) — — (1,379)
Purchases of treasury stock under
the Repurchase Program and other — — 51 — — (599) (548)
At November 30, 2019 7 358 8,807 26,653 (2,066) (8,394) 25,365
Net income (loss) — — — (10,236) — — (10,236)
Other comprehensive income (loss) — — — — 630 — 630
Cash dividends declared — — — (342) — — (342)
Issuance of common stock 2 — 3,247 — — — 3,249
Issuance and repurchase of
Convertible Notes (net settled
through a registered direct offering) 2 — 1,798 — — — 1,799
Purchases of treasury stock under
the Repurchase Program and other — 2 97 — — (10) 89
At November 30, 2020 $ 11 $ 361 $ 13,948 $ 16,075 $ (1,436) $ (8,404) $ 20,555
The accompanying notes are an integral part of these consolidated financial statements.
(a) We adopted the provisions of Revenue from Contracts with Customers and Derivatives and Hedging on December 1,
2018.
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CARNIVAL CORPORATION & PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – General
Description of Business
Carnival Corporation was incorporated in Panama in 1974 and Carnival plc was incorporated in England and Wales in 2000.
Together with their consolidated subsidiaries, they are referred to collectively in these consolidated financial statements and
elsewhere in this 2020 Annual Report as “Carnival Corporation & plc,” “our,” “us” and “we.” The consolidated financial
statements include the accounts of Carnival Corporation and Carnival plc and their respective subsidiaries.
We are a leisure travel company with a portfolio of nine of the world’s leading cruise lines. With operations in North America,
Australia, Europe and Asia, our portfolio features – Carnival Cruise Line, Princess Cruises, Holland America Line, P&O
Cruises (Australia), Seabourn, Costa Cruises, AIDA Cruises, P&O Cruises (UK) and Cunard.
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 executive management team and identical Boards of Directors, but each has retained its separate
legal identity. Each company’s shares are publicly traded on the New York Stock Exchange (“NYSE”) for Carnival
Corporation and the London Stock Exchange for Carnival plc. 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.
Given the DLC arrangement, we believe that providing separate financial statements for each of Carnival Corporation and
Carnival plc would not present a true and fair view of the economic realities of their operations. Accordingly, separate financial
statements for Carnival Corporation and Carnival plc have not been presented.
Liquidity and Management’s Plans
In the face of the global impact of COVID-19, we paused our guest cruise operations in mid-March 2020. In September 2020
we began the resumption of limited guest operations as part of our phased-in return to service. As of January 14, 2021, none of
our ships were operating with guests onboard. Significant events affecting travel, including COVID-19 and our pause in guest
cruise operations, have had an impact on booking patterns. The full extent of the impact will be determined by our gradual
return to service and the length of time COVID-19 influences travel decisions. We believe that the ongoing effects of
COVID-19 on our operations and global bookings have had, and will continue to have, a material negative impact on our
financial results and liquidity.
The estimation of our future liquidity requirements includes numerous assumptions that are subject to various risks and
uncertainties. The principal assumptions used to estimate our future liquidity requirements consist of:
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• Expected continued gradual resumption of guest cruise operations
• Expected lower than comparable historical occupancy levels during the resumption of guest cruise operations
• Expected incremental expenses for the resumption of guest cruise operations, for the maintenance of additional public
health protocols and procedures for additional regulations
In addition, we make certain assumptions about new ship deliveries, improvements and disposals, and consider the future
export credit financings that are associated with the ship deliveries.
We are preparing to execute on the necessary steps to comply with the various heightened governmental regulations required to
return to guest cruise operations. We are working with a number of world-leading public health, epidemiological and policy
experts to support our ongoing efforts with enhanced protocols and procedures for the return of cruise vacations. These advisors
will continue to provide guidance based on the latest scientific evidence and best practices for protection and mitigation. We
also believe that there have been positive developments around the availability and widespread distribution and use of safe and
effective COVID-19 vaccines, which we believe will be important to achieving historical occupancy levels over time.
We cannot make assurances that our assumptions used to estimate our liquidity requirements may not change because we have
never previously experienced a complete cessation of our guest cruise operations, and as a consequence, our ability to be
predictive is uncertain. In addition, the magnitude, duration and speed of the global pandemic are uncertain. We have made
reasonable estimates and judgments of the impact of COVID-19 within our consolidated financial statements and there may be
changes to those estimates in future periods. We expect a net loss on both a U.S. GAAP and adjusted basis for 2021. We have
taken and continue to take actions to improve our liquidity, including capital expenditure and operating expense reductions,
amending credit agreements, accelerating the removal of certain ships from our fleet, suspending dividend payments on, and the
repurchase of, common stock of Carnival Corporation and ordinary shares of Carnival plc and pursuing various capital market
transactions.
Based on these actions and assumptions regarding the impact of COVID-19, and considering our available liquidity including
cash and cash equivalents of $9.5 billion at November 30, 2020, we have concluded that we have sufficient liquidity to satisfy
our obligations for at least the next twelve months. Beginning on February 28, 2022, one month beyond the twelve month
assessment period, additional financial covenant amendments for our export credit facilities has been requested and will be
needed in order to maintain covenant compliance.
NOTE 2 – Summary of Significant Accounting Policies
Basis of Presentation
We consolidate entities over which we have control, as typically evidenced by a voting control of greater than 50% or for which
we are the primary beneficiary, whereby we have the power to direct the most significant activities and the obligation to absorb
significant losses or receive significant benefits from the entity. We do not separately present our noncontrolling interests in the
consolidated financial statements since the amounts are immaterial. For affiliates we do not control but where significant
influence over financial and operating policies exists, as typically evidenced by a voting control of 20% to 50%, the investment
is accounted for using the equity method.
For 2019 and 2018, we reclassified $390 million and $272 million from tour and other revenues to onboard and other revenues
as well as $268 million and $180 million from tour and other costs and expenses to other operating cost and expenses in order
to conform to the current year presentation.
Preparation of Financial Statements
The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the
United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts
reported and disclosed in our consolidated financial statements. The full extent to which the effects of COVID-19 will directly
or indirectly impact our business, operations, results of operations and financial condition, including our valuation of goodwill
and trademarks, impairment of ships, collectability of trade and notes receivables as well as provisions for pending litigation,
will depend on future developments that are highly uncertain. We believe that we have made reasonable estimates and
judgments within our financial statements and there may be changes to those estimates in future periods. Actual results may
differ from the estimates used in preparing our consolidated financial statements. All material intercompany balances and
transactions are eliminated in consolidation.
Cash and Cash Equivalents
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Cash and cash equivalents include investments with maturities of three months or less at acquisition, which are stated at cost
and present insignificant risk of changes in value.
Inventories
Inventories consist substantially of food, beverages, hotel supplies, fuel and retail merchandise, which are all carried at the
lower of cost or net realizable value. Cost is determined using the weighted-average or first-in, first-out methods.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation and any impairment charges. Depreciation is computed
using the straight-line method over our estimates of useful lives and residual values, as a percentage of original cost, as follows:
Residual
Years Values
Ships 30 15%
Ship improvements 3-30 0%
Buildings and improvements 10-40 0% or 10%
Computer hardware and software 2-12 0% or 10%
Transportation equipment and other 3-20 0% or 10%
Leasehold improvements, including port facilities Shorter of the remaining lease term 0%
or related asset life (3-30)
The cost of ships under construction include progress payments for the construction of new ships, as well as design and
engineering fees, capitalized interest, construction oversight costs and various owner supplied items. We account for ship
improvement costs, including replacements of certain significant components and parts, by capitalizing those costs we believe
add value to our ships and have a useful life greater than one year and depreciating those improvements over their estimated
remaining useful life. We have a capital program for the improvement of our ships and for asset replacements in order to
enhance the effectiveness and efficiency of our operations; to comply with, or exceed, all relevant legal and statutory
requirements related to health, environment, safety, security and sustainability; and to gain strategic benefits or provide
improved product innovations to our guests.
We capitalize interest as part of the cost of capital projects during their construction period. The specifically identified or
estimated cost and accumulated depreciation of previously capitalized ship components are written-off upon retirement, which
may result in a loss on disposal that is also included in other operating expenses. Liquidated damages received from shipyards
as a result of late ship delivery are recorded as reductions to the cost basis of the ship.
The costs of repairs and maintenance, including minor improvement costs and expenses related to dry-docks, are charged to
expense as incurred and included in other operating expenses. Dry-dock expenses primarily represent planned major
maintenance activities that are incurred when a ship is taken out-of-service for scheduled maintenance.
We review our long-lived assets for impairment whenever events or circumstances indicate that the carrying amounts of these
assets may not be recoverable. Upon the occurrence of a triggering event, the assessment of possible impairment is based on our
ability to recover the carrying value of our asset from the asset’s estimated undiscounted future cash flows. If these estimated
undiscounted future cash flows are less than the carrying value of the asset, an impairment charge is recognized for the excess,
if any, of the asset’s carrying value over its estimated fair value. The lowest level for which we maintain identifiable cash flows
that are independent of the cash flows of other assets and liabilities is at the individual ship level. A significant amount of
judgment is required in estimating the future cash flows and fair values of our cruise ships.
Goodwill and Other Intangibles
Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in a business
acquisition. We review our goodwill for impairment as of July 31 every year, or more frequently if events or circumstances
dictate. All of our goodwill has been allocated to our reporting units. The impairment review for goodwill allows us to first
assess qualitative factors to determine whether it is necessary to perform the more detailed quantitative goodwill impairment
test. We would perform the quantitative test if our qualitative assessment determined it is more-likely-than-not that a reporting
unit’s estimated fair value is less than its carrying amount. We may also elect to bypass the qualitative assessment and proceed
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directly to the quantitative test for any reporting unit. When performing the quantitative test, if the estimated fair value of the
reporting unit exceeds its carrying value, no further analysis is required. However, if the estimated fair value of the reporting
unit is less than the carrying value, goodwill is written down based on the difference between the reporting unit’s carrying
amount and its fair value, limited to the amount of goodwill allocated to the reporting unit.
Trademarks represent substantially all of our other intangibles. Trademarks are estimated to have an indefinite useful life and
are not amortizable but are reviewed for impairment at least annually and as events or circumstances dictate. The impairment
review for trademarks also allows us to first assess qualitative factors to determine whether it is necessary to perform a more
detailed quantitative trademark impairment test. We would perform the quantitative test if our qualitative assessment
determined it was more-likely-than-not that the trademarks are impaired. We may also elect to bypass the qualitative
assessment and proceed directly to the quantitative test. Our trademarks would be considered impaired if their carrying value
exceeds their estimated fair value.
A significant amount of judgment is required in estimating the fair values of our reporting units.
Derivatives and Other Financial Instruments
We utilize derivative and non-derivative financial instruments, such as foreign currency forwards, options and swaps, foreign
currency debt obligations and foreign currency cash balances, to manage our exposure to fluctuations in certain foreign
currency exchange rates. We use interest rate swaps primarily to manage our interest rate exposure to achieve a desired
proportion of fixed and floating rate debt. Our policy is to not use financial instruments for trading or other speculative
purposes.
All derivatives are recorded at fair value. If a derivative is designated as a cash flow hedge, then the change in the fair value of
the derivative is recognized as a component of AOCI until the underlying hedged item is recognized in earnings or the
forecasted transaction is no longer probable. If a derivative or a non-derivative financial instrument is designated as a hedge of
our net investment in a foreign operation, then changes in the effective portion of the fair value of the financial instrument are
recognized as a component of AOCI to offset the change in the translated value of the designated portion of net investment
being hedged until the investment is sold or substantially liquidated, while the impact attributable to components excluded from
the assessment of hedge effectiveness is recorded in interest expense, net of capitalized interest, on a systematic and rational
basis. For derivatives that do not qualify for hedge accounting treatment, the change in fair value is recognized in earnings.
We classify the fair value of all our derivative contracts as either current or long-term, depending on the maturity date of the
derivative contract. The cash flows from derivatives treated as cash flow hedges are classified in our Consolidated Statements
of Cash Flows in the same category as the item being hedged. Our cash flows related to fuel derivatives are classified within
investing activities.
Derivative valuations are based on observable inputs such as interest rates and commodity price curves, forward currency
exchange rates, credit spreads, maturity dates, volatilities, and cross currency basis spreads. We use the income approach to
value derivatives for foreign currency options and forwards, interest rate swaps and cross currency swaps using observable
market data for all significant inputs and standard valuation techniques to convert future amounts to a single present value
amount, assuming that participants are motivated but not compelled to transact.
Foreign Currency Translation and Transactions
Each foreign entity determines its functional currency by reference to its primary economic environment. We translate the
assets and liabilities of our foreign entities that have functional currencies other than the U.S. dollar at exchange rates in effect
at the balance sheet date. Revenues and expenses of these foreign entities are translated at weighted-average exchange rates for
the period. Equity is translated at historical rates and the resulting foreign currency translation adjustments are included as a
component of AOCI, which is a separate component of shareholders’ equity. Therefore, the U.S. dollar value of the non-equity
translated items in our consolidated financial statements will fluctuate from period to period, depending on the changing value
of the U.S. dollar versus these currencies.
We execute transactions in a number of different currencies. At the date that the transaction is recognized, each asset, liability,
revenue, expense, gain or loss arising from the transaction is measured and recorded in the functional currency of the recording
entity using the exchange rate in effect at that date. At each balance sheet date, recorded monetary balances denominated in
a currency other than the functional currency are adjusted using the exchange rate at the balance sheet date, with gains or losses
recorded in other income or other expense, unless such monetary balances have been designated as hedges of net investments in
our foreign entities. The net gains or losses resulting from foreign currency transactions were not material in 2020, 2019 and
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2018. In addition, the unrealized gains or losses on our long-term intercompany receivables and payables which are
denominated in a non-functional currency and which are not expected to be repaid in the foreseeable future are recorded as
foreign currency translation adjustments included as a component of AOCI.
Revenue and Expense Recognition
Guest cruise deposits are initially included in customer deposit liabilities when received. Customer deposits are subsequently
recognized as cruise revenues, together with revenues from onboard and other activities, and all associated direct costs and
expenses of a voyage are recognized as cruise costs and expenses, upon completion of voyages, with durations of ten nights or
less and on a pro rata basis for voyages in excess of ten nights. The impact of recognizing these shorter duration cruise revenues
and costs and expenses on a completed voyage basis versus on a pro rata basis is not material. Certain of our product offerings
are bundled and we allocate the value of the bundled services and goods between passenger ticket revenues and onboard and
other revenues based upon the estimated standalone selling prices of those goods and services. Guest cancellation fees, when
applicable, are recognized in passenger ticket revenues at the time of cancellation.
Our sales to guests of air and other transportation to and from airports near the home ports of our ships are included in
passenger ticket revenues, and the related costs of purchasing these services are included in transportation costs. The proceeds
that we collect from the sales of third-party shore excursions are included in onboard and other revenues and the related costs
are included in onboard and other costs. The amounts collected on behalf of our onboard concessionaires, net of the amounts
remitted to them, are included in onboard and other revenues as concession revenues. All of these amounts are recognized on a
completed voyage or pro rata basis as discussed above.
Passenger ticket revenues include fees, taxes and charges collected by us from our guests. A portion of these fees, taxes and
charges vary with guest head counts and are directly imposed on a revenue-producing arrangement. This portion of the fees,
taxes and charges is expensed in commissions, transportation and other costs when the corresponding revenues are
recognized. These fees, taxes and charges included in commissions, transportation and other costs were $215 million in 2020,
$659 million in 2019 and $615 million in 2018. 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 have provided, and expect to continue to provide,
flexibility to guests with bookings on sailings cancelled due to the pause in cruise operations by allowing guests to receive
enhanced future cruise credits ("FCC") or to elect to receive refunds in cash. We have paid and expect to continue to pay cash
refunds of customer deposits with respect to a portion of these cancelled cruises. The amount of cash refunds to be paid may
depend on the level of guest acceptance of FCCs and future cruise cancellations. We record a liability for these FCCs only to
the extent we have received cash from guests with bookings on cancelled sailings. We had customer deposits of $2.2 billion and
$4.9 billion as of November 30, 2020 and 2019. The current portion of our customer deposits was $1.9 billion and $4.7 billion
as of November 30, 2020 and 2019. These amounts include deposits related to cancelled cruises prior to the election of a cash
refund by guests. Refunds payable to guests who have elected cash refunds are recorded in accounts payable. Due to the
uncertainty associated with the duration and extent of COVID-19, we are unable to estimate the amount of the November 30,
2020 customer deposits that will be recognized in earnings compared to amounts that will be refunded to customers or issued as
a credit for future travel. During 2020 and 2019, we recognized revenues of $3.2 billion and $4.3 billion related to our customer
deposits as of November 30, 2019 and December 1, 2018. Historically, our customer deposits balance changes due to the
seasonal nature of cash collections, the recognition of revenue, refunds of customer deposits and foreign currency translation.
Contract Receivables
Although we generally require full payment from our customers prior to or concurrently with their cruise, we grant credit terms
to a relatively small portion of our revenue source. We also have receivables from credit card merchants for cruise ticket
purchases and onboard revenue. These receivables are included within trade and other receivables, net.
Contract Assets
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Contract assets are amounts paid prior to the start of a voyage, which we record as an asset within prepaid expenses and other
and which are subsequently recognized as commissions, transportation and other at the time of revenue recognition or at the
time of voyage cancellation. We have contract assets of an immaterial amount and $154 million as of November 30, 2020 and
November 30, 2019.
Insurance
We use a combination of insurance and self-insurance to cover a number of risks including illness and injury to crew, guest
injuries, pollution, other third-party claims in connection with our cruise activities, damage to hull and machinery for each of
our ships, war risks, workers’ compensation, directors’ and officers’ liability, property damage and general liability for
shoreside third-party claims. We recognize insurance recoverables from third-party insurers up to the amount of recorded losses
at the time the recovery is probable and upon settlement for amounts in excess of the recorded losses. All of our insurance
policies are subject to coverage limits, exclusions and deductible levels. 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.
Selling and Administrative Expenses
Selling expenses include a broad range of advertising, marketing and promotional expenses. Advertising is charged to expense
as incurred, except for media production costs, which are expensed upon the first airing of the advertisement. Selling expenses
totaled $348 million in 2020, $728 million in 2019 and $673 million in 2018. Administrative expenses represent the costs of our
shoreside support, reservations and other administrative functions, and include salaries and related benefits, professional fees
and building occupancy costs, which are typically expensed as incurred.
Share-Based Compensation
We recognize compensation expense for all share-based compensation awards using the fair value method. For time-based
share awards, we recognize compensation cost ratably using the straight-line attribution method over the expected vesting
period or to the retirement eligibility date, if earlier than the vesting period. For performance-based share awards, we estimate
compensation cost based on the probability of the performance condition being achieved and recognize expense ratably using
the straight-line attribution method over the expected vesting period. If all or a portion of the performance condition is not
expected to be met, the appropriate amount of previously recognized compensation expense is reversed and future
compensation expense is adjusted accordingly. For market-based share awards, we recognize compensation cost ratably using
the straight-line attribution method over the expected vesting period. If the target market conditions are not expected to be met,
compensation expense will still be recognized. We account for forfeitures as they occur.
Earnings Per Share
Basic earnings per share is computed by dividing net income (loss) by the weighted-average number of shares outstanding
during each period. Diluted earnings per share is computed by dividing net income (loss) by the weighted-average number of
shares and common stock equivalents outstanding during each period. For earnings per share purposes, Carnival Corporation
common stock and Carnival plc ordinary shares are considered a single class of shares since they have equivalent rights.
Accounting Pronouncements
On December 1, 2019, we adopted the Financial Accounting Standards Board (the “FASB”) issued guidance, Leases, using the
modified retrospective approach, which allows entities to either apply the new lease standard to the beginning of the earliest
period presented or only to the consolidated financial statements in the period of adoption without restating prior periods. We
have elected to apply the new guidance at the date of adoption without restating prior periods.
We have implemented changes to our internal controls to address the collection, recording, and accounting for leases in
accordance with the new guidance. Upon adoption of the new guidance, the most material impact was the recognition of
$1.4 billion of right-of-use assets and lease liabilities relating to operating leases, reported within operating lease right-of-use
assets and long-term operating lease liabilities, with the current portion of the liability reported within current portion of
operating lease liabilities, in our Consolidated Balance Sheet as of December 1, 2019. There was no cumulative effect of
applying the new standard and accordingly there was no adjustment to our retained earnings upon adoption. This guidance had
an immaterial impact on our Consolidated Statements of Income (Loss), Consolidated Statements of Comprehensive Income
(Loss), Consolidated Statements of Cash Flows and the compliance with debt-covenants under our current agreements.
F-12
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The FASB issued amended guidance, Compensation - Retirement Benefits - Defined Benefit Plans - General, which clarifies
disclosure requirements for entities that sponsor defined benefit pension or other postretirement plans. This guidance eliminates
requirements for certain disclosures that are no longer considered cost beneficial. Additionally, this guidance requires
explanations of the reasons for material gains and losses related to changes in the defined benefit obligation for the period and
any other material change in the benefit obligation or plan assets not otherwise apparent in disclosures. On November 30, 2020,
we adopted this guidance using the retrospective method for each period presented. As a result, we are not required to present
the amount in accumulated other comprehensive income that is expected to be recognized as components of net periodic benefit
cost over the next fiscal year.
The FASB issued amended guidance, Intangibles - Goodwill and Other - Internal-Use Software, which requires a customer in a
cloud computing arrangement that is a service contract to follow the internal-use software guidance to determine which
implementation costs to capitalize as assets or expense as incurred. The expense related to deferred implementation costs is
required to be presented in the same line item within the Consolidated Statements of Income (Loss) as the related hosting fees.
Additionally, the payments for deferred implementation costs are required to be presented in the same line item in the
Consolidated Statements of Cash Flows as payments for the related hosting fees. This guidance is required to be adopted by us
in the first quarter of 2021 and we have elected to apply the guidance using a prospective approach. We do not expect the
adoption of this guidance to have a material impact on our consolidated financial statements.
The FASB issued amended guidance, Financial Instruments - Credit Losses, which requires an entity to present the net amount
expected to be collected for certain financial assets, including trade receivables. On initial recognition and at each reporting
period, this guidance will require an entity to recognize an allowance that reflects the entity's current estimate of credit losses
expected to be incurred over the life of the financial instrument. This guidance is required to be adopted by us in the first
quarter of 2021 and will be applied prospectively with a cumulative-effect adjustment to retained earnings. We do not expect
the adoption of this guidance to have a material impact on our consolidated financial statements.
The FASB issued guidance, Debt - Debt with Conversion and Other Options and Derivative and Hedging - Contracts in
Entity's Own Equity, which simplifies the accounting for convertible instruments. This guidance eliminates certain models that
require separate accounting for embedded conversion features, in certain cases. Additionally, among other changes, the
guidance eliminates certain of the conditions for equity classification for contracts in an entity’s own equity. The guidance also
requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and
include the effect of share settlement for instruments that may be settled in cash or shares, except for certain liability-classified
share-based payment awards. This guidance is required to be adopted by us in the first quarter of 2023 and must be applied
using either a modified or full retrospective approach. We are currently evaluating the impact this guidance will have on our
consolidated financial statements.
NOTE 3 – Property and Equipment
November 30,
(in millions) 2020 2019
Ships and ship improvements $ 49,803 $ 50,446
Ships under construction 1,354 2,492
Other property and equipment 3,992 3,843
Total property and equipment 55,148 56,781
Less accumulated depreciation (17,075) (18,650)
$ 38,073 $ 38,131
Capitalized interest amounted to $66 million in 2020, $39 million in 2019 and $36 million in 2018.
Sales of Ships
We have sold 12 NAA segment ships and five EA segment ships, which represents a passenger-capacity reduction of 20,510 for
our NAA segment and 9,740 for our EA segment. In addition, we expect to sell two NAA segment ships which represents a
passenger-capacity reduction of 2,100.
Refer to Note 10 - “Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks,
Nonfinancial Instruments that are Measured at Fair Value on a Nonrecurring Basis, Impairment of Ships” for additional
discussion.
F-13
Table of Contents
NOTE 4 – Other Assets
We have a minority interest in Grand Bahama Shipyard Ltd. (“Grand Bahama”), a ship repair and maintenance facility. Grand
Bahama provided services to us of $38 million in 2020, $62 million in 2019 and $89 million in 2018. As of November 30,
2020, our investment in Grand Bahama was $55 million, consisting of $13 million in equity and a loan of $42 million. As of
November 30, 2019, our investment in Grand Bahama was $54 million, consisting of $15 million in equity and a loan of
$39 million.
We have a minority interest in the White Pass & Yukon Route (“White Pass”) that includes port, railroad and retail operations
in Skagway, Alaska. Due to the impact of COVID-19 on the Alaska season, White Pass provided no services to us in 2020, and
$22 million in 2019. As of November 30, 2020, our investment in White Pass was $94 million, consisting of $75 million in
equity and a loan of $19 million. As of November 30, 2019, our investment in White Pass was $102 million, consisting of
$84 million in equity and a loan of $18 million.
We have a minority interest in CSSC Carnival Cruise Shipping Limited (“CSSC-Carnival”), a China-based cruise company
which will operate its own fleet designed to serve the Chinese market. As of November 30, 2020 and 2019, our investment in
CSSC-Carnival was $140 million and $48 million. In December 2019, we sold to CSSC-Carnival a controlling interest in an
entity with full ownership of two EA segment ships and recognized a related gain of $107 million, included in other operating
expenses in our Consolidated Statements of Income (Loss). As of November 30, 2020, our investment in the minority interest
of this entity was $283 million.
NOTE 5 – Debt
November 30,
(in millions) Maturity Rate (a) 2020 2019
Secured Debt
Notes
Notes Apr 2023 11.5% $ 4,000 $ —
Notes Feb 2026 10.5% 775 —
EUR Notes Feb 2026 10.1% 508 —
Notes (c) Jun 2027 7.9% 192 192
Notes Aug 2027 9.9% 900 —
Bank Loans
EUR fixed rate (c) Jul 2024 - May 2025 5.5 - 6.2% 136 154
Floating rate Jun 2025 LIBOR + 7.5% 1,855 —
EUR floating rate (c) Jun 2025 - Oct 2026 EURIBOR + 2.7 - 7.5% 1,026 77
Total Secured Debt 9,393 423
Unsecured Debt
Revolver
Facility (expires Aug 2024) (b) LIBOR + 0.6% 3,083 —
Notes
Notes Oct 2020 4.0% — 700
EUR Notes Feb 2021 1.6% 429 550
EUR Notes Nov 2022 1.9% 658 605
Convertible Notes Apr 2023 5.8% 537 —
Notes Oct 2023 7.2% 125 125
Notes Mar 2026 7.6% 1,450 —
EUR Notes Mar 2026 7.6% 598 —
Notes Jan 2028 6.7% 200 200
EUR Notes Oct 2029 1.0% 718 660
Bank Loans
F-14
Table of Contents
Maturity Rate (a) November 30,
(in millions) 2020 2019
Bank Loans
EUR fixed rate Mar 2021 - Sep 2021 0.3 - 3.9% 32 221
EUR floating rate Mar 2021 - Apr 2023 EURIBOR + 0.3 - 4.8% 1,860 1,596
Floating rate Jul 2024 - Sep 2024 LIBOR + 3.8% 300 300
GBP floating rate Aug 2021 - Feb 2025 GBP LIBOR + 0.8 - 0.9% 881 854
Export Credit Facilities
EUR floating rate Mar 2021 - Oct 2032 EURIBOR + 0.2 - 1.5% 1,891 963
EUR fixed rate Feb 2031 - Sep 2032 1.1% 1,159 545
Fixed rate Aug 2027 - Oct 2031 2.4 - 3.4% 3,131 3,485
Floating rate Feb 2022 - Dec 2031 LIBOR + 0.5 - 1.5% 1,138 174
Commercial Paper
EUR floating rate commercial paper — —% — 231
Total Unsecured Debt 18,188 11,211
Total Debt 27,581 11,634
Less: unamortized debt issuance costs (624) (131)
Total
TotalDebt,
Debt,net
net of
of unamortized
unamortized debt issuancecosts
debt issuance 26,957 11,503
costs
Less: short-term borrowings (3,084) (231)
Less: current portion of long-term debt (1,742) (1,596)
Long-Term Debt $ 22,130 $ 9,675
F-15
Table of Contents
The scheduled maturities of our debt are as follows: (table is in millions)
November 30, 2020 2021
(in millions) Rate [seeRate
footnote
(a) (a)] 1Q 2Q 3Q 4Q 2022 2023 2024 2025 Thereafter
Secured Debt
Notes
Notes 11.5% $ — $ — $ — $ — $ — $ 4,000 $ — $ — $ —
Notes 10.5% — — — — — — — — 775
EUR Notes 10.1% — — — — — — — — 508
Notes (c) 7.9% — — — — — — — — 192
Notes 9.9% — — — — — — — — 900
Bank Loans
EUR
EUR fixed
fixed rate [see footnote
rate (c) 5.5 - 6.2% 8 8 8 8 32 32 32 8 —
(c)]
Floating rate LIBOR + 7.5% 5 5 5 5 19 19 19 1,781 —
EUR
EUR floating
floating rate [see footnote
rate (c) EURIBOR + 2.7 - 7.5% 2 8 2 8 22 22 22 928 12
(c)] Total Secured Debt 15 21 15 21 72 4,072 72 2,717 2,387
Unsecured Debt
Revolver
Facility (expires Aug 2024) LIBOR + 0.6% — — — — — — 3,083 — —
Notes
EUR Notes 1.6% 429 — — — — — — — —
EUR Notes 1.9% — — — — 658 — — — —
Convertible Notes 5.8% — — — — — 537 — — —
Notes 7.2% — — — — — 125 — — —
Notes 7.6% — — — — — — — — 1,450
EUR Notes 7.6% — — — — — — — — 598
Notes 6.7% — — — — — — — — 200
EUR Notes 1.0% — — — — — — — — 718
Bank Loans
EUR fixed rate 0.3 - 3.9% — 17 — 15 — — — — —
EUR floating rate EURIBOR + 0.3 - 4.8% — 179 — — 1,053 628 — — —
Floating rate LIBOR + 3.8% — — — — — — 300 — —
GBP floating rate GBP LIBOR + 0.8 - 0.9% 40 — 375 — — — 93 373 —
Export Credit Facilities
EUR floating rate EURIBOR + 0.2 - 1.5% — 24 49 124 333 306 277 200 629
EUR fixed rate 1.1% — — 26 26 103 103 103 103 644
Fixed rate 2.4 - 3.4% — 74 36 98 291 332 332 332 1,576
Floating rate LIBOR + 0.5 - 1.5% 16 35 68 41 194 152 152 92 446
Total Unsecured Debt 485 330 553 304 2,631 2,183 4,340 1,100 6,261
Total Debt $ 500 $ 351 $ 568 $ 325 $ 2,703 $ 6,255 $ 4,412 $ 3,818 $ 8,648
footnote (a): Certain
(a) Certain of the
of the EURIBOR and
EURIBOR andLIBOR based
LIBOR loansloans
based have 0% or 1%
have 0%floors,
or 1% respectively.
floors, respectively.
(b) (b):
footnote AsAsofofNovember
November 30,30,2020, we we
2020, hadhad
a $3.1 billionbillion
a $3.1 ($1.7 billion,
($1.7€1.0
billion, and £150
billion €1.0 andmulti-currency
million)
billion £150 million) revolving credit facility (the
multi-currency “Revolving
revolving
Facility”) that was drawn in March 2020 for an initial term of six months. The maturities for these borrowings were
credit facility (the “Revolving Facility”) that was drawn in March 2020 for an initial term of six months. The extended in September 2020 for
an additional six months through March 2021. We may re-borrow such amounts through August 2024 subject to satisfaction of the conditions in the facility.
maturities for these borrowings were extended in September 2020 for an additional six months through March 2021.
The Revolving Facility also includes an emissions linked margin adjustment whereby, after the initial applicable margin is set per the margin pricing grid,
We may re-borrow such amounts through August 2024 subject to satisfaction of the conditions in the facility. The
the margin may be adjusted based on performance in achieving certain agreed annual carbon emissions goals. We are required to pay a commitment fee
Revolving
on any undrawn Facility also includes an emissions linked margin adjustment whereby, after the initial applicable margin is
portion.
set per the margin pricing grid, the margin may be adjusted based on performance in achieving certain agreed annual
carbon emissions goals. We are required to pay a commitment fee on any undrawn portion.
footnote
(c) (c):
InIn2019,
2019,these
these notes
notesand
andbank
bankloans werewere
loans unsecured.
unsecured.
F-16
Table of Contents
The above debt tables do not include the impact of our interest rate swaps. The interest rates on some of our debt, and in the
case of our Revolving Facility, fluctuate based on the applicable rating of senior unsecured long-term securities of Carnival
Corporation or Carnival plc. For the year ended November 30, 2020, we had borrowings of $525 million and repayments of
$526 million of commercial paper with original maturities greater than three months. For the year ended November 30, 2019,
we did not have borrowings or repayments of commercial paper with original maturities greater than three months. For the year
ended November 30, 2018, we had borrowings of $2 million and repayments of $2 million of commercial paper with original
maturities greater than three months.
Debt is recorded at initial fair value, which normally reflects the proceeds received by us, net of debt issuance costs, and is
subsequently stated at amortized cost. Debt issuance costs are generally amortized to interest expense using the straight-line
method, which approximates the effective interest method, over the term of the debt. Debt issue discounts and premiums are
generally amortized to interest expense using the effective interest rate method over the term of the debt.
Covenant Compliance
Many of our debt agreements contain one or more financial covenants that require us to:
• Maintain minimum debt service coverage (EBITDA to consolidated net interest charges for the most recently ended
four fiscal quarters) of not less than 3.0 to 1.0 at the end of each fiscal quarter (the “Financial Covenant”)
• Maintain minimum shareholders’ equity of $5.0 billion
• Limit our debt to capital percentage to 65% at the end of each fiscal quarter (the “Debt to Capital Covenant”)
• Limit the amounts of our secured assets as well as secured and other indebtedness
As of November 30, 2020, we had entered into supplemental agreements to amend our agreements with respect to the Financial
Covenant to:
• Waive compliance for all of our export credit facilities through November 30, 2021 or December 31, 2021, as
applicable, with aggregate indebtedness of $7.3 billion as of November 30, 2020. We will be required to comply
beginning with the next testing date of February 28, 2022.
• Waive compliance through November 30, 2021 for certain of our bank loans with aggregate indebtedness of
$2.1 billion as of November 30, 2020. The amendments were subsequently extended through November 30, 2022,
with the applicable covenant threshold reduced beginning from the February 28, 2023 testing date before reverting to
3.0 to 1.0 from the February 28, 2024 testing date onwards.
• Waive compliance for the remaining applicable bank loans with aggregate indebtedness of $479 million as of
November 30, 2020, through their respective maturity dates.
At November 30, 2020, we were in compliance with the applicable debt covenants.
In December 2020, we entered into an amendment agreement to our Revolving Facility. The amendment increased the
maximum percentage for our Debt to Capital Covenant from the testing date on November 30, 2021 through the testing date on
February 28, 2024, introduced a new minimum liquidity covenant (from the testing date of February 28, 2021 to November 30,
2022), introduced the Financial Covenant (from the testing date of February 28, 2023 for the remainder of the term of the
Revolving Facility), and introduced certain other restrictive covenants through November 30, 2024. The amendment also
restricts the granting of guarantees and security interests for certain of our outstanding debt through November 30, 2024. In
January 2021, we entered into amendments which resulted in similar changes to agreements governing our bank loans.
Generally, if an event of default under any debt agreement occurs, then, pursuant to cross default acceleration clauses,
substantially all of our outstanding debt and derivative contract payables could become due, and all debt and derivative
contracts could be terminated. Any financial covenant amendment may lead to increased costs, increased interest rates,
additional restrictive covenants and other available lender protections that would be applicable.
Credit Ratings Update
Since March 2020, Moody’s and S&P Global have downgraded our credit ratings to be non investment grade.
Newbuild Ship Financing
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We have unsecured long-term unfunded export credit ship financings. These facilities, if drawn at the time of ship delivery, are
generally repayable semi-annually over 12 years. We have the option to cancel each one at specified dates prior to the
underlying ship’s delivery date.
2023 First Lien Notes
In April 2020, we issued $4.0 billion aggregate principal amount of 11.5% first-priority senior secured notes due in 2023 (the
“2023 First Lien Notes”). The 2023 First Lien Notes mature on April 1, 2023 unless earlier redeemed or repurchased. Our
obligations under the 2023 First Lien Notes are guaranteed by Carnival plc and certain of our subsidiaries that own or operate
our vessels and material intellectual property, and are secured by collateral, which includes vessels and material intellectual
property with a net book value of $27.8 billion as of November 30, 2020 and certain other assets. Upon the occurrence of
certain change of control events, we are required to offer to repurchase the 2023 First Lien Notes at a price equal to 101% of the
principal amount, plus accrued and unpaid interest to the purchase date.
The indenture governing the 2023 First Lien Notes contains covenants that limit our ability to, among other things: (i) incur
additional indebtedness or issue certain preferred shares; (ii) make dividend payments on or make other distributions in respect
of our capital stock or make other restricted payments; (iii) make certain investments; (iv) sell certain assets; (v) create liens on
assets; (vi) consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; and (vii) enter into certain
transactions with our affiliates. These covenants are subject to a number of important limitations and exceptions.
Convertible Notes
In April 2020, we issued $2.0 billion aggregate principal amount of 5.75% convertible senior notes due 2023 (the “Convertible
Notes”). The Convertible Notes mature on April 1, 2023, unless earlier repurchased or redeemed by us or earlier converted in
accordance with their terms prior to the maturity date. The Convertible Notes are guaranteed on a senior unsecured basis by
Carnival plc, Carnival Finance, LLC and our subsidiaries that guarantee the 2023 First Lien Notes.
The Convertible Notes are convertible by holders, subject to the conditions described below, into cash, shares of Carnival
Corporation common stock, or a combination thereof, at our election. The Convertible Notes have an initial conversion rate of
100 shares of Carnival Corporation common stock per $1,000 principal amount of the Convertible Notes, equivalent to an
initial conversion price of $10 per share of common stock. The initial conversion price is subject to certain anti-dilutive
adjustments and may also increase if the Convertible Notes are converted in connection with a tax redemption or certain
corporate events.
The Convertible Notes are convertible at any time prior to the close of business on the business day immediately preceding
January 1, 2023, only under the following circumstances:
• during any fiscal quarter (and only during such fiscal quarter) if the last reported sale price of the common stock for at
least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last
trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on
each applicable trading day;
• during the five business day period after any five consecutive trading day period (the “measurement period”) in which
the trading price per $1,000 principal amount of Convertible Notes for each trading day of the measurement period
was less than 98% of the product of the last reported sale price per share of common stock and the conversion rate on
each such trading day;
• prior to the close of business on the second scheduled trading day immediately preceding any tax redemption date; or
• upon the occurrence of specified corporate events.
On or after January 1, 2023, until the close of business on the second scheduled trading day immediately preceding the maturity
date, holders may convert their Convertible Notes at any time.
If we undergo certain corporate events (each, a “fundamental change”), subject to certain conditions, holders may require us to
repurchase for cash all or any portion of their Convertible Notes at a price equal to 100% of the principal amount of the
Convertible Notes to be repurchased, plus accrued and unpaid interest to the fundamental change repurchase date.
We may redeem the Convertible Notes, in whole but not in part, at any time on or prior to December 31, 2022 at a redemption
price equal to 100% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, if we or any
guarantor would have to pay any additional amounts on the Convertible Notes due to a change in tax laws, regulations or
rulings or a change in the official application, administration or interpretation thereof.
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Table of Contents
As of November 30, 2020, a condition allowing holders of the Convertible Notes to convert has been met and therefore the
notes are convertible. The holders are entitled to convert all or any portion of their Convertible Notes at any time during the
three months starting on December 1, 2020 and ending on February 28, 2021, at the conversion rate of 100 shares of Carnival
Corporation common stock per $1,000 principal amount of Convertible Notes.
In August 2020, we completed registered direct offering of 99.2 million shares of Carnival Corporation common stock at a
price of $14.02 per share to a limited number of holders of the Convertible Notes (the “August Registered Direct Offering”).
We used the proceeds of the stock offerings to repurchase from such holders $886 million aggregate principal amount of the
Convertible Notes in privately negotiated transactions.
In November 2020, we completed two registered direct offerings of 57.4 million shares and 10.4 million shares of Carnival
Corporation common stock at a price of $18.05 and $17.59 per share, respectively, to a limited number of holders of the
Convertible Notes (the “November Registered Direct Offerings”). We used the proceeds from the stock offering to repurchase
from such holders $590 million aggregate principal amount of the Convertible Notes in privately negotiated transactions.
We recognized a $464 million extinguishment loss as a result of the August and November Registered Direct Offerings in other
income (expense), net.
We account for the Convertible Notes as separate liability and equity components. We determined the carrying amount of the
liability component as the present value of its cash flows.
The carrying amount of the equity component representing the conversion option was $286 million on the date of issuance and
was calculated by deducting the carrying value of the liability component from the initial proceeds from the Convertible Notes.
The excess of the principal amount of the Convertible Notes over the carrying amount of the liability component represents a
debt discount that is amortized to interest expense over the term of the Convertible Notes under the effective interest rate
method using an effective interest rate of 12.9%. The carrying amount of the equity component was reduced to zero in
conjunction with the partial repurchase of Convertible Notes in August 2020 because at the time of repurchase, the fair value of
the equity component for the portion of the Convertible Notes that was repurchased, exceeded the total amount of the equity
component recorded at the time the Convertible Notes were issued.
The net carrying value of the liability component of the Convertible Notes was as follows: (table is in millions)
(in millions) November 30, 2020
Principal $ 537
Less: Unamortized debt discount and transaction costs (76)
$ 461
The interest expense recognized related to the Convertible Notes was as follows: (table is in millions)
Year Ended
(in millions) November 30, 2020
Contractual interest expense $ 58
Amortization of debt discount and transaction costs $ 50
$ 109
We had no Convertible Notes in 2019.
2025 Secured Term Loan
In June 2020, we borrowed an aggregate principal amount of $2.8 billion in two tranches ($1.9 billion and €800 million), under
a first-priority senior secured term loan facility that matures on June 30, 2025 (the "2025 Secured Term Loan"). The U.S. dollar
tranche bears interest at a rate per annum equal to adjusted LIBOR (with a 1% floor) plus 7.5%. The euro tranche bears interest
at a rate per annum equal to EURIBOR (with a 0% floor) plus 7.5%. The 2025 Secured Term Loan is guaranteed by Carnival
plc and the same subsidiaries that currently guarantee, and are secured on a first-priority basis by substantially the same
collateral that currently secures, the 2023 First Lien Notes, the 2026 Second Lien Notes and the 2027 Second Lien Notes. The
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2025 Secured Term Loan contains covenants that are substantially similar to the covenants in the indenture governing the 2023
First Lien Notes. These covenants are subject to a number of important limitations and exceptions.
2026 Second Lien Notes
In July 2020, we issued an aggregate principal amount of $1.3 billion in two tranches ($775 million and €425 million), under
second-priority senior secured notes that mature on February 1, 2026 (the "2026 Second Lien Notes"). The U.S. dollar tranche
bears interest at a rate of 10.5% per year. The euro tranche bears interest at a rate of 10.1% per year. The 2026 Second Lien
Notes are guaranteed by Carnival plc and the same subsidiaries that currently guarantee, and are secured on a second-priority
basis by substantially the same collateral that currently secures, the 2023 First Lien Notes, the 2025 Secured Term Loan and the
2027 Second Lien Notes. The indenture governing the 2026 Second Lien Notes contains covenants that are substantially similar
to the covenants in the indenture governing the 2023 First Lien Notes and the 2027 Second Lien Notes. These covenants are
subject to a number of important limitations and exceptions.
2027 Second Lien Notes
In August 2020, we issued an aggregate principal amount of $900 million of second-priority senior secured notes that mature on
August 1, 2027 (the "2027 Second Lien Notes"). The 2027 Second Lien Notes bear interest at a rate of 9.9% per year. The 2027
Second Lien Notes are guaranteed by Carnival plc and the same subsidiaries that currently guarantee, and are secured on a
second-priority basis by substantially the same collateral that currently secures, the 2023 First Lien Notes, the 2025 Secured
Term Loan and the 2026 Second Lien Notes. The indenture governing the 2027 Second Lien Notes contains covenants that are
substantially similar to the covenants in the indenture governing the 2023 First Lien Notes and the 2026 Second Lien Notes.
These covenants are subject to a number of important limitations and exceptions.
2026 Senior Unsecured Notes
In November 2020, we issued an aggregate principal amount of $2.0 billion in two tranches $1.5 billion and €500 million)
under senior unsecured notes that mature on March 1, 2026 (the “2026 Senior Unsecured Notes”). The U.S dollar tranche bears
interest at a rate of 7.6% per year. The euro tranche bears interest at a rate of 7.6% per year. The 2026 Senior Unsecured Notes
are guaranteed by Carnival plc and the same subsidiaries that currently guarantee the 2023 First Lien Notes, 2026 Second Lien
Notes and the 2027 Second Lien Notes and are unsecured. The 2026 Senior Unsecured Notes contains covenants that are
substantially similar to the covenants in the indentures governing the 2023 First Lien Notes, 2026 Second Lien Notes and the
2027 Second Lien Notes. These covenants are subject to a number of important limitations and exceptions.
Modifications and Other
Certain export credit agencies have offered 12-month debt amortization and a financial covenant holiday (“Debt Holiday”). In
2020, we have entered into supplemental agreements or side letters for Debt Holiday amendments to defer certain principal
repayments otherwise due through March 31, 2021, except for one export credit facility with a deferral period through April 30,
2021, through the creation of separate tranches of loans with repayments made over the following four years.
During the year-ended November 30, 2020, we recognized a gain on early extinguishment of debt of $5 million that is included
in other income (expense), net in the accompanying Consolidated Statements of Income (Loss).
NOTE 6 – Commitments (table is in millions)
Fiscal
(in millions) 2021 2022 2023 2024 2025 Thereafter Total
New ship growth capital $ 3,201 $ 4,692 $ 3,273 $ 793 $ 1,076 $ — $ 13,036
Other long-term commitments 219 98 54 52 37 18 478
$ 3,421 $ 4,790 $ 3,327 $ 845 $ 1,113 $ 18 $ 13,515
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NOTE 7 – Contingencies
Litigation
We are routinely involved in legal proceedings, claims, disputes, regulatory matters and governmental inspections or
investigations arising in the ordinary course of or incidental to our business, including those noted below. Additionally, as a
result of the impact of COVID-19, litigation claims, enforcement actions, regulatory actions and investigations, including, but
not limited to, those arising from personal injury and loss of life, have been and may, in the future, be asserted against us. We
expect many of these claims and actions, or any settlement of these claims and actions, to be covered by insurance and
historically the maximum amount of our liability, net of any insurance recoverables, has been limited to our self-insurance
retention levels.
We record provisions in the consolidated financial statements for pending litigation when we determine that an unfavorable
outcome is probable and the amount of the loss can be reasonably estimated.
Legal proceedings and government investigations are subject to inherent uncertainties, and unfavorable rulings or other events
could occur. Unfavorable resolutions could involve substantial monetary damages. In addition, in matters for which conduct
remedies are sought, unfavorable resolutions could include an injunction or other order prohibiting us from selling one or more
products at all or in particular ways, precluding particular business practices or requiring other remedies. An unfavorable
outcome might result in a material adverse impact on our business, results of operations, financial position or liquidity.
As previously disclosed, on May 2, 2019, two lawsuits were filed against Carnival Corporation in the U.S. District Court for the
Southern District of Florida under Title III of the Cuban Liberty and Democratic Solidarity Act, also known as the Helms-
Burton Act, claiming ownership of commercial waterfront real property we own and use at the Havana docks and seeking
damages, including treble damages. On July 9, 2020, the court granted our motion for judgment on the pleadings in the action
filed by Javier Garcia Bengochea, and dismissed the plaintiff’s action with prejudice. On August 6, 2020, Bengochea filed a
notice of appeal. On September 14, 2020, the court denied our motion to dismiss the amended action filed by Havana Docks
Corporation. We filed an answer to the amended complaint on September 25, 2020. The plaintiff filed a second amended
complaint on October 27, 2020, and we filed an answer on November 10, 2020. We continue to believe we have a meritorious
defense to these actions and we believe that any liability which may arise as a result of these actions will not have a material
impact on our consolidated financial statements.
Contingent Obligations – Indemnifications
Some of the debt contracts we enter into include indemnification provisions obligating us to make payments to the counterparty
if certain events occur. These contingencies generally relate to changes in taxes or changes in laws which increase the lender’s
costs. There are no stated or notional amounts included in the indemnification clauses, and we are not able to estimate the
maximum potential amount of future payments, if any, under these indemnification clauses.
Other Contingencies
We have agreements with a number of credit card processors that transact customer deposits related to our cruise vacations.
Certain of these agreements allow the credit card processors to request under certain circumstances that we provide a reserve
fund in cash. Although the agreements vary, these requirements may generally be satisfied either through a withheld percentage
of customer payments or providing cash funds directly to the card processor. As of November 30, 2020, we had $377 million of
customer deposits withheld to satisfy these requirements. We expect the funds withheld under these agreements will be
approximately $60 million per month up to a maximum of $600 million. Additionally, during 2020, we placed $166 million of
cash collateral in escrow and provided $46 million in reserve funds, these amounts are included within other assets.
COVID-19 Actions
We have been named in a number of actions related to COVID-19. The following purported class actions have been brought by
former guests from Ruby Princess, Diamond Princess, Grand Princess, Coral Princess, Costa Luminosa or Zaandam. These
actions seek compensation based on a variety of tort claims, including, but not limited to, negligence and failure to warn,
physical injuries and severe emotional distress associated with being exposed and/or contracting COVID-19 onboard. Below
are material updates to the previously disclosed class actions and individual actions.
Previously Disclosed Class Actions
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As previously disclosed, on April 7, 2020, Paul Turner, a former guest from Costa Luminosa, filed a purported class action
against Costa Crociere, S.p.A. (“Costa”) and Costa Cruise Line, Inc. in the U.S. District Court of the Southern District of
Florida. On September 10, 2020, the court granted Costa’s motion to dismiss based upon forum non conveniens, and directed
that the action be filed in Italy. The plaintiff has appealed the order, and the appeal is pending in the Court of Appeals for the
th
11 Circuit.
As previously disclosed, on April 8, 2020, numerous former guests from Grand Princess filed a purported class action against
Carnival Corporation and Carnival plc and two of our subsidiaries, Princess Cruise Lines, Ltd. (“Princess Cruises”) and Fairline
Shipping International Corporation, Ltd. The plaintiffs ultimately removed Fairline Shipping from the case. On September 22,
2020, the court granted our motions to dismiss the plaintiffs’ second amended complaint in part. The court granted our motion
to dismiss the plaintiffs’ negligence-based claims without prejudice and with leave to amend and granted our motion to dismiss
the plaintiffs’ request for injunctive relief without prejudice. The court denied our motion to dismiss plaintiffs’ claims for
intentional infliction of emotional distress. On October 2, 2020, the plaintiffs filed a third amended complaint. On October 20,
2020, the court denied plaintiffs’ motion for class certification, and the plaintiffs filed a petition for leave to appeal this ruling to
the Ninth Circuit Court of Appeals on November 3, 2020. The petition for leave to appeal is pending. On November 25, 2020,
the court granted in part and denied in part our motion to dismiss, allowing the negligence claims of those individual plaintiffs
who claim to have contracted COVID-19 or to have experienced COVID-19 symptoms to proceed against Carnival
Corporation, Carnival plc and Princess Cruises and dismissing the claims of those plaintiffs who did not allege contracting
COVID-19 with prejudice. The court also dismissed the plaintiffs’ claims for injunctive relief with prejudice. On December 9,
2020, we filed an answer to the plaintiffs’ third amended complaint. On December 28, 2020, the parties filed a request for
private mediation.
As previously disclosed, on May 27, 2020, Service Lamp Corporation Profit Sharing Plan filed a purported class action against
Carnival Corporation, Arnold W. Donald and David Bernstein on behalf of all purchasers of Carnival Corporation securities
between January 28 and May 1, 2020. As previously disclosed, on June 3, 2020, John P. Elmensdorp filed a purported class
action against the same defendants, and included Micky Arison as a defendant. This action is on behalf of all purchasers of
Carnival Corporation securities between September 26, 2019 and April 30, 2020. These actions allege that the defendants
violated Sections 10(b) and 20(a) of the U.S. Securities and Exchange Act of 1934 by making misrepresentations and omissions
related to Carnival Corporation’s COVID-19 knowledge and response, and seek to recover unspecified damages and equitable
relief for the alleged misstatements and omissions. On July 21, 2020, Abraham Atachbarian filed a purported class action
against the same defendants as the Elmensdorp action. The Atachbarian action is on behalf of all purchasers of Carnival
Corporation options between January 27 and May 1, 2020 and allege the same set of factual theories presented in the class
actions described above. These three cases have been consolidated with a new lead plaintiff, the New England Carpenters
Pension and Guaranteed Annuity Fund and the Massachusetts Laborers’ Pension and Annuity Fund, and a consolidated class
action complaint was filed on December 15, 2020, which also removed Micky Arison and David Bernstein as defendants. A
motion to dismiss was filed on January 18, 2021.
As previously disclosed, on June 4, 2020, another group of former guests from Grand Princess filed a purported class action
against Carnival Corporation, Carnival plc, and Princess Cruises in the U.S. District Court for the Central District of California,
seeking compensation based on largely the same factual theories presented in the class action described above. The action
asserts claims for negligence, gross negligence, negligent infliction of emotional distress and intentional infliction of emotional
distress. On November 23, 2020, a motion to dismiss plaintiff’s amended action was filed and the briefing is now complete.
As previously disclosed, on June 4, 2020, numerous former guests from Ruby Princess filed a purported class action against
Princess Cruises. Princess Cruises filed a motion to dismiss, in response to which the plaintiffs amended their action to remove
their class action allegations and seek recovery on behalf of two guests who allege that they contracted COVID-19 while on
Ruby Princess. Princess Cruises filed a motion to dismiss the amended complaint. On October 12, 2020, plaintiffs filed a
second amended complaint, to which Princess Cruises filed an answer on October 26, 2020.
As previously disclosed, on June 24, 2020, Leonard C. Lindsay and Carl E.W. Zehner, former guests from Zaandam, filed a
purported class action against Carnival Corporation, Carnival plc and Holland America Line N.V. On September 11, 2020, the
plaintiffs filed an amended class action on behalf of all persons in the U.S. who were guests from Zaandam who embarked on
March 8, 2020. Carnival Corporation, Carnival plc and Holland America Line N.V have filed a motion to dismiss on November
20, 2020. On December 11, 2020, plaintiffs filed their response, to which we filed our reply on December 24, 2020.
As previously disclosed, on July 13, 2020, Kathleen O’Neill, a former guest from Coral Princess filed a purported class action
in the U.S. District Court for the Central District of California against Princess Cruises, Carnival Corporation, and Carnival plc.
We have filed a motion to dismiss. This case is currently stayed and is pending resolution of the appeal by the plaintiffs in the
Grand Princess class action of the court’s denial of the plaintiffs’ motion for class certification, Archer et al v. Carnival
Corporation and plc et al.
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As previously disclosed, on July 13, 2020, another group of former guests from Grand Princess filed a purported class action in
the U.S. District Court for the Central District of California against Princess Cruises, Carnival Corporation and Carnival plc. On
November 23, 2020, a motion to dismiss the plaintiff’s amended action was filed and the briefing is now complete.
As previously disclosed, on July 23, 2020, Susan Karpik, a former guest from Ruby Princess filed a purported class action
against Carnival plc and Princess Cruises in the Federal Court of Australia On December 14, 2020, we filed an interlocutory
appeal.
We believe that all the claims asserted in the above class actions are without merit and are taking proper actions to defend
against them.
Individual Actions
Since March 9, 2020, more than 100 former U.S. guests who sailed onboard various vessels, including, but not limited to,
Diamond Princess, Grand Princess, Ruby Princess, Coral Princess or Zaandam, filed individual actions against Princess
Cruises and, in some actions, also against Carnival Corporation and/or Carnival plc, Costa and Holland America Line,
including actions previously disclosed. Both the previously disclosed and newly filed actions include tort claims based on a
variety of theories, including negligence and failure to warn. The plaintiffs in these actions allege a variety of injuries: some
plaintiffs allege only emotional distress, while others allege injuries arising from testing positive for COVID-19. A smaller
number of actions include wrongful death claims.
Previously Disclosed Individual Actions
Princess Cruises has filed motions to dismiss in all other matters in which a responsive pleading has been due. Several courts
have granted the various motions to dismiss, with leave for the plaintiffs to amend.
As previously disclosed, between April 7 and July 7, 2020, former U.S. guests from Costa Luminosa filed individual actions
against Costa in the U.S. District Court for the Southern District of Florida or the Circuit Court in and for the 11th Judicial
Circuit in and for Miami-Dade County. These actions have been voluntarily dismissed with and without prejudice, respectively.
The action brought in the U.S. District Court for the Southern District of Florida may be pursued in Italy.
As previously disclosed, on June 30, 2020, Kenneth and Nora Hook, former guests from Zaandam, filed an action against
Holland America Line N.V. The court denied the plaintiff’s motion for an expedited trial date and Holland America’s motion to
dismiss. The case is currently scheduled for a bench trial on November 15, 2021.
As previously disclosed, on July 16, 2020, Toyling Maa, individually and as personal representative of the estate of Wilson
Maa, a former guest from Coral Princess, and the estate of Wilson Maa, filed an action in the U.S. District Court for the Central
District of California against Carnival Corporation, Carnival plc and Princess Cruises seeking compensation for damages for
Ms. Maa allegedly contracting COVID-19 and alleging wrongful death as a result of Mr. Maa contracting COVID-19. The
action asserts claims for negligence. On September 21, 2020, the court denied the plaintiffs’ motion to remand and granted
defendants’ motion to dismiss without prejudice and with leave to amend. On November 30, 2020, plaintiffs filed an amended
complaint and the defendants filed a motion to dismiss on December 14, 2020.
As previously disclosed, on July 23, 2020, an action was filed on behalf of the estate of Carl Weidner, a former guest from
Grand Princess, in the U.S. District Court for the Northern District of California against Carnival Corporation, Carnival plc and
Princess Cruises seeking compensation based on a claim alleging wrongful death as a result of contracting COVID-19. The
action asserts claims for negligence. The action also alleges that the forum selection clause in the guest’s ticket contract that
specifies venue in the Central District of California is unenforceable. Carnival Corporation, Carnival plc and Princess Cruises
filed a motion to dismiss and a motion to transfer venue to the Central District of California on October 5, 2020. On January 8,
2021, the court granted the motion to transfer the case to the Central District of California.
Newly Filed Individual Actions
Costa has been named in several individual actions filed in France, Italy and Brazil. These actions are in their preliminary
stages and potential damages are not yet known. We believe, however, that the claims asserted in these actions are without
merit and are taking proper actions to defend against them.
All the above individual actions seek monetary and punitive damages but do not specify exact amounts. We are taking proper
actions to defend against them.
Governmental Inquiries and Investigations
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Federal and non-U.S. governmental agencies and officials are investigating or otherwise seeking information, testimony and/or
documents, regarding COVID-19 incidents and related matters. We are investigating these matters internally and are
cooperating with all requests. The investigations could result in the imposition of civil and criminal penalties in the future.
NOTE 8 – Taxation
A summary of our principal taxes and exemptions in the jurisdictions where our significant operations are located is as follows:
U.S. Income Tax
We are primarily foreign corporations engaged in the business of operating cruise ships in international transportation. We also
own and operate, among other businesses, the U.S. hotel and transportation business of Holland America Princess Alaska Tours
through U.S. corporations.
Our North American cruise ship businesses and certain ship-owning subsidiaries are engaged in a trade or business within the
U.S. Depending on its itinerary, any particular ship may generate income from sources within the U.S. We believe that our U.S.
source income and the income of our ship-owning subsidiaries, to the extent derived from, or incidental to, the international
operation of a ship or ships, is currently exempt from U.S. federal income and branch profit taxes.
Our domestic U.S. operations, principally the hotel and transportation business of Holland America Princess Alaska Tours, are
subject to federal and state income taxation in the U.S.
In general, under Section 883 of the Internal Revenue Code, certain non-U.S. corporations (such as our North American cruise
ship businesses) are not subject to U.S. federal income tax or branch profits tax on U.S. source income derived from, or
incidental to, the international operation of a ship or ships. Applicable U.S. Treasury regulations provide in general that a
foreign corporation will qualify for the benefits of Section 883 if, in relevant part, (i) the foreign country in which the foreign
corporation is organized grants an equivalent exemption to corporations organized in the U.S. in respect of each category of
shipping income for which an exemption is being claimed under Section 883 (an “equivalent exemption jurisdiction”) and (ii)
the foreign corporation meets a defined publicly-traded corporation stock ownership test (the “publicly-traded test”).
Subsidiaries of foreign corporations that are organized in an equivalent exemption jurisdiction and meet the publicly-traded test
also benefit from Section 883. We believe that Panama is an equivalent exemption jurisdiction and that Carnival Corporation
currently satisfies the publicly-traded test under the regulations. Accordingly, substantially all of Carnival Corporation’s income
is exempt from U.S. federal income and branch profit taxes.
Regulations under Section 883 list certain activities that the IRS does not consider to be incidental to the international operation
of ships and, therefore, the income attributable to such activities, to the extent such income is U.S. source, does not qualify for
the Section 883 exemption. Among the activities identified as not incidental are income from the sale of air transportation,
transfers, shore excursions and pre- and post-cruise land packages to the extent earned from sources within the U.S.
We believe that the U.S. source transportation income earned by Carnival plc and its subsidiaries currently qualifies for
exemption from U.S. federal income tax under applicable bilateral U.S. income tax treaties.
Carnival Corporation and Carnival plc and certain of their subsidiaries are subject to various U.S. state income taxes generally
imposed on each state’s portion of the U.S. source income subject to U.S. federal income taxes. However, the state of Alaska
imposes an income tax on its allocated portion of the total income of our companies doing business in Alaska and certain of
their subsidiaries.
UK and Australian Income Tax
Cunard, P&O Cruises (UK) and P&O Cruises (Australia) are divisions of Carnival plc and have elected to enter the UK tonnage
tax under a rolling ten-year term and, accordingly, reapply every year. Companies to which the tonnage tax regime applies pay
corporation taxes on profits calculated by reference to the net tonnage of qualifying ships. UK corporation tax is not chargeable
under the normal UK tax rules on these brands’ relevant shipping income. Relevant shipping income includes income from the
operation of qualifying ships and from shipping related activities.
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For a company to be eligible for the regime, it must be subject to UK corporation tax and, among other matters, operate
qualifying ships that are strategically and commercially managed in the UK. Companies within UK tonnage tax are also subject
to a seafarer training requirement.
Our UK non-shipping activities that do not qualify under the UK tonnage tax regime remain subject to normal UK corporation
tax.
P&O Cruises (Australia) and all of the other cruise ships operated internationally by Carnival plc for the cruise segment of the
Australian vacation region are exempt from Australian corporation tax by virtue of the UK/Australian income tax treaty.
Italian and German Income Tax
In 2015, Costa and AIDA re-elected to enter the Italian tonnage tax regime through 2024 and can reapply for an additional ten-
year period beginning in early 2025. Companies to which the tonnage tax regime applies pay corporation taxes on shipping
profits calculated by reference to the net tonnage of qualifying ships.
Most of Costa’s and AIDA’s earnings that are not eligible for taxation under the Italian tonnage tax regime will be taxed at an
effective tax rate of 4.8% in 2020 and 2019.
Substantially all of AIDA’s earnings are exempt from German income taxes by virtue of the Germany/Italy income tax treaty.
Asian Countries Income Taxes
Substantially all of our brands’ income from their international operations in Asian countries is exempt from income tax by
virtue of relevant income tax treaties.
Other
We recognize income tax provisions for uncertain tax positions, based solely on their technical merits, when it is more likely
than not to be sustained upon examination by the relevant tax authority. The tax benefit to be recognized is measured as the
largest amount of benefit that is greater than 50% likely of being realized upon ultimate resolution. Based on all known facts
and circumstances and current tax law, we believe that the total amount of our uncertain income tax position liabilities and
related accrued interest are not material to our financial position. All interest expense related to income tax liabilities is included
in income tax expense.
In addition to or in place of income taxes, virtually all jurisdictions where our ships call impose taxes, fees and other charges
based on guest counts, ship tonnage, passenger capacity or some other measure, and these taxes, fees and other charges are
included in commissions, transportation and other costs and other operating expenses.
NOTE 9 – Shareholders’ Equity
Share Repurchase Program
Under a share repurchase program effective 2004, we had been authorized to repurchase Carnival Corporation common stock
and Carnival plc ordinary shares (the “Repurchase Program”). On June 15, 2020, to enhance our liquidity and comply with
restrictions in our recent financing transactions, the Boards of Directors terminated the Repurchase Program.
Carnival Corporation Carnival plc
Dollar Amount Paid Dollar Amount Paid
Number of Shares for Shares Number of Shares for Shares
(in millions) Repurchased Repurchased Repurchased Repurchased
2020 — $ — 0.2 $ 10
2019 0.6 $ 26 12.2 $ 569
2018 7.8 $ 476 16.3 $ 985
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Accumulated Other Comprehensive Income (Loss)
AOCI
November 30,
(in millions) 2020 2019
Cumulative foreign currency translation adjustments, net $ (1,382) $ (1,961)
Unrecognized pension expenses (95) (88)
Net losses on cash flow derivative hedges 41 (18)
$ (1,436) $ (2,066)
During 2020, 2019 and 2018, there were $3 million, $5 million and $5 million of unrecognized pension expenses that were
reclassified out of accumulated other comprehensive loss and were included within payroll and related expenses and selling and
administrative expenses.
Dividends
To enhance our liquidity, as well as comply with the dividend restrictions contained in our debt agreements, we suspended the
payment of dividends on the common stock of Carnival Corporation and the ordinary shares of Carnival plc. We declared
quarterly cash dividends on all of our common stock and ordinary shares as follows:
Quarters Ended
(in millions, except per share data) February 28 May 31 August 31 November 30
2020
Dividends declared per share $ 0.50 $ — $ — $ —
Dividends declared $ 342 $ — $ — $ —
2019
Dividends declared per share $ 0.50 $ 0.50 $ 0.50 $ 0.50
Dividends declared $ 345 $ 346 $ 342 $ 346
2018
Dividends declared per share $ 0.45 $ 0.50 $ 0.50 $ 0.50
Dividends declared $ 322 $ 357 $ 350 $ 349
Carnival Corporation’s Articles of Incorporation authorize its Board of Directors, at its discretion, to issue up to 40 million
shares of preferred stock. At November 30, 2020 and 2019, no Carnival Corporation preferred stock or Carnival plc preference
shares had been issued.
Public Equity Offerings
In April 2020, we completed a public offering of 71.9 million shares of Carnival Corporation’s common stock at a price per
share of $8.00, resulting in net proceeds of $556 million.
In October 2020, we completed our $1.0 billion “at-the-market” (“ATM”) equity offering program that was announced on
September 15, 2020, pursuant to which we sold 67.1 million shares of Carnival Corporation common stock.
In November 2020, we completed our $1.5 billion ATM equity offering program that was announced on November 10, 2020,
pursuant to which we sold 94.5 million shares of Carnival Corporation common stock.
NOTE 10 – Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks
Fair Value Measurements
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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
November 30, 2020 November 30, 2019
Carrying Fair Value Carrying Fair Value
(in millions) Value Level 1 Level 2 Level 3 Value Level 1 Level 2 Level 3
Assets
Long-term other assets (a) $ 45 $ — $ 17 $ 18 $ 181 $ — $ 31 $ 149
Total $ 45 $ — $ 17 $ 18 $ 181 $ — $ 31 $ 149
Liabilities
Fixed rate debt (b) $ 15,547 $ — $ 16,258 $ — $ 7,438 $ — $ 7,782 $ —
Floating rate debt (b) 12,034 — 11,412 — 4,195 — 4,248 —
Total $ 27,581 $ — $ 27,670 $ — $ 11,634 $ — $ 12,030 $ —
(a) Long-term other assets are comprised of notes receivable, which at November 30, 2019, included loans on ship sales.
The fair values of our Level 2 notes receivable were based on estimated future cash flows discounted at appropriate
market interest rates. The fair values of our Level 3 notes receivable were estimated using risk-adjusted discount rates.
(b) The debt amounts above do not include the impact of interest rate swaps or debt issuance costs. The fair values of our
publicly-traded notes were based on their unadjusted quoted market prices in markets that are not sufficiently active to be
Level 1 and, accordingly, are considered Level 2. The fair values of our other debt were estimated based on current
market interest rates being applied to this debt.
Financial Instruments that are Measured at Fair Value on a Recurring Basis
November 30, 2020 November 30, 2019
(in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Assets
Cash and cash equivalents $ 9,513 $ — $ — $ 518 $ — $ —
Restricted cash 179 — — 13 — —
Derivative financial instruments — — — — 58 —
Total $ 9,692 $ — $ — $ 530 $ 58 $ —
Liabilities
Derivative financial instruments $ — $ 10 $ — $ — $ 25 $ —
Total $ — $ 10 $ — $ — $ 25 $ —
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values reporting
of two of our units
Northand two of&
America our Europe & Asia
Australia (“NAA”) (“EA”) segment
segment reporting
reporting and no
unitsunits Europe &their
ourexceeded
longer
two of Asia
carrying
(“EA”) values.
segment We reporting
recognized goodwill
units impairment
no longer exceededcharges
their of $2.1 billion
carrying values.andWehave no remaining
recognized goodwill
goodwill for those
impairment reporting
charges of units.
As of July
$2.1 31, 2020,
billion and we performed
have no our annual
remaining goodwill
goodwill for andreporting
those trademark impairment
units. As reviews
of July and we
31, 2020, we determined
performed our there was no
annual incremental
goodwill
and
impairmenttrademark impairment
for goodwill reviewsat
or trademarks andourwe determined
annual there
test date. wasresult
As a no of the
incremental impairment
extended pause in goodwill or
foroperations, performedat our
wetrademarks
an annual test date.
additional As a result
quantitative goodwillof the extendedreview
impairment pausefor
in all
operations,
remaining wereporting
performed anas of
units additional quantitative
November we impairment
goodwill
30, 2020 and determined
review
there was no for all remaining
incremental reporting for
impairment units as of November 30, 2020 and we determined there was no incremental impairment for
goodwill.
goodwill.
July
As ofAs 31, 2019
of July and 2018,
31, 2019 we performed
and 2018, our annual
we performed goodwill
our annual and trademark
goodwill impairment
and trademark reviews
impairment and we
reviews determined
and there there
we determined was no impairment
for was
goodwill
no or trademarks.
impairment for goodwill or trademarks.
As of November
As of November30,30,2019, weperformed
2019, we performedan an additional
additional goodwill
goodwill impairment
impairment review
review for our for our
Costa million$435 million
$435 unit,
reporting
Costa unit,
reporting
of of
goodwill recorded,
goodwill recorded,and we determined
and we determined there
there was no
was no impairment
impairment for for goodwill.
goodwill.
determination
TheThe of the
determination fair fair
of the value of our
value of reporting units’units’
our reporting and trademarks includes
and trademarks numerous
includes assumptions
numerous assumptions are subject
that that to various
are subject to risks
andvarious
uncertainties. Our pause in guest cruise operations and the possibility of further extensions created some
risks and uncertainties. Our pause in guest cruise operations and the possibility of further extensions created some uncertainty in forecasting
theuncertainty
operating results and future
in forecasting thecash flows used
operating resultsinand
our future
impairment analyses.
cash flows usedThe principal
in our assumptions,
impairment analyses.allThe
of which are considered
principal
Level 3 inputs, used
assumptions, all ofin our
whichcashareflow analyses
considered consisted
Level of: used in our cash flow analyses consisted of:
3 inputs,
• The
• timing
The of our of
timing return
our to service,
return changes in
to service, market
changes conditions
in market and port
conditions or port
and otheror other
estrictions
restrictions
• • Forecasted
Forecasted revenues
revenues net of net of
our most our most
significant significant
variable variable
costs, which costs,
are travel which
agent are travel
commissions, agent
costs commissions,
of air and other transportation, air and
costs ofand certain other
costs that are
otherdirectly associated with
transportation, andonboard
certainand other
other revenues
costs including
that are credit and
directly debit card
associated feesonboard and other revenues including
with
credit and debit card fees
The of
allocation
• allocation
• The ofand
new ships newtheships andthe
timing of thetransfer
timingor of
salethe transfer
of ships or sale
amongst of as
ships
brands, amongst
well as brands, as
the estimated fromthe
well as
proceeds estimated
ship sales
proceeds from ship sales
• • Weighted-average
Weighted-average cost
cost of capital of of capital of
market market
participants, participants,
adjusted for the riskadjusted
attributablefor the risk
to the attributable
geographic towhich
regions in geographic
the these regions
cruise brands in
operate
which these cruise brands operate
We believe that wethat
We believe havewe
made
havereasonable estimates and
made reasonable judgments.
estimates A change
and in the principal
judgments. A change assumptions, which influences
in the principal the determination
assumptions, of fair value, may result
which influences
in a the
needdetermination
to recognize an additional
of fair value, may result in a need to recognize an additional impairment charge. Refer to Note 2 - “Summaryfor
impairment charge. Refer to Note 2 - “Summary of Significant Accounting Policies, Preparation of Financial Statements”
additional discussion.
of Significant Accounting Policies, Preparation of Financial Statements” for additional discussion.
(in millions) Goodwill Goodwill
(in millions) NAA Segment NAA Segment EAEA
Segment
Segment Total Total
At November 30, 201830, 2018
At November $ 1,898 $ 1,898 $$1,027 1,027 $ $2,925 2,925
ForeignForeign
currencycurrency
translation adjustment
translation adjustment — — (13) (13) (13) (13)
At November 30, 2019 1,898
At November 30, 2019 1,898 1,014 1,014 2,912 2,912
Impairment chargescharges
Impairment (1,319) (1,319) (777) (777) (2,096) (2,096)
ForeignForeign
currencycurrency
translation adjustment
translation adjustment — — (9) (9) (9) (9)
At November
At 30, 202030, 2020
November $ 579 $ 579 $$228 228 $ $807 807
(in millions) Trademarks
Trademarks
(in millions) NAA Segment NAA Segment EAEA
Segment
Segment Total Total
At November 30, 2018 30, 2018
At November $ 927 $ $
927 $ 242 242 $$1,169 1,169
Foreign Foreign
currencycurrency
translation adjustment
translation adjustment — — (2) (2) (2) (2)
At November
At 30, 2019 30, 2019
November 927 927 240 240 1,167 1,167
Foreign Foreign
currencycurrency
translation adjustment
translation adjustment — — 13 13 13 13
At November 30, 2020 30, 2020
At November $ 927 $ $
927 $ 253 253 $$ 1,180 1,180
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Impairments of Ships
We review our long-lived assets for impairment whenever events or circumstances indicate potential impairment. As a result of
the effect of COVID-19 on our expected future operating cash flows and our decisions to dispose of certain ships, we
determined certain impairment triggers had occurred. Accordingly, we performed undiscounted cash flow analyses on certain
ships in our fleet throughout 2020. Based on these undiscounted cash flow analyses, we determined that certain ships,
specifically those being disposed of, had net carrying values that exceeded their estimated undiscounted future cash flows. We
determined the fair values of these ships based on their estimated selling value. We then compared these estimated fair values to
the net carrying values and, as a result, we recognized ship impairment charges of $1.5 billion and $0.3 billion in our NAA and
EA segments, respectively, during 2020. We did not recognize ship impairment charges during 2019 and 2018. The principal
assumptions, all of which are considered level 3 inputs, used in our cash flow analyses consisted of:
• Timing of the respective ship’s return to service, changes in market conditions and port or other restrictions
• Forecasted ship revenues net of our most significant variable costs, which are travel agent commissions, costs of air
and other transportation and certain other costs that are directly associated with onboard and other revenues, including
credit and debit card fees
• Timing of the sale of ships and estimated proceeds
Refer to Note 2 - “Summary of Significant Accounting Policies, Preparation of Financial Statements” for additional discussion.
Derivative Instruments and Hedging Activities
November 30,
(in millions) Balance Sheet Location 2020 2019
Derivative assets
Derivatives designated as hedging instruments
Cross currency swaps (a) Prepaid expenses and other $ — $ 32
Other assets — 25
Total derivative assets $ — $ 58
Derivative liabilities
Derivatives designated as hedging instruments
Cross currency swaps (a) Accrued liabilities and other $ — $ 1
Other long-term liabilities — 9
Foreign currency zero cost collars (b) Accrued liabilities and other — 1
Interest rate swaps (c) Accrued liabilities and other 5 6
Other long-term liabilities 5 9
Total derivative liabilities $ 10 $ 25
(a) At November 30, 2020, we had no cross currency swaps. At November 30, 2019, we had cross currency swaps totaling
$1.9 billion that are designated as hedges of our net investments in foreign operations with a euro-denominated
functional currency.
(b) At November 30, 2020, we had foreign currency derivatives consisting of foreign currency zero cost collars that are
designated as foreign currency cash flow hedges for a portion of our euro-denominated shipbuilding payments. See
“Newbuild Currency Risks” below for additional information regarding these derivatives.
(c) We have interest rate swaps designated as cash flow hedges whereby we receive floating interest rate payments in
exchange for making fixed interest rate payments. These interest rate swap agreements effectively changed $248 million
at November 30, 2020 and $300 million at November 30, 2019 of EURIBOR-based floating rate euro debt to fixed rate
euro debt. At November 30, 2020, these interest rate swaps settle through 2025.
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Our derivative contracts include rights of offset with our counterparties. We have elected to net certain of our derivative assets
and liabilities within counterparties.
November 30, 2020
Gross Amounts Total Net Amounts Gross Amounts
Gross Offset in the Presented in the not Offset in the
(in millions) Amounts Balance Sheet Balance Sheet Balance Sheet Net Amounts
Assets $ — $ — $ — $ — $ —
Liabilities $ 10 $ — $ 10 $ — $ 10
November 30, 2019
Gross Amounts Total Net Amounts Gross Amounts
Gross Offset in the Presented in the not Offset in the
(in millions) Amounts Balance Sheet Balance Sheet Balance Sheet Net Amounts
Assets $ 58 $ — $ 58 $ (4) $ 54
Liabilities $ 25 $ — $ 25 $ (4) $ 21
The effect of our derivatives qualifying and designated as hedging instruments recognized in other comprehensive income
(loss) and in income was as follows:
November 30,
(in millions) 2020 2019 2018
Gains (losses) recognized in AOCI:
Cross currency swaps – net investment hedges - included component $ 131 $ 43 $ 18
Cross currency swaps – net investment hedges - excluded component $ (1) $ 1 $ —
Foreign currency zero cost collars – cash flow hedges $ 1 $ (1) $ (12)
Foreign currency forwards - cash flow hedges $ 53 $ — $ —
Interest rate swaps – cash flow hedges $ 6 $ 3 $ 6
Gains (losses) reclassified from AOCI – cash flow hedges:
Interest rate swaps – Interest expense, net of capitalized interest $ (6) $ (7) $ (10)
Foreign currency zero cost collars - Depreciation and amortization $ 1 $ 1 $ 1
Gains (losses) recognized on derivative instruments (amount excluded from
effectiveness testing – net investment hedges)
Cross currency swaps – Interest expense, net of capitalized interest $ 12 $ 23 $ —
The amount of estimated cash flow hedges’ unrealized gains and losses that are expected to be reclassified to earnings in the
next twelve months is not material.
Financial Risk
Fuel Price Risks
We manage our exposure to fuel price risk by managing our consumption of fuel. Substantially all of our exposure to market
risk for changes in fuel prices relates to the consumption of fuel on our ships. We manage fuel consumption through ship
maintenance practices, modifying our itineraries and implementing innovative technologies.
(in millions) November 30, 2018
Unrealized gains on fuel derivatives, net $ 94
Realized losses on fuel derivatives, net (35)
Gains (losses) on fuel derivatives, net $ 59
There were no unrealized or realized gains or losses on fuel derivatives for the period ended November 30, 2020 and 2019.
Foreign Currency Exchange Rate Risks
Overall Strategy
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We manage our exposure to fluctuations in foreign currency exchange rates through our normal operating and financing
activities, including netting certain exposures to take advantage of any natural offsets and, when considered appropriate,
through the use of derivative and non-derivative financial instruments. Our primary focus is to monitor our exposure to, and
manage, the economic foreign currency exchange risks faced by our operations and realized if we exchange one currency for
another. We currently only hedge certain of our ship commitments and net investments in foreign operations. The financial
impacts of the hedging instruments we do employ generally offset the changes in the underlying exposures being hedged.
Operational Currency Risks
Our operations primarily utilize the U.S. dollar, Australian dollar, euro or sterling as their functional currencies. Our operations
also have revenue and expenses denominated in non-functional currencies. Movements in foreign currency exchange rates will
affect our financial statements.
Investment Currency Risks
We consider our investments in foreign operations to be denominated in stable currencies and of a long-term nature. We
partially mitigate the currency exposure of our investments in foreign operations by designating a portion of our foreign
currency debt and derivatives as hedges of these investments. As of November 30, 2020, we have designated $881 million
of our sterling-denominated debt as non-derivative hedges of our net investments in foreign operations. In 2020, we recognized
$27 million of losses on these non-derivative net investment hedges in the cumulative translation adjustment section of other
comprehensive income (loss). We also have $9.0 billion of euro-denominated debt, which provides an economic offset for our
operations with euro functional currency.
Newbuild Currency Risks
Our shipbuilding contracts are typically denominated in euros. Our decision to hedge a non-functional currency ship
commitment for our cruise brands is made on a case-by-case basis, considering the amount and duration of the exposure,
market volatility, economic trends, our overall expected net cash flows by currency and other offsetting risks. We use foreign
currency derivative contracts to manage foreign currency exchange rate risk for some of our ship construction payments. At
November 30, 2020, for the following newbuild, we had foreign currency contracts for a portion of our euro-denominated
shipyard payments. These contracts are designated as cash flow hedges.
Weighted- Weighted-
Average Floor Average Ceiling
Foreign currency zero cost collars Entered Into Matures In Rate Rate
Mardi Gras 2020 December 2020 $ 1.12 $ 1.28
If the spot rate is between the ceiling and floor rates on the date of maturity, then we would not owe or receive any payments
under the zero cost collars.
At November 30, 2020, our remaining newbuild currency exchange rate risk primarily relates to euro-denominated newbuild
contract payments to non-euro functional currency brands, which represent a total unhedged commitment of $6.9 billion for
newbuilds scheduled to be delivered from 2020 through 2025.
The cost of shipbuilding orders that we may place in the future that is denominated in a different currency than our cruise
brands’ will be affected by foreign currency exchange rate fluctuations. These foreign currency exchange rate fluctuations may
affect our decision to order new cruise ships.
Interest Rate Risks
We manage our exposure to fluctuations in interest rates through our debt portfolio management and investment strategies. We
evaluate our debt portfolio to determine whether to make periodic adjustments to the mix of fixed and floating rate debt through
the use of interest rate swaps, issuance of new debt, amendment of existing debt, early retirement of existing debt or through the
completion of various other capital transactions.
Concentrations of Credit Risk
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As part of our ongoing control procedures, we monitor concentrations of credit risk associated with financial and other
institutions with which we conduct significant business. We seek to manage these credit risk exposures, including counterparty
nonperformance primarily associated with our cash equivalents, investments, notes receivables, future financing facilities,
contingent obligations, derivative instruments, insurance contracts, long-term ship charters and new ship progress payment
guarantees, by:
• Conducting business with well-established financial institutions, insurance companies and export credit agencies
• Diversifying our counterparties
• Having guidelines regarding credit ratings and investment maturities that we follow to help safeguard liquidity and
minimize risk
• Generally requiring collateral and/or guarantees to support notes receivable on significant asset sales, long-term ship
charters and new ship progress payments to shipyards
At November 30, 2020, our exposures under derivative instruments were not material. We also monitor the creditworthiness of
travel agencies and tour operators in Asia, Australia and Europe, which includes charter-hire agreements in Asia and credit and
debit card providers to which we extend credit in the normal course of our business. Concentrations of credit risk associated
with trade receivables and other receivables, charter-hire agreements and contingent obligations are not considered to be
material, principally due to the large number of unrelated accounts, the nature of these contingent obligations and their short
maturities. Normally, we have not required collateral or other security to support normal credit sales. Historically, we have not
experienced significant credit losses, including counterparty nonperformance, however, because of the impact COVID-19 is
having on economies, we have experienced, and expect to continue to experience, an increase in credit losses.
Our credit exposure also includes contingent obligations related to cash payments received directly by travel agents and tour
operators for cash collected by them on cruise sales in Australia and most of Europe where we are obligated to honor our
guests’ cruise payments made by them to their travel agents and tour operators regardless of whether we have received these
payments.
NOTE 11 – Leases
Substantially all of our leases for which we are the lessee are operating leases of port facilities and real estate and are included
within operating lease right-of-use assets, long-term operating lease liabilities and current portion of operating lease liabilities in
our Consolidated Balance Sheet as of November 30, 2020.
We have port facilities and real estate lease agreements with lease and non-lease components, and in such cases, we account for
the components as a single lease component.
We do not recognize lease assets and lease liabilities for any leases with an original term of less than one year. For some of our
port facilities and real estate lease agreements, we have the option to extend our current lease term by 1 to 10 years. Generally,
we do not include renewal options as a component of our present value calculation as we are not reasonably certain that we will
exercise the options.
As most of our leases do not have a readily determinable implicit rate, we estimate the incremental borrowing rate ("IBR") to
determine the present value of lease payments. We apply judgment in estimating the IBR including considering the term of the
lease, the currency in which the lease is denominated, and the impact of collateral and our credit risk on the rate. For leases that
were in place upon adoption of Leases, we used the remaining lease term as of December 1, 2019 in determining the IBR. For
the initial measurement of the lease liabilities for leases commencing after the adoption, the IBR at the lease commencement
date was applied.
We amortize our lease assets on a straight-line basis over the lease term. The components of expense were as follows:
Year Ended
(in millions) November 30, 2020
Operating lease expense $ 203
Variable lease expense (a) (b) $ (61)
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(a) Variable lease expense represents costs associated with our multi-year preferential berthing agreements which vary
based on the number of passengers. These costs are recorded within commission, transportation and other in our
Consolidated Statements of Income (Loss). Variable and short-term lease costs related to operating leases, other than
the port facilities, were not material to our consolidated financial statements.
(b) Several of our preferential berthing agreements have force majeure provisions. We have treated the concessions
granted under such provisions as variable payment adjustments. If our interpretation of the force majeure provisions is
disputed, we could be required to record and make additional guarantee payments.
We have multiple agreements, with a total undiscounted minimum commitment of approximately $439 million, that have been
executed but the lease term has not commenced as of November 30, 2020. These are substantially all related to our rights to use
certain port facilities. The leases are expected to commence between 2021 and 2022.
During 2020, we obtained $144 million of right-of-use assets in exchange for new operating lease liabilities. The cash outflow
for leases was materially consistent with the lease expense recognized during 2020.
Weighted average of the remaining lease terms and weighted average discount rates are as follows:
November 30, 2020
Weighted average remaining lease term - operating leases (in years) 13
Weighted average discount rate - operating leases 3.4 %
As of November 30, 2020, maturities of operating lease liabilities were as follows:
(in millions)
(in millions)
Year
2021 $ 204
2022 176
2023 159
2024 147
2025 143
Thereafter 936
Total lease payments 1,765
Less: Present value discount (341)
Present value of lease liabilities $ 1,424
Under ASC 840, Leases, future minimum lease payments under non-cancelable operating leases of port facilities and other
assets as of November 30, 2019 were as follows:
Year
(in millions) (in millions)
Year
2020 $ 219
2021 196
2022 161
2023 173
2024 167
Thereafter 1,408
$ 2,324
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For time charter arrangements where we are the lessor and for transactions with cruise guests related to the use of cabins, we do
not separate lease and non-lease components. As the non-lease components are the predominant components in the agreements,
we account for these transactions under the Revenue Recognition guidance.
NOTE 12 – Segment Information
Our operating segments are reported on the same basis as the internally reported information that is provided to our chief
operating decision maker (“CODM”), who is the President and Chief Executive Officer of Carnival Corporation and Carnival
plc. The CODM assesses performance and makes decisions to allocate resources for Carnival Corporation & plc based upon
review of the results across all of our segments. Our four reportable segments are comprised of (1) NAA cruise operations,
(2) EA cruise operations, (3) Cruise Support and (4) Tour and Other.
The operating segments within each of our NAA and EA reportable segments have been aggregated based on the similarity of
their economic and other characteristics. Our Cruise Support segment includes our portfolio of leading port destinations and
other services, all of which are operated for the benefit of our cruise brands. Our Tour and Other segment represents the hotel
and transportation operations of Holland America Princess Alaska Tours and other operations.
As of and for the years ended November 30,
Operating Depreciation
costs and Selling and and Operating Capital
(in millions) Revenues expenses administrative amortization income (loss) expenditures Total assets
2020
NAA $ 3,627 $ 5,623 $ 1,066 $ 1,413 $ (5,794) (a) $ 1,430 $ 25,257
EA 1,790 2,548 523 672 (2,729) (b) 2,036 16,505
Cruise Support 68 (10) 262 128 (313) 144 11,135
Tour and Other 110 84 27 28 (29) 11 696
$ 5,595 $ 8,245 $ 1,878 $ 2,241 $ (8,865) $ 3,620 $ 53,593
2019
NAA $ 13,612 $ 8,370 $ 1,427 $ 1,364 $ 2,451 $ 2,781 $ 27,102
EA 6,650 4,146 744 645 1,115 2,462 15,473
Cruise Support 173 125 281 115 (347) 143 1,861
Tour and Other 390 268 28 36 56 43 623
$ 20,825 $ 12,909 $ 2,480 $ 2,160 $ 3,276 $ 5,429 $ 45,058
2018
NAA $ 12,236 $ 7,180 $ 1,403 $ 1,264 $ 2,389 $ 2,614 $ 25,613
EA 6,243 3,676 751 611 1,205 945 13,825
Cruise Support 129 53 268 103 (296) 38 2,303
Tour and Other 272 180 28 39 26 152 660
$ 18,881 $ 11,089 $ 2,450 $ 2,017 $ 3,325 $ 3,749 $ 42,401
(a) Includes $1.3 billion of goodwill impairment charges.
(b) Includes $777 million of goodwill impairment charges.
Revenues by geographic areas, which are based on where our guests are sourced, were as follows:
Years Ended November 30,
(in millions) 2020 2019 2018
North America $ 3,084 $ 11,502 $ 10,066
Europe 1,643 6,318 5,957
Australia and Asia 687 2,632 2,530
Other 180 373 327
$ 5,595 $ 20,825 $ 18,881
Substantially all of our long-lived assets consist of our ships and move between geographic areas.
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NOTE 13 – Compensation Plans and Post-Employment Benefits
Equity Plans
We issue our share-based compensation awards, which at November 30, 2020 included time-based share awards (restricted
stock awards and restricted stock units), performance-based share awards and market-based share awards (collectively “equity
awards”), under the Carnival Corporation and Carnival plc stock plans. Equity awards are principally granted to management
level employees and members of our Boards of Directors. The plans are administered by the Compensation Committee which is
made up of independent directors who determine which employees are eligible to participate, the monetary value or number of
shares for which equity awards are to be granted and the amounts that may be exercised or sold within a specified term. We had
an aggregate of 11.1 million shares available for future grant at November 30, 2020. We fulfill our equity award obligations
using shares purchased in the open market or with unissued or treasury shares. Our equity awards generally vest over a three-
year period, subject to earlier vesting under certain conditions.
Weighted-Average
Grant Date Fair
Shares Value
Outstanding at November 30, 2017 2,949,968 $ 51.82
Granted 951,906 $ 66.68
Vested (1,419,218) $ 45.45
Forfeited (202,139) $ 56.57
Outstanding at November 30, 2018 2,280,517 $ 61.57
Granted 1,357,177 $ 52.17
Vested (960,693) $ 53.49
Forfeited (185,625) $ 56.13
Outstanding at November 30, 2019 2,491,376 $ 59.97
Granted 9,971,331 $ 20.72
Vested (1,641,570) $ 30.68
Forfeited (480,361) $ 50.96
Outstanding at November 30, 2020 10,340,776 $ 26.61
As of November 30, 2020, there was $129 million of total unrecognized compensation cost related to equity awards, which is
expected to be recognized over a weighted-average period of 1.4 years.
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Single-employer Defined Benefit Pension Plans
We maintain several single-employer defined benefit pension plans, which cover certain of our shipboard and shoreside
employees. The U.S. and UK shoreside employee plans are closed to new membership and are funded at or above the level
required by U.S. or UK regulations. The remaining defined benefit plans are primarily unfunded. These plans provide pension
(in millions)
benefits primarily based on employee compensation and years of service.
UK Plan (a) All Other Plans
(in millions) 2020 2019 2020 2019
Change in projected benefit obligation:
Projected benefit obligation as of December 1 $ 299 $ 267 $ 259 $ 213
Past service cost — — 20 17
Interest cost 5 7 6 8
Benefits paid (16) (10) (14) (18)
Actuarial (gain) loss on plans’ liabilities 14 35 13 34
Plan curtailments, settlements and other — — (4) —
Projected benefit obligation as of November 30 303 299 280 254
Change in plan assets:
Fair value of plan assets as of December 1 312 278 18 18
Return on plans’ assets 23 43 1 1
Employer contributions 6 2 14 18
Benefits paid (16) (10) (14) (19)
Plan settlements — — (2) —
Administrative expenses (1) — — —
Fair value of plan assets as of November 30 325 312 17 18
Funded status as of November 30 $ 22 $ 13 $ (263) $ (236)
(a) The P&O Princess Cruises (UK) Pension Scheme (“UK Plan”)
(in millions)
The amounts recognized the Consolidated Balance Sheets for these plans were as follows:
UK Plan All Other Plans
November 30, November 30,
(in millions) 2020 2019 2020 2019
Other assets $ 22 $ 13 $ — $ —
Accrued liabilities and other $ — $ — $ 32 $ 25
Other long-term liabilities $ — $ — $ 231 $ 210
The accumulated benefit obligation for all defined benefit pension plans was $584 million and $531 million at November 30,
2020 and 2019, respectively.
Amounts for pension plans with accumulated benefit obligations in excess of fair value of plan assets are as follows:
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(in millions)
November 30,
(in millions) 2020 2019
Projected benefit obligation $ 280 $ 254
Accumulated benefit obligation $ 272 $ 247
Fair value of plan assets $ 17 $ 18
The net benefit cost recognized in the Consolidated Statements of Income (Loss) were as follows: (in millions)
UK Plan All Other Plans
November 30, November 30,
(in millions) 2020 2019 2018 2020 2019 2018
Service cost $ — $ — $ — $ 20 $ 17 $ 16
Interest cost 5 7 7 6 8 6
Expected return on plan assets (8) (11) (12) (1) (1) —
Amortization of prior service cost — — — — — —
Amortization of net loss (gain) — — 1 4 3 3
Settlement loss recognized — — — 1 — 4
Net periodic benefit cost $ (3) $ (3) $ (2) $ 32 $ 28 $ 29
The components of net periodic benefit cost other than the service cost component are included in other income (expense), net
in the Consolidated Statements of Income (Loss).
Weighted average assumptions used to determine the projected benefit obligation are as follows:
UK Plan All Other Plans
2020 2019 2020 2019
Discount rate 1.6 % 1.9 % 2.2 % 2.9 %
Rate of compensation increase 2.3 % 2.9 % 2.8 % 3.0 %
Weighted average assumptions used to determine net pension income are as follows:
UK Plan All Other Plans
2020 2019 2018 2020 2019 2018
Discount rate 1.9 % 3.0 % 2.6 % 2.9 % 3.5 % 3.3 %
Expected return on assets 3.0 % 4.2 % 4.0 % 3.0 % 3.0 % 3.0 %
Rate of compensation increase 2.9 % 3.4 % 3.2 % 2.7 % 3.0 % 3.0 %
The discount rate used to determine the UK Plan’s projected benefit obligation was determined as the single equivalent rate
based on applying a yield curve determined from AA credit rated bonds at the balance sheet date to the cash flows making up
the pension plan’s obligations. The discount rate used to determine the UK Plan’s future net periodic benefit cost was
determined as the equivalent rate based on applying each individual spot rate from a yield curve determined from AA credit
rated bonds at the balance sheet date for each year’s cash flow. The UK Plan’s expected long-term return on plan assets is
consistent with the long-term investment return target provided to the UK Plan’s fiduciary manager (U.K. government fixed
interest bonds (gilts) plus 1.0% to 1.8% per annum as of November 30, 2020).
Amounts recognized in AOCI are as follows:
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UK Plan All Other Plans
November 30, November 30,
2020 2019 2020 2019
Actuarial losses (gains) recognized in the current year $ 1 $ 3 $ 13 $ 33
Amortization and settlements included in net periodic benefit
cost $ — $ — $ (8) $ (3)
We anticipate making contributions of $27 million to the plans during 2021. Estimated future benefit payments to be made
during each of the next five fiscal years and in the aggregate during the succeeding five fiscal years are as follows: (in millions)
(in millions) UK Plan All Other Plans
2021 $ 6 $ 27
2022 6 25
2023 7 26
2024 7 27
2025 7 29
2026-2030 38 143
$ 71 $ 277
Our investment strategy for our pension plan assets is to maintain a diversified portfolio of asset classes to produce a sufficient
level of diversification and investment return over the long term. The investment policy for each plan specifies the type of
investment vehicles appropriate for the plan, asset allocation guidelines, criteria for selection of investment managers and
procedures to monitor overall investment performance, as well as investment manager performance. As of November 30, 2020
and 2019, respectively, the All Other Plans were all unfunded.
The fair values of the plan assets of the UK Plan by investment class are as follows:
As of November 30,
2020 2019
Equities $ 55 $ 153
U.K. government fixed interest bonds (gilts) 270 159
Multiemployer Defined Benefit Pension Plans
We participate in two multiemployer defined benefit pension plans in the UK, the British Merchant Navy Officers Pension
Fund (registration number 10005645) (“MNOPF”), which is divided into two sections, the “New Section” and the “Old
Section” and the British Merchant Navy Ratings Pension Fund (registration number 10005646) (“MNRPF”). Collectively, we
refer to these as “the multiemployer plans.” The multiemployer plans are maintained for the benefit of the employees of the
participating employers who make contributions to the plans. The risks of participating in these multiemployer plans are
different from single-employer plans, including:
• Contributions made by employers, including us, may be used to provide benefits to employees of other participating
employers
• If any of the participating employers were to withdraw from the multiemployer plans or fail to make their required
contributions, any unfunded obligations would be the responsibility of the remaining participating employers.
We are contractually obligated to make all required contributions as determined by the plans’ trustees. All of our multiemployer
plans are closed to new membership and future benefit accrual. The MNOPF Old Section is fully funded.
We expense our portion of the MNOPF New Section deficit as amounts are invoiced by, and become due and payable to, the
trustees. We accrue and expense our portion of the MNRPF deficit based on our estimated probable obligation from the most
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recent actuarial review. Total expense for the multiemployer plans, was $2 million in 2020, $6 million in 2019 and $8 million in
2018.
Based on the most recent valuation at March 31, 2018 of the MNOPF New Section, it was determined that this plan was 98%
funded. In 2020, 2019 and 2018, our contributions to the MNOPF New Section did not exceed 5% of total contributions to the
fund. Based on the most recent valuation at March 31, 2017 of the MNRPF, it was determined that this plan was 84% funded.
In 2020, 2019 and 2018 our contributions to the MNRPF did not exceed 5% of total contributions to the fund. It is possible that
we will be required to fund and expense additional amounts for the multiemployer plans in the future; however, such amounts
are not expected to be material to our consolidated financial statements.
Defined Contribution Plans
We have several defined contribution plans available to most of our employees. We contribute to these plans based on
employee contributions, salary levels and length of service. Total expense for these plans was $24 million in 2020, $41 million
in 2019 and $39 million in 2018.
(in millions, except
NOTE 14 – Earnings Per Share per share data)
Years Ended November 30,
(in millions, except per share data) 2020 2019 2018
Net income (loss) for basic and diluted earnings per share $ (10,236) $ 2,990 $ 3,152
Weighted-average shares outstanding 775 690 709
Dilutive effect of equity plans — 2 2
Diluted weighted-average shares outstanding 775 692 710
Basic earnings per share $ (13.20) $ 4.34 $ 4.45
Diluted earnings per share $ (13.20) $ 4.32 $ 4.44
(in millions)
Antidilutive shares excluded from diluted earnings per share computations were as follows:
(in millions) November 30, 2020
Equity awards 1
Convertible Notes 103
Total antidilutive securities 104
There were no antidilutive shares excluded from our 2019 and 2018 diluted earnings per share computations.
(in millions)
NOTE 15 – Supplemental Cash Flow Information
November 30,
(in millions) 2020 2019
Cash and cash equivalents (Consolidated Balance Sheets) $ 9,513 $ 518
Restricted cash included in prepaid expenses and other and other assets 179 13
Total cash, cash equivalents and restricted cash (Consolidated Statements
of Cash Flows) $ 9,692 $ 530
Cash paid for interest, net of capitalized interest, was $610 million in 2020, $171 million in 2019 and $182 million in 2018. In
addition, cash paid for income taxes, net was not material in 2020, $46 million in 2019 and $58 million in 2018.
In connection with the repurchase of the Convertible Notes as part of the August and November Registered Direct Offerings, as
an administrative convenience, we permitted the purchasers of 151.2 million of Carnival Corporation common stock to offset
the purchase price payable to us against our obligation to pay the purchase price for $1.3 billion aggregate principal amount of
the Convertible Notes held by them, which is reflected as a non-cash transaction for the year ended November 30, 2020.
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Report of Independent Registered Public Accounting Firm
To the Boards of Directors and Shareholders of Carnival Corporation and Carnival plc
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Carnival Corporation & plc (comprising Carnival
Corporation and Carnival plc and their respective subsidiaries, the “Company”) as of November 30, 2020 and 2019, and the
related consolidated statements of income (loss), comprehensive income (loss), shareholders’ equity and cash flows for each of
the three years in the period ended November 30, 2020, including the related notes (collectively referred to as the “consolidated
financial statements”). We also have audited the Company's internal control over financial reporting as of November 30, 2020,
based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of November 30, 2020 and 2019, and the results of its operations and its cash flows for each of the
three years in the period ended November 30, 2020 in conformity with accounting principles generally accepted in the United
States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of November 30, 2020, based on criteria established in Internal Control - Integrated Framework (2013)
issued by the COSO.
Change in Accounting Principle
As discussed in Notes 1 and 11 to the consolidated financial statements, the Company changed the manner in which it accounts
for leases in 2020.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included
in Management's Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to
express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial
reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.
Emphasis of Matter
As discussed in Note 1 to the consolidated financial statements, the ongoing effects of COVID-19 on the Company’s operations
and global bookings have had, and will continue to have, a material negative impact on the Company’s financial results and
liquidity. Further, beginning on February 28, 2022, additional financial covenant amendments for the Company’s export credit
facilities have been requested and will be needed in order to maintain covenant compliance. Management’s evaluation of these
events and conditions and management’s plans to mitigate these matters are also described in Note 1.
Definition and Limitations of Internal Control over Financial Reporting
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A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial
statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or
disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate
opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Goodwill Interim Impairment Assessment – Certain Reporting Units Within the North America & Australia (“NAA”) and
Europe & Asia (“EA”) Reportable Segments
As described in Notes 2 and 10 to the consolidated financial statements, the Company’s consolidated goodwill balance was
$807 million as of November 30, 2020. The goodwill associated with the NAA and EA reportable segments as of November
30, 2020 was $579 million and $228 million, respectively. Management reviews goodwill for impairment as of July 31 every
year, or more frequently if events or circumstances dictate. The impairment review for goodwill allows management to first
assess qualitative factors to determine whether it is necessary to perform the more detailed quantitative goodwill impairment
test. Management performs the quantitative test if the qualitative assessment determined it is more-likely-than-not that a
reporting unit’s estimated fair value is less than its carrying amount, or management may elect to bypass the qualitative
assessment and proceed directly to the quantitative test for any reporting unit. When performing the quantitative test, if the
estimated fair value of the reporting unit exceeds its carrying value, no further analysis is required. However, if the estimated
fair value of the reporting unit is less than the carrying value, goodwill is written down based on the difference between the
reporting unit’s carrying amount and its fair value, limited to the amount of goodwill allocated to the reporting unit. As a result
of the effect of COVID-19 on management’s expected future operating cash flows, management performed interim discounted
cash flow analyses for certain reporting units with goodwill as of February 29, 2020 and for all reporting units with goodwill as
of May 31, 2020 (i.e., prior to the Company’s annual test date of July 31, 2020). Consequently, management determined that
the estimated fair values of two of the Company’s NAA segment reporting units and two of the Company’s EA segment
reporting units no longer exceeded their carrying values. Management recognized goodwill impairment charges of $1,319
million and $777 million within the NAA and EA reportable segments, respectively and the Company has no remaining
goodwill for those reporting units. As of July 31, 2020, management performed the annual goodwill impairment review and
determined there was no incremental impairment for goodwill at the annual test date. As a result of the extended pause in
operations, management performed an additional quantitative goodwill impairment review for all remaining reporting units as
of November 30, 2020 and determined there was no incremental impairment for goodwill. The determination of the fair value
of the Company’s reporting units includes numerous assumptions that are subject to various risks and uncertainties. The
principal assumptions used in management’s cash flow analyses consisted of the timing of the Company’s return to service;
changes in market conditions; and port or other restrictions; forecasted revenues net of the most significant variable costs,
which are travel agent commissions, costs of air and other transportation, and certain other costs that are directly associated
with onboard and other revenues, including credit and debit card fees; the allocation of new ships; the timing of the transfer or
sale of ships amongst brands; and the estimated proceeds from ship sales; and the weighted-average cost of capital of market
participants, adjusted for the risk attributable to the geographic regions in which these cruise brands operate.
The principal considerations for our determination that performing procedures relating to the goodwill interim impairment
assessment for certain reporting units within the NAA and EA reportable segments at May 31, 2020 is a critical audit matter are
(i) the significant judgment by management in determining the fair value of the reporting units; (ii) a high degree of auditor
judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to
forecasted revenues net of the most significant variable costs, which are travel agent commissions, costs of air and other
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transportation, and certain other costs that are directly associated with onboard and other revenues, including credit and debit
card fees; the timing of the transfer or sale of ships amongst brands; and the weighted-average cost of capital of market
participants, adjusted for the risk attributable to the geographic regions in which these cruise brands operate; and (iii) the audit
effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
management’s goodwill impairment assessments, including controls over the valuation of the Company’s reporting units. These
procedures also included, among others (i) testing management’s process for determining the fair value estimates of certain
reporting units within the NAA and EA reportable segments related to the interim impairment assessment; (ii) evaluating the
appropriateness of the discounted cash flow analyses; (iii) testing the completeness and accuracy of underlying data used in the
analyses; and (iv) evaluating the significant assumptions used by management related to forecasted revenues net of the most
significant variable costs, which are travel agent commissions, costs of air and other transportation, and certain other costs that
are directly associated with onboard and other revenues, including credit and debit card fees; the timing of the transfer or sale of
ships amongst brands; and the weighted-average cost of capital of market participants, adjusted for the risk attributable to the
geographic regions in which these cruise brands operate. Evaluating management’s assumptions related to forecasted revenues
net of the most significant variable costs, which are travel agent commissions, costs of air and other transportation, and certain
other costs that are directly associated with onboard and other revenues, including credit and debit card fees and the timing of
the transfer or sale of ships amongst brands involved evaluating whether the assumptions used by management were reasonable
considering (i) the current and past performance of the reporting unit; (ii) the consistency with external market and industry
data; and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with
specialized skill and knowledge were used to assist in the evaluation of the discounted cash flow analyses and the weighted-
average cost of capital of market participants, adjusted for the risk attributable to the geographic regions in which these cruise
brands operate.
Certain Ship Impairment Assessments
As described in Notes 2, 3, and 10 to the consolidated financial statements, the Company’s consolidated ship and ship
improvements balance was $49.8 billion as of November 30, 2020. Management reviews their long-lived assets for impairment
whenever events or circumstances indicate potential impairment. As a result of the effect of COVID-19 on the Company’s
expected future operating cash flows and management’s decision to dispose of certain ships, management determined certain
impairment triggers occurred. Accordingly, management performed undiscounted cash flow analyses on certain ships in the
Company’s fleet throughout 2020. Based on these undiscounted cash flow analyses, management determined that certain ships,
specifically those being disposed, had net carrying values that exceeded their estimated undiscounted future cash flows.
Management determined the fair values of these ships based on their estimated selling value. Management then compared these
estimated fair values to the net carrying values and, as a result, recognized ship impairment charges of $1.5 billion and $0.3
billion within the NAA and EA segments during 2020. The principal assumptions used in management’s undiscounted cash
flow analyses consisted of the timing of the respective ship’s return to service; changes in market conditions; and port or other
restrictions; forecasted ship revenues net of the most significant variable costs, which are travel agent commissions, costs of air
and other transportation, and certain other costs that are directly associated with onboard and other revenues, including credit
and debit card fees; and the timing of the sale of ships and estimated proceeds.
The principal considerations for our determination that performing procedures relating to certain ship impairment assessments
is a critical audit matter are (i) the significant judgment by management in developing the undiscounted cash flow analyses for
the ships with triggering events; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and
evaluating management’s significant assumptions related to forecasted ship revenues net of the most significant variable costs,
which are travel agent commissions, costs of air and other transportation, and certain other costs that are directly associated
with onboard and other revenues, including credit and debit card fees and the timing of the sale of ships and estimated proceeds.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
management’s ship impairment assessments, including controls over the analysis of the Company’s ships that were subject to
undiscounted cash flow impairment analyses. These procedures also included, among others (i) testing management’s process
for developing the undiscounted cash flow estimates for ships with triggering events; (ii) evaluating the appropriateness of the
undiscounted cash flow methods; (iii) testing the completeness and accuracy of underlying data used in the estimates; and (iv)
evaluating the significant assumptions used by management related to forecasted ship revenues net of the most significant
variable costs, which are travel agent commissions, costs of air and other transportation, and certain other costs that are directly
associated with onboard and other revenues, including credit and debit card fees and the timing of the sale of ships and
estimated proceeds. Evaluating management’s assumptions related to the forecasted ship revenues net of the most significant
variable costs, which are travel agent commissions costs of air and other transportation, and certain other costs that are directly
associated with onboard and other revenues, including credit and debit card fees and the timing of the sale of ships and
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estimated proceeds involved evaluating whether the assumptions used by management were reasonable considering (i) the
current and past performance of the Company; (ii) the consistency with external market and industry data; and (iii) whether
these assumptions were consistent with evidence obtained in other areas of the audit.
Liquidity - Impact of COVID-19
As described in Note 1 to the consolidated financial statements, in the face of the global pandemic, management paused its
guest cruise operations in mid-March 2020. In September 2020, the Company resumed limited guest operations as part of its
phased return to service. Management believes that the ongoing effects of COVID-19 on their operations have had, and will
continue to have, a material negative impact on their financial results and liquidity. Management has taken and continues to
take actions to improve the Company’s liquidity, including capital expenditure and operating expense reductions, amending
credit agreements, accelerating the removal of certain ships from the Company’s fleet, suspending dividend payments on, and
the repurchase of, common stock of Carnival Corporation and ordinary shares of Carnival plc and pursuing various capital
market transactions. Based on these actions and considering the Company’s available liquidity including cash and cash
equivalents of $9.5 billion at November 30, 2020, management concluded there is sufficient liquidity to satisfy the Company’s
obligations for at least the next twelve months. The principal assumptions used in management’s cash flow analyses used to
estimate future liquidity requirements consisted of the expected continued gradual resumption of guest cruise operations; the
expected lower than comparable historical occupancy levels; the expected incremental expenses for the resumption of guest
cruise operations for the maintenance of additional public health protocols and complying with additional regulations.
The principal considerations for our determination that performing procedures relating to the impact of COVID-19 on the
Company’s liquidity is a critical audit matter are (i) the significant judgment by management when evaluating the uncertainty
related to the effects of the COVID-19 pandemic on the Company’s financial results and liquidity, which impacts the
Company’s forecasted financial results and estimated liquidity requirements to satisfy obligations; (ii) a high degree of auditor
judgment, subjectivity, and effort in performing procedures and evaluating management’s liquidity assessment to satisfy
obligations for at least the next twelve months.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
management’s assessment of the Company’s liquidity. These procedures also included, among others, (i) testing management’s
process for forecasting financial results and liquidity within one year after the date the financial statements are issued and (ii)
testing the completeness and accuracy of underlying data used in the forecast; and (iii) evaluation of management’s liquidity
assessment and their disclosure in the consolidated financial statements regarding having sufficient liquidity to satisfy its
obligations for at least the next twelve months.
/s/PricewaterhouseCoopers LLP
Miami, Florida
January 26, 2021
We have served as the Company’s auditors since 2003. Prior to that, we served as Carnival Corporation’s auditors since at least
1986. We have not been able to determine the specific year we began serving as auditor of Carnival Corporation.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cautionary Note Concerning Factors That May Affect Future Results
Some of the statements, estimates or projections contained in this document are “forward-looking statements” that involve risks,
uncertainties and assumptions with respect to us, including some statements concerning future results, operations, outlooks, plans,
goals, reputation, cash flows, liquidity and other events which have not yet occurred. These statements are intended to qualify for the
safe harbors from liability provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. 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,” “anticipate,” “forecast,” “project,” “future,”
“intend,” “plan,” “estimate,” “target,” “indicate,” “outlook,” and similar expressions of future intent or the negative of such terms.
Forward-looking statements include those statements that relate to our outlook and financial position including, but not limited to,
statements regarding:
• Pricing • Estimates of ship depreciable lives and residual values
• Booking levels • Goodwill, ship and trademark fair values
• Occupancy • Liquidity and credit ratings
• Interest, tax and fuel expenses • Adjusted earnings per share
• Currency exchange rates • Impact of the COVID-19 coronavirus global pandemic on
our financial condition and results of operations
Because forward-looking statements involve risks and uncertainties, there are many factors that could cause our actual results,
performance or achievements to differ materially from those expressed or implied by our forward looking statements. This note
contains important cautionary statements of the known factors that we consider could materially affect the accuracy of our forward-
looking statements and adversely affect our business, results of operations and financial position. Additionally, many of these risks
and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the
COVID-19 outbreak. It is not possible to predict or identify all such risks. There may be additional risks that we consider immaterial
or which are unknown. These factors include, but are not limited to, the following:
• COVID-19 has had, and is expected to continue to have, a significant impact on our financial condition and operations,
which impacts our ability to obtain acceptable financing to fund resulting reductions in cash from operations. The current,
and uncertain future, impact of the COVID-19 outbreak, including its effect on the ability or desire of people to travel
(including on cruises), is expected to continue to impact our results, operations, outlooks, plans, goals, reputation,
litigation, cash flows, liquidity, and stock price.
• As a result of the COVID-19 outbreak, we may be out of compliance with one or more maintenance covenants in certain of
our debt facilities, for which we currently have amendments for the period through November 30, 2021 with the next testing
date of February 28, 2022.
• World events impacting the ability or desire of people to travel have and may continue to lead to a decline in demand for
cruises.
• Incidents concerning our ships, guests or the cruise vacation industry as well as adverse weather conditions and other
natural disasters have in the past and may, in the future, impact the satisfaction of our guests and crew and lead to
reputational damage.
• Changes in and non-compliance with laws and regulations under which we operate, such as those relating to health,
environment, safety and security, data privacy and protection, anti-corruption, economic sanctions, trade protection and tax
have in the past and may, in the future, lead to litigation, enforcement actions, fines, penalties, and reputational damage.
• Breaches in data security and lapses in data privacy as well as disruptions and other damages to our principal offices,
information technology operations and system networks, including the recent ransomware incidents, and failure to keep
pace with developments in technology may adversely impact our business operations, the satisfaction of our guests and crew
and may lead to reputational damage.
• Ability to recruit, develop and retain qualified shipboard personnel who live away from home for extended periods of time
may adversely impact our business operations, guest services and satisfaction.
• Increases in fuel prices, changes in the types of fuel consumed and availability of fuel supply may adversely impact our
scheduled itineraries and costs.
• Fluctuations in foreign currency exchange rates may adversely impact our financial results.
• Overcapacity and competition in the cruise and land-based vacation industry may lead to a decline in our cruise sales,
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pricing and destination options.
• Inability to implement our shipbuilding programs and ship repairs, maintenance and refurbishments may adversely impact
our business operations and the satisfaction of our guests.
The ordering of the risk factors set forth above is not intended to reflect our indication of priority or likelihood.
Forward-looking statements should not be relied upon as a prediction of actual results. Subject to any continuing obligations under
applicable law or any relevant stock exchange rules, we expressly disclaim any obligation to disseminate, after the date of this
document, any updates or revisions to any such forward-looking statements to reflect any change in expectations or events,
conditions or circumstances on which any such statements are based.
2020 Executive Overview
2020 was an unprecedented year with significant impacts on our business from the effects of COVID-19. In response to the global
pandemic, we paused our guest cruise operations in mid-March 2020. We returned over 260,000 guests home, repatriated 90,000
crew members, processed billions of dollars of guest refunds and cruise credits, accelerated the exit of 19 vessels, negotiated the
delay of 16 ships on order, moved our entire fleet into full pause status, developed new cruise protocols and are putting them to test
as we resume limited cruise operations in both Italy and Germany. Additionally, we extended debt maturities and secured financial
covenant amendments, while completing various financing transactions for a cumulative $19 billion of new capital. We ended the
year with $9.5 billion in cash and believe we have the liquidity in place to sustain ourselves throughout 2021.
We executed a rationalization of our fleet reducing capacity by 13 percent. As a result, we expect to be less reliant on new guests due
to our recurring base of repeat guests, which will be spread over a smaller fleet. Our capacity reduction is also expected to deliver a
structurally lower cost base. As the 19 ships leaving the fleet are smaller and less efficient ships, we expect to benefit by a reduction
in unit costs and a reduction in unit fuel consumption when we resume guest cruise operations. Our efforts to right size our shore side
operations may reduce our costs further, as well as our continued focus on finding efficiencies across our ship operations. Over time,
we believe we may achieve an additional structural benefit to unit costs as we deliver new, larger and more efficient ships. This
includes the deliveries of Princess Cruises’ Enchanted Princess and P&O UK’s Iona in 2020 and the upcoming deliveries of Costa
Firenze, Mardi Gras and Rotterdam in 2021. As a result of these and other actions, we expect to emerge from the pause a more
efficient company.
We continue to work diligently to resume operations in the U.S., including ongoing discussions with the CDC. We are also working
towards resuming operations in many other parts of the world, including Asia, Australia and the UK and we are working hard to do
so in a way that serves the best interests of public health. Currently, the company is unable to predict when the entire fleet will return
to normal operations. The pause in guest operations continues to have a material negative impact on all aspects of the company's
business, including the company’s liquidity, financial position and results of operations. We expect a net loss on both a U.S. GAAP
and adjusted basis for the full year ending November 30, 2021.
Our highest responsibility and top priorities are to be in compliance everywhere we operate in the world, to protect the environment
and the health, safety and well-being of our guests, the people in the communities we touch and our shipboard and shoreside
employees.
We have continued to make advancements in our sustainability efforts, reducing food waste and accelerating the reduction in single
use plastics amongst others. We have dealt with many types of viruses previously, and already have effective protocols in place
onboard our ships including screening measures, medical centers and enhanced sanitation procedures which prevent and reduce
spread once brought onboard from land. We have been working with leading medical and science experts around the globe, to
develop new and enhanced protocols and procedures based on the best available science to specifically address the risks associated
with COVID-19. We expect these protocols to continue to evolve as society’s understanding of COVID-19 strengthens. We intend to
initially resume operations with a small percentage of the fleet. For our initial voyages, we have chosen to sail with low occupancy
levels, enabling us to gain experience with our enhanced safety protocols.
Maintaining a strong balance sheet has historically been a key strength for our company. While we raised capital mainly through
debt, we strengthened our capital structure through equity, raising $3.0 billion during 2020 and strengthened our balance sheet
through the early conversion of convertible debt. All of these efforts are in line with our primary financial objective going forward, to
maximize cash generation. As we return to full operations, our cash flow will be the primary driver in our efforts to return to
investment grade credit over time, creating greater shareholder value. With the aggressive actions we have taken, managing the
balance sheet and reducing capacity, we believe we are positioned to capitalize on pent up demand and to emerge a more efficient
company.
New Accounting Pronouncements
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Refer to our consolidated financial statements for further information on Accounting Pronouncements.
Critical Accounting Estimates
Our critical accounting estimates are those we believe require our most significant judgments about the effect of matters that are
inherently uncertain. A discussion of our critical accounting estimates, the underlying judgments and uncertainties used to make them
and the likelihood that materially different estimates would be reported under different conditions or using different assumptions is as
follows:
Liquidity and COVID-19
We make several critical accounting estimates with respect to our liquidity.
The effects of COVID-19 have had a significant impact on our operations and liquidity. Significant events affecting travel, including
COVID-19 and our pause in guest cruise operations, have had an impact on booking patterns. The full extent of the impact will be
determined by our gradual return to service and the length of time COVID-19 influences travel decisions. We believe that the
ongoing effects of COVID-19 on our operations and global bookings will continue to have a material negative impact on our
financial results and liquidity.
The estimation of our future liquidity requirements includes numerous assumptions that are subject to various risks and uncertainties.
The principal assumptions used to estimate our future liquidity requirements consist of:
• Expected continued gradual resumption of guest cruise operations
• Expected lower than comparable historical occupancy levels during the resumption of guest cruise operations
• Expected incremental expenses for the resumption of guest cruise operations, for the maintenance of additional public health
protocols and procedures for additional regulations
We cannot make assurances that our assumptions used to estimate liquidity requirements may not change because we have never
previously experienced a complete cessation of guest cruise operations, and as a consequence, our ability to be predictive is
uncertain. In addition, the magnitude, duration and speed of the global pandemic are uncertain. We have made reasonable estimates
and judgments of the impact of COVID-19 within our financial statements and there may be changes to those estimates in future
periods. We have taken and will continue to take actions to improve liquidity, including capital expenditure and operating expense
reductions, amending credit agreements, accelerating the removal of certain ships from the fleet, suspending dividend payments on,
and the repurchase of, common stock of Carnival Corporation and ordinary shares of Carnival plc and pursuing various capital
transactions.
Ship Accounting
We make several critical accounting estimates with respect to our ship accounting.
We account for ship improvement costs, including replacements of certain significant components and parts, by capitalizing those
costs we believe add value to our ships and have a useful life greater than one year and depreciating those improvements over their
estimated remaining useful life. The costs of repairs and maintenance, including minor improvement costs and expenses related to
dry-docks, are charged to expense as incurred. If we change our assumptions in making our determinations as to whether
improvements to a ship add value, the amounts we expense each year as repair and maintenance expense could increase, which would
be partially offset by a decrease in depreciation expense, resulting from a reduction in capitalized costs.
In order to compute our ships’ depreciation expense, we apply judgment to determine their useful lives as well as their residual
values. We estimate the useful life of our ships and ship improvements based on the expected period over which the assets will be of
economic benefit to us, including the impact of marketing and technical obsolescence, competition, physical deterioration, historical
useful lives of similarly-built ships, regulatory constraints and maintenance requirements. In addition, we consider estimates of the
weighted-average useful lives of the ships’ major component systems, such as the hull, cabins, main electric, superstructure and
engines. Taking all of this into consideration, we have estimated our new ships’ useful lives at 30 years.
We determine the residual value of our ships based on our long-term estimates of their resale value at the end of their useful life to us
but before the end of their physical and economic lives to others, historical resale values of our and other cruise ships and viability of
the secondary cruise ship market. We have estimated our residual values at 15% of our original ship cost.
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Given the large size and complexity of our ships, ship accounting estimates require considerable judgment and are inherently
uncertain. We do not have cost segregation studies performed to specifically componentize our ships. In addition, since we do not
separately componentize our ships, we do not identify and track depreciation of original ship components. Therefore, we typically
have to estimate the net book value of components that are retired, based primarily upon their replacement cost, their age and their
original estimated useful lives.
If materially different conditions existed, or if we materially changed our assumptions of ship useful lives and residual values, our
depreciation expense, loss on retirement of ship components and net book value of our ships would be materially different. Our 2020
ship depreciation expense would have increased by approximately $46 million assuming we had reduced our estimated 30-year ship
useful life estimate by one year at the time we took delivery or acquired each of our ships. In addition, our 2020 ship depreciation
expense would have increased by approximately $232 million assuming we had estimated our ships to have no residual value.
We believe that the estimates we made for ship accounting purposes are reasonable and our methods are consistently applied in all
material respects and result in depreciation expense that is based on a rational and systematic method to equitably allocate the costs
of our ships to the periods during which we use them.
Valuation of Ships
Impairment reviews of our ships require us to make significant estimates.
We evaluate ship asset impairments at the individual ship level which is the lowest level for which identifiable cash flows are largely
independent of the cash flows of other assets and liabilities. We review our ships for impairment whenever events or circumstances
indicate that the carrying value of a ship may not be recoverable. If estimated future cash flows are less than the carrying value of a
ship, an impairment charge is recognized to the extent its carrying value exceeds fair value.
The estimation of a ship’s fair value includes numerous assumptions that are subject to various risks and uncertainties. The principal
assumptions used in our ship impairment reviews consist of:
• Timing of the respective ship’s return to service, changes in market conditions and port or other restrictions
• Forecasted ship revenues net of our most significant variable costs, which are travel agent commissions, costs of air and
other transportation and certain other costs that are directly associated with onboard and other revenues, including credit and
debit card fees
• Timing of the sale of ships and estimated proceeds
Refer to our consolidated financial statements for additional discussion of our property and equipment policy, ship impairment
reviews and ship impairment charges recognized during 2020.
We believe that we have made reasonable estimates and judgments.
Valuation of Goodwill
Impairment reviews of our goodwill require us to make significant estimates.
We review our goodwill for impairment at the reporting unit level as of July 31 every year, or more frequently if events or
circumstances dictate. If the estimated fair value of any of our reporting units is less than the reporting unit’s carrying value, goodwill
is written down based on the difference between the reporting unit’s carrying amount and its estimated fair value, limited to the
amount of goodwill allocated to the reporting unit.
The estimation of our reporting unit fair value includes numerous assumptions that are subject to various risks and uncertainties. Our
pause in guest cruise operations and the possibility of further extensions created some uncertainty in forecasting the operating results
and future cash flows used in our impairment analyses. The principal assumptions used in our goodwill impairment reviews consist
of:
• The timing of our return to service, changes in market conditions and port or other restrictions
• Forecasted revenues net of our most significant variable costs, which are travel agent commissions, costs of air and other
transportation, and certain other costs that are directly associated with onboard and other revenues including credit and debit
card fees
• The allocation of new ships and the timing of the transfer or sale of ships amongst brands, as well as the estimated proceeds
from ship sales
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• Weighted-average cost of capital of market participants, adjusted for the risk attributable to the geographic regions in which
these cruise brands operate
Refer to our consolidated financial statements for additional discussion of our goodwill accounting policy, impairment reviews and
goodwill impairment charges recognized during 2020.
We believe that we have made reasonable estimates and judgments.
Contingencies
We periodically assess the potential liabilities related to any lawsuits or claims brought against us, as well as for other known
unasserted claims, including environmental, legal, regulatory and guest and crew matters. While it is typically very difficult to
determine the timing and ultimate outcome of these matters, we use our best judgment to determine the appropriate amounts to record
in our consolidated financial statements.
We accrue a liability and establish a reserve when we believe a loss is probable and the amount of the loss can be reasonably
estimated. In assessing probable losses, we make estimates of the amount of probable insurance recoveries, if any, which are
recorded as assets where appropriate. Such accruals and reserves are typically based on developments to date, management’s
estimates of the outcomes of these matters, our experience in contesting, litigating and settling other similar matters, historical claims
experience, actuarially determined estimates of liabilities and any related insurance coverage.
Given the inherent uncertainty related to the eventual outcome of these matters and potential insurance recoveries, it is possible that
all or some of these matters may be resolved for amounts materially different from any provisions or disclosures that we may have
made. In addition, as new information becomes available, we may need to reassess the amount of asset or liability that needs to be
accrued related to our contingencies. All such changes in our estimates could materially impact our results of operations and financial
position.
Refer to our consolidated financial statements for additional discussion of contingencies.
Results of Operations
We have historically earned substantially all of our cruise revenues from the following:
• Sales of passenger cruise tickets and, in some cases, the sale of air and other transportation to and from airports near our ships’
home ports and cancellation fees. We also collect fees, taxes and other charges from our guests. The cruise ticket price typically
includes the following:
Accommodations
Most meals, including snacks at numerous venues
Access to amenities such as swimming pools, water slides, water parks, whirlpools, a health club and sun decks
Supervised youth programs
Entertainment, such as theatrical and comedy shows, live music and nightclubs
Visits to multiple destinations
• Sales of onboard goods and services not included in the cruise ticket price. This generally includes the following:
• Beverage sales • Internet and communication services
• Casino gaming • Full service spas
• Shore excursions • Specialty restaurants
• Retail sales • Art sales
• Photo sales • Laundry and dry cleaning services
These goods and services are provided either directly by us or by independent concessionaires, from which we receive either a
percentage of their revenues or a fee. Concession revenues do not have direct expenses because the costs and services incurred for
concession revenues are borne by our concessionaires.
We earn our tour and other revenues from our hotel and transportation operations, long-term leasing of ships and other revenues.
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We incur cruise operating costs and expenses for the following:
• The costs of passenger cruise bookings, which include travel agent commissions, cost of air and other transportation, port fees,
taxes, and charges that directly vary with guest head counts and credit and debit card fees
• Onboard and other cruise costs, which include the costs of beverage sales, costs of shore excursions, costs of retail sales,
communication costs, credit and debit card fees, other onboard costs, costs of cruise vacation protection programs and pre- and
post-cruise land packages
• Payroll and related costs, which include the costs of officers and crew in bridge, engineering and hotel operations. Substantially all
costs associated with our shoreside personnel are included in selling and administrative expenses
• Fuel costs, which include fuel delivery costs
• Food costs, which include both our guest and crew food costs
• Other ship operating expenses, which include port costs that do not vary with guest head counts; repairs and maintenance,
including minor improvements and dry-dock expenses; hotel costs; entertainment; gains and losses on ship sales; ship impairments;
freight and logistics; insurance premiums and all other ship operating expenses
We incur tour and other costs and expenses for our hotel and transportation operations, long-term leasing of ships and other expenses.
Statistical Information
Years Ended November 30,
2020 2019 2018
ALBDs
ALBDs(in(inthousands)
thousands)[see
(b) footnote
(c) (b)] [see footnote (c)] [see footnote
(a) (a)] 87,424 83,872
Occupancy percentage (d) [see footnote
(a) (a)] 106.8 % 106.9 %
Passengers carried (in thousands) [see footnote
(a) (a)] 12,866 12,407
Fuel consumption in metric tons (in thousands) 1,915 3,312 3,296
Fuel cost per metric ton consumed $ 430 $ 472 $ 491
Currencies (USD to 1)
AUD $ 0.68 $ 0.70 $ 0.75
CAD $ 0.74 $ 0.75 $ 0.78
EUR $ 1.13 $ 1.12 $ 1.18
GBP $ 1.28 $ 1.27 $ 1.34
RMB $ 0.14 $ 0.14 $ 0.15
We paused our guest operations in mid-March 2020 and have been in a pause for a majority of the fiscal year. The pause in guest
operation had a material negative impact on all aspects of our business, including the above statistical information.
Notes to Statistical Information
footnote (a): Due to the impact of COVID-19 in 2020, current year data is not meaningful and is not included in the table.
(a) Due to the impact of COVID-19 in 2020, current year data is not meaningful and is not included in the table.
footnote
(b) (b): ALBD
ALBD is a standard
is a standard measure
measure of passenger
of passenger capacity
capacity forperiod
for the the period thatuse
that we wetouse to approximate
approximate rate and and capacity
ratecapacity variances,
variances,
based on consistently applied formulas that we use to perform analyses to determine the main non-capacity driven factors
based on consistently applied formulas that we use to perform analyses to determine the main non-capacity driven factors
thatour
that cause cruise
cause ourrevenues and expenses
cruise revenues to vary.
and expenses toALBDs assumeassume
vary. ALBDs that each
thatcabin
each wecabin wefor
offer accommodates
salefor
offer two passengers
sale accommodates two
and is computed by multiplying passenger capacity by revenue-producing ship operating days in the period.
passengers and is computed by multiplying passenger capacity by revenue-producing ship operating days in the period.
In (c):
footnote
(c) 2019Incompared
2019 compared to had
to 2018, we 2018, we capacity
a 4.2% had a 4.2% capacity
increase increase
in ALBDs in ALBDs
comprised comprised
of a 1.8% of a 1.8%
capacity increase NAA increase
capacity
in our
in our NAA segment
segment and an and
8.6% an 8.6%increase
capacity capacity increase
in our EA in our EA segment.
segment.
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Our NAA segment’s capacity increase was caused by:
• Partial period impact from one Carnival Cruise Line 3,960-passenger capacity ship that entered into service in
April 2018
• Partial period impact from one Seabourn 600-passenger capacity ship that entered into service in May 2018
• Partial period impact from one Holland America Line 2,670-passenger capacity ship that entered into service in
December 2018
• Partial period impact from one Princess Cruises 3,660-passenger capacity ship that entered into service in October
2019
These increases were partially offset by:
• Partial period impact from one P&O Cruises (Australia) 1,680-passenger capacity ship removed in March 2019
• Partial period impact from one P&O Cruises (Australia) 1,260-passenger capacity ship removed in April 2019
• Partial period impact from one Holland America Line 840-passenger capacity ship removed in July 2019
Our EA segment’s capacity increase was caused by:
• Partial period impact from one AIDA 5,230-passenger capacity ship that entered into service in December 2018
• Partial period impact from one Costa 4,200-passenger capacity ship that entered into service in March 2019
These increases were partially offset by:
• Partial period impact from one P&O Cruises (UK) 700-passenger capacity ship removed from service in March
2018
• Partial period impact from one Costa 1,300-passenger capacity ship removed from service in April 2018.
• Partial period impact from one P&O Cruises (UK) 1,880-passenger capacity ship removed from service in August
2019
(d) In accordance with cruise industry practice, occupancy is calculated using a denominator of ALBDs, which assumes two
passengers per cabin even though some cabins can accommodate three or more passengers. Percentages in excess of 100%
indicate that on average more than two passengers occupied some cabins.
2020 Compared to 2019
Results of Operations
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Consolidated (in millions)
Years Ended November 30,
% increase
(in millions) 2020 2019 Change (decrease)
Revenues
Passenger ticket $ 3,684 $ 14,104 $ (10,420) (74)%
Onboard and other 1,910 6,721 (4,810) (72)%
5,595 20,825 (15,230) (73)%
Operating Costs and Expenses
Commissions, transportation and other 1,139 2,720 (1,582) (58)%
Onboard and other 605 2,101 (1,496) (71)%
Payroll and related 1,780 2,249 (469) (21)%
Fuel 823 1,562 (739) (47)%
Food 413 1,083 (671) (62)%
Ship and other impairments 1,967 26 1,941 7542 %
Other operating 1,518 3,167 (1,649) (52)%
8,245 12,909 (4,664) (36)%
Selling and administrative 1,878 2,480 (601) (24)%
Depreciation and amortization 2,241 2,160 81 4%
Goodwill impairment 2,096 — 2,096 100 %
14,460 17,549 (3,089) (18)%
Operating Income (Loss) $ (8,865) $ 3,276 $ (12,141) (371)%
(in millions)
NAA
Years Ended November 30,
% increase
(in millions) 2020 2019 Change (decrease)
Revenues
Passenger ticket $ 2,334 $ 8,992 $ (6,658) (74)%
Onboard and other 1,293 4,620 (3,327) (72)%
3,627 13,612 (9,985) (73)%
Operating Costs and Expenses 5,623 8,370 (2,747) (33)%
Selling and administrative 1,066 1,427 (361) (25)%
Depreciation and amortization 1,413 1,364 49 4%
Goodwill impairment 1,319 — 1,319 100 %
9,422 11,161 (1,739) (16)%
Operating Income (Loss) $ (5,794) $ 2,451 $ (8,246) (336)%
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EA (in millions)
Years Ended November 30,
% increase
(in millions) 2020 2019 Change (decrease)
Revenues
Passenger ticket $ 1,388 $ 5,207 $ (3,820) (73)%
Onboard and other 402 1,442 (1,040) (72)%
1,790 6,650 (4,860) (73)%
Operating Costs and Expenses 2,548 4,146 (1,599) (39)%
Selling and administrative 523 744 (221) (30)%
Depreciation and amortization 672 645 27 4%
Goodwill impairment 777 — 777 100 %
4,519 5,534 (1,016) (18)%
Operating Income (Loss) $ (2,729) $ 1,115 $ (3,845) (345)%
We paused our guest operations in mid-March 2020. We resumed limited guest cruise operations in September 2020 as part of our
phased return to service. As of January 14, 2021, none of our ships were operating with guests onboard. The pause in guest
operations is continuing to have material negative impacts on all aspects of our business. The longer the pause in guest operations
continues, the greater the impact on our liquidity and financial position.
During 2020, as a result of the pause in our guest cruise operations, we have experienced meaningfully lower revenues compared to
the prior year. This has resulted in an operating loss for the current period. We are unable to predict when the entire fleet will return
to normal operations, and as a result, unable to provide an earnings forecast. The pause in guest operations continues to have a
material negative impact on all aspects of our business, including our liquidity, financial position and results of operations. We expect
a net loss on both a U.S. GAAP and adjusted basis for the full year ending November 30, 2021.
While maintaining compliance, environmental protection and safety, we significantly reduced ship operating expenses, including
cruise payroll and related expenses, food, fuel, insurance and port charges by transitioning ships into paused status, either at anchor
or in port and staffed at a safe manning level. We continue to seek ways to further reduce our ongoing ship operating expenses.
In addition, during the year we incurred incremental COVID-19 related costs associated with repatriating guests and crew members,
enhancing health protocols and sanitizing our ships, restructuring costs and defending lawsuits.
As a result of the effects of COVID-19 on our expected future operating cash flows, we recognized goodwill impairment charges of
$2.1 billion and ship impairment charges of $1.8 billion during 2020.
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Key Performance Non-GAAP Financial Indicators
The table below reconciles Adjusted net income (loss) and Adjusted EBITDA to Net Income (loss) and Adjusted earnings per share
to Earnings per share for the periods presented:
(dollars
in
millions, Years Ended November 30,
except
per
(dollars in millions, except per share data) 2020 2019 2018
share Net income (loss)
data)
U.S. GAAP net income (loss) $ (10,236) $ 2,990 $ 3,152
Unrealized (gains) losses on fuel derivatives, net — — (94)
(Gains) losses on ship sales and impairments 3,934 (6) (38)
Restructuring expenses 47 10 1
Other 462 47 8
Adjusted net income (loss) $ (5,793) $ 3,041 $ 3,029
Interest expense, net of capitalized interest 895 206 194
Interest income (18) (23) (14)
Income tax expense, net (17) 71 54
Depreciation and amortization 2,241 2,160 2,017
Adjusted EBITDA $ (2,692) $ 5,455 $ 5,280
Weighted-average shares outstanding 775 692 710
Earnings per share
U.S. GAAP earnings per share $ (13.20) $ 4.32 $ 4.44
Unrealized (gains) losses on fuel derivatives, net — — (0.13)
(Gains) losses on ship sales and impairments 5.08 (0.01) (0.05)
Restructuring expenses 0.06 0.01 —
Other 0.60 0.07 0.01
Adjusted earnings per share $ (7.47) $ 4.40 $ 4.26
Explanations of Non-GAAP Financial Measures
We use adjusted net income (loss) and adjusted earnings per share as non-GAAP financial measures of our cruise segments’ and the
company’s financial performance. These non-GAAP financial measures are provided along with U.S. GAAP net income (loss) and
U.S. GAAP diluted earnings per share.
We believe that gains and losses on ship sales, impairment charges, restructuring costs and other gains and losses are not part of our
core operating business and are not an indication of our future earnings performance. Therefore, we believe it is more meaningful for
these items to be excluded from our net income (loss) and earnings per share and, accordingly, we present adjusted net income (loss)
and adjusted earnings per share excluding these items.
Adjusted EBITDA is a non-GAAP measure, and we believe that the presentation of Adjusted EBITDA provides additional
information to investors about our operating profitability adjusted for certain non-cash items and other gains and expenses that we
believe are not part of our core operating business and are not an indication of our future earnings performance. Further, we believe
that the presentation of Adjusted EBITDA provides additional information to investors about our ability to operate our business in
compliance with the restrictions set forth in our debt agreements. We define Adjusted EBITDA as adjusted net income (loss) adjusted
for (i) interest, (ii) taxes and, (iii) depreciation and amortization. There are material limitations to using Adjusted EBITDA. Adjusted
EBITDA does not take into account certain significant items that directly affect our net income (loss). These limitations are best
addressed by considering the economic effects of the excluded items independently, and by considering Adjusted EBITDA in
conjunction with net income (loss) as calculated in accordance with U.S. GAAP.
The presentation of our non-GAAP financial information is not intended to be considered in isolation from, as substitute for, or
superior to the financial information prepared in accordance with U.S. GAAP. It is possible that our non-GAAP financial measures
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may not be exactly comparable to the like-kind information presented by other companies, which is a potential risk associated with
using these measures to compare us to other companies.
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2019 Compared to 2018
Revenues
Consolidated
Cruise passenger ticket revenues made up 68% of our 2019 total revenues. Cruise passenger ticket revenues increased by $174 million, or
1.2%, to $14.1 billion in 2019 from $13.9 billion in 2018.
This increase was caused by:
• $607 million - 4.2% capacity increase in ALBDs
• $113 million - increase in air transportation revenues
These increases were partially offset by:
• $305 million - net unfavorable foreign currency translational impact
• $240 million - decrease in cruise ticket revenues, driven primarily by sourcing in Continental Europe, our Alaska programs and
net unfavorable foreign currency transactional impact, partially offset by price improvements in the Caribbean program.
Onboard and other cruise revenues made up 30% of our 2019 total revenues. Onboard and other cruise revenues increased by $1.7 billion,
or 35%, to $6.3 billion in 2019 from $4.7 billion in 2018.
This increase was caused by:
• $1.4 billion - related to the gross presentation of shore excursions and other onboard revenues as a result of the adoption of new
revenue accounting guidance
• $200 million - 4.2% capacity increase in ALBDs
• $124 million - higher onboard spending by our guests
These increases were partially offset by net unfavorable foreign currency translational impact of $89 million.
Tour and other revenues made up 1.9% of our 2019 total revenues. Tour and other revenues increased by $118 million, or 43%, to $390
million in 2019 from $272 million in 2018.
This increase was driven by the sale of Advanced Air Quality Systems to third parties, which accounted for $117 million.
Concession revenues, which are included in onboard and other revenues, increased by $24 million, or 2.1%, to $1.2 billion in 2019 from
$1.1 billion in 2018.
NAA Segment
Cruise passenger ticket revenues made up 66% of our NAA segment’s 2019 total revenues. Cruise passenger ticket revenues increased by
$159 million, or 1.8% to $9.0 billion in 2019 from $8.8 billion in 2018.
This increase was caused by:
• $152 million - 1.8% capacity increase in ALBDs
• $57 million - increase in air transportation revenues
These increases were partially offset by net unfavorable foreign currency translational impact of $20 million.
The remaining 34% of our NAA segment’s 2019 total revenues were comprised of onboard and other cruise revenues, which increased by
$1.2 billion, or 36%, to $4.6 billion in 2019 from $3.4 billion in 2018.
This increase was caused by:
• $1.1 billion - related to the gross presentation of shore excursions and other onboard revenues as a result of the adoption of new
revenue accounting guidance
• $58 million - 1.8% capacity increase in ALBDs
• $39 million - higher onboard spending by our guests
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Concession revenues, which are included in onboard and other revenues, increased by $14 million, or 1.7%, to $821 million in 2019 from
$807 million in 2018.
EA Segment
Cruise passenger ticket revenues made up 78% of our EA segment’s 2019 total revenues. Cruise passenger ticket revenues increased by
$68 million, or 1.3%, to $5.2 billion in 2019 from $5.1 billion in 2018.
This increase was caused by:
• $451 million - 8.6% capacity increase in ALBDs
• $50 million - increase in air transportation revenues
These increases were partially offset by
• $285 million - net unfavorable foreign currency translational impact
• $159 million - decrease in cruise ticket revenues, driven primarily by sourcing in Continental Europe
The remaining 22% of our EA segment’s 2019 total revenues were comprised of onboard and other cruise revenues, which increased by
$339 million, or 31%, to $1.4 billion in 2019 from $1.1 billion in 2018.
This increase was caused by:
• $268 million - related to the gross presentation of shore excursions and other onboard revenues as a result of the adoption of new
revenue accounting guidance
• $96 million - 8.6% capacity increase in ALBDs
• $51 million - higher onboard spending by our guests
These increases were partially offset by net unfavorable foreign currency translational impact of $79 million.
Concession revenues, which are included in onboard and other revenues, increased by $10 million, or 3.0%, to $337 million in 2019 from
$328 million in 2018.
Costs and Expenses
Consolidated
Operating costs and expenses increased by $1.8 billion or 16%, to $12.9 billion in 2019 from $11.1 billion in 2018.
This increase was caused by:
• $1.4 billion - related to the gross presentation of shore excursions and other onboard revenues as a result of the adoption of new
revenue accounting guidance
• $464 million - 4.2% capacity increase in ALBDs
• $88 million - increase in tour and other costs
• $87 million - higher commissions, transportation and other expenses
• $67 million - increase in various other ship operating costs
• $35 million - gains on ship sales in 2018, net of gains on ship sales in 2019
These increases were partially offset by:
• $221 million - net favorable foreign currency translational impact
• $63 million - lower fuel prices
• $62 million - improved fuel consumption per ALBD
• $46 million - lower dry-dock expenses and repair and maintenance expenses
Selling and administrative expenses increased by $30 million, or 1.2%, to $2.5 billion in 2019 compared to $2.5 billion in 2018.
Depreciation and amortization expenses increased by $143 million, or 7.1%, to $2.2 billion in 2019 from $2.0 billion in 2018.
NAA Segment
Operating costs and expenses increased by $1.2 billion, or 17%, to $8.4 billion in 2019 from $7.2 billion in 2018.
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This increase was caused by:
• $1.1 billion - related to the gross presentation of shore excursions and other onboard revenues as a result of the adoption of new
revenue accounting guidance
• $124 million - 1.8% capacity increase in ALBDs
• $59 million - higher commissions, transportation and other
These increases were partially offset by:
• $58 million - lower fuel prices
• $40 million - lower cruise payroll and related expenses
Selling and administrative expenses increased by $24 million, or 1.7%, to $1.4 billion in 2019 compared to $1.4 billion in 2018.
Depreciation and amortization expenses increased by $100 million, or 7.9%, to $1.4 billion in 2019 from $1.3 billion in 2018.
EA Segment
Operating costs and expenses increased by $470 million, or 13%, to $4.1 billion in 2019 from 3.7 billion in 2018.
This increase was caused by:
• $307 million - 8.6% capacity increase in ALBDs
• $268 million - related to the gross presentation of shore excursions and other onboard revenues as a result of the adoption of new
revenue accounting guidance
• $46 million - gains on ship sales in 2018, net of gains on ship sales in 2019
• $39 million - increase in various other ship operating costs
• $36 million - higher commissions, transportation and other
• $28 million - higher cruise payroll and related expenses
These increases were partially offset by:
• $203 million - net favorable foreign currency translational impact
• $38 million - improved fuel consumption per ALBD
• $21 million - lower dry-dock expenses and repair and maintenance expenses
Selling and administrative expenses decreased by $7 million, or 1.0%, to $744 million in 2019 from $751 million in 2018.
Depreciation and amortization expenses increased by $34 million, or 5.5%, to $645 million in 2019 from $611 million in 2018.
Operating Income
Our consolidated operating income decreased by $49 million, or 1.5%, to $3.3 billion in 2019 compared to $3.3 billion in 2018. Our NAA
segment’s operating income increased by $62 million, or 2.6%, to $2.5 billion in 2019 from $2.4 billion in 2018, and our EA segment’s
operating income decreased by $90 million, or 7.5%, to $1.1 billion in 2019 from $1.2 billion in 2018. These changes were primarily due
to the reasons discussed above.
Nonoperating Income (Expense) (in millions)
Year Ended
(in millions) November 30, 2018
Unrealized gains on fuel derivatives, net $ 94
Realized losses on fuel derivatives, net (35)
Gains on fuel derivatives, net $ 59
There were no unrealized or realized gains or losses on fuel derivatives in 2019.
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Liquidity, Financial Condition and Capital Resources
We have taken, and continue to take, significant actions to preserve cash and obtain additional financing to increase our liquidity. Since
March 2020, we have raised $19 billion through a series of transactions. We have completed the following transactions:
• In March 2020, we fully drew down our $3.0 billion Revolving Facility.
• In March 2020, we settled outstanding derivatives resulting in proceeds of $220 million.
• In April 2020, we completed (i) a public offering of 71,875,000 shares of Carnival Corporation’s common stock at a price per
share of $8.00, resulting in net proceeds of $556 million and (ii) a private offering of $2.0 billion aggregate principal amount of
5.75% Convertible Notes.
• In April 2020, we completed a private offering of $4.0 billion aggregate principal amount of 11.5% 2023 First Lien Notes that
mature on April 1, 2023.
• In April 2020, we extended a $166 million euro-denominated bank loan, originally maturing in 2020, to March 2021.
• Certain of the counterparties to our export credit facilities have offered the Debt Holiday. We have entered into supplemental
agreements or side letters for the Debt Holiday amendments to defer certain principal repayments otherwise due through March 31,
2021 through the creation of separate tranches of loans with repayments made over the following four years. We have also entered
into supplemental agreements or side letters to waive the Financial Covenant for our export credit facilities through November 30,
2021 or December 31, 2021, as applicable. We will be required to comply with the Financial Covenant beginning with the next
testing date of February 28, 2022.
• We obtained amendments to waive compliance with the Financial Covenant for certain of our bank loans through November 30,
2022. We will be required to comply with the covenant (at various thresholds) beginning with the next testing date of February 28,
2023. We have also obtained covenant amendments for the remaining applicable bank loans through their respective maturity
dates.
• To further enhance our liquidity, as well as comply with the dividend restrictions contained in our recent debt agreements, we have
suspended the payment of dividends on, and the repurchase of, the common stock of Carnival Corporation and the ordinary shares
of Carnival plc.
• In June 2020, we borrowed an aggregate principal amount of $2.8 billion in two tranches ($1.9 billion and €800 million), under the
2025 Secured Term Loan that matures on June 30, 2025. The U.S. dollar tranche bears interest at a rate per annum equal to
adjusted LIBOR (with a 1% floor) plus 7.5%. The euro tranche bears interest at a rate per annum equal to EURIBOR (with a 0%
floor) plus 7.5%.
• In July 2020, we extended a $337 million euro-denominated floating rate bank loan originally maturing in 2021 to 2022.
• In July 2020, we issued an aggregate principal amount of $1.3 billion in two tranches ($775 million and €425 million), under 2026
Second Lien Notes, that mature on February 1, 2026. The U.S. dollar tranche bears interest at a rate of 10.5% per year. The euro
tranche bears interest at a rate of 10.1% per year.
• In August 2020, we completed a registered direct offering of 99.2 million shares of Carnival Corporation's common stock at a price
per share of $14.02 to a limited number of holders of the Convertible Notes as part of the August Registered Direct Offering. We
used the proceeds from the August Registered Direct Offering to repurchase $886 million aggregate principal amount of the
Convertible Notes and pay accrued interest thereon in privately negotiated transactions.
• In August 2020, we issued an aggregate principal amount of $900 million of second-priority senior secured notes that mature on
August 1, 2027. The 2027 Second Lien Notes bear interest at a rate of 9.9% per year.
• In October 2020, we completed our $1.0 billion ATM equity offering program that was announced on September 15, 2020, under
which we sold 67.1 million shares of Carnival Corporation common stock.
• In September 2020, we borrowed $610 million under an export credit facility due in semi-annual installments through 2032.
• In October 2020, we borrowed $889 million under an export credit facility due in semi-annual installments through 2032.
• In November 2020, we completed the sale of 94.5 million shares of Carnival Corporation common stock under our $1.5 billion
ATM equity offering program that was announced on November 10, 2020.
• In November 2020, we completed two registered direct offerings of 57.4 million shares and 10.4 million shares of Carnival
Corporation common stock at a price per share of $18.05 and $17.59, respectively, to a limited number of holders of the
Convertible Notes as part of the November Registered Direct Offerings. We used the proceeds from the November Registered
Direct Offerings to repurchase $590 million aggregate principal amount of the Convertible Notes and pay accrued interest thereon
in privately negotiated transactions.
• In November 2020, we issued an aggregate principal amount of $2.0 billion in two tranches ($1.5 billion and €500 million) under
the 2026 Senior Unsecured Notes that mature on March 1, 2026. The U.S. dollar tranche bears interest at a rate of 7.6% per year.
The euro tranche bears interest at a rate of 7.6% per year.
• In December 2020, we borrowed $1.5 billion under export credit facilities due in semi-annual installments through 2032.
• In December 2020 and January 2021, we entered into agreements to amend the Revolving Facility and the agreements governing
our bank loans, respectively, for relief under the Debt to Capital Covenant. We are in the process of negotiating similar
amendments to our funded export credit facilities and our unfunded export credit facilities to obtain amendments under the Debt to
Capital Covenant (compliance with which is currently waived through November 30, 2021 or December 31, 2021, as applicable,
with the next testing date of February 28, 2022).
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We have raised significant capital and expect to further raise additional capital, including equity. Our access to and cost of financing depend
on, among other things, global economic conditions, conditions in the global financing markets, the availability of sufficient amounts of
financing, our prospects and our credit ratings. In addition, certain of our debt instruments contain provisions that may limit our ability to
incur or guarantee additional indebtedness.
As of November 30, 2020, we have a total of $9.5 billion of cash and cash equivalents. During fiscal 2021, the company expects to enter
into financial transactions to optimize its capital structure which may include opportunistically enhancing liquidity.
The company's monthly average cash burn rate for the fourth quarter 2020 was $500 million, which was slightly better than expected due to
the timing of capital expenditures. The company expects the monthly average cash burn rate for the first quarter 2021 to be approximately
$600 million. This rate includes ongoing ship operating and administrative expenses, working capital changes (excluding changes in
customer deposits), interest expense and capital expenditures (net of unfunded export credit facilities) and also excludes scheduled debt
maturities as well as other cash collateral to be provided (which may increase in the future). The company continues to explore
opportunities to further reduce its monthly cash burn rate.
Since March 2020, Moody’s and S&P Global have downgraded our credit ratings. As of November 30, 2020 all of our ratings are non
investment grade.
We had working capital of $1.9 billion as of November 30, 2020 compared to a working capital deficit of $7.1 billion as of November 30,
2019. The change from a working capital deficit to a working capital surplus was caused by an increase in cash and cash equivalents and a
decrease in customer deposits, partially offset by increases in short-term borrowings. Historically, we operate with a substantial working
capital deficit. This deficit is mainly attributable to the fact that, under our business model, substantially all of our passenger ticket receipts
are collected in advance of the applicable sailing date. These advance passenger receipts generally remain a current liability until the sailing
date. The cash generated from these advance receipts is used interchangeably with cash on hand from other sources, such as our borrowings
and other cash from operations. The cash received as advanced receipts can be used to fund operating expenses, pay down our debt, make
long-term investments or any other use of cash. Included within our working capital are $1.9 billion and $4.7 billion of customer deposits as
of November 30, 2020 and 2019, respectively. We have provided and expect to continue to provide flexibility to guests with bookings on
sailings cancelled due to the pause by allowing guests to receive enhanced FCCs or elect to receive refunds in cash. We have paid and
expect to continue to pay cash refunds of customer deposits with respect to a portion of these cancelled cruises. The amount of cash refunds
to be paid may depend on the level of guest acceptance of FCCs and future cruise cancellations. We record a liability for these FCCs only to
the extent we have received cash from guests with bookings on cancelled sailings. As of November 30, 2020, approximately 55% of guests
affected have requested cash refunds. In addition, we have a relatively low-level of accounts receivable and limited investment in
inventories. We expect that we will continue to have working capital deficits in the future.
Sources and Uses of Cash
Operating Activities
Our business used $6.3 billion of net cash in operations during 2020, a decrease of $11.8 billion, compared to $5.5 billion provided in 2019.
This decrease was due to the pause of our guest cruise operations during the year. During 2019, our business provided $5.5 billion of net
cash from operations, a decrease of $73 million, or 1.3%, compared to $5.5 billion in 2018.
Investing Activities
During 2020, net cash used in investing activities was $3.2 billion. This was caused by:
• Capital expenditures of $2.8 billion for our ongoing new shipbuilding program
• Capital expenditures of $868 million for ship improvements and replacements, information technology and buildings and
improvements
• Proceeds from sales of ships of $334 million
• Proceeds of $220 million from the settlement of outstanding derivatives
During 2019, net cash used in investing activities was $5.3 billion. This was caused by:
• Capital expenditures of $3.8 billion for our ongoing new shipbuilding program
• Capital expenditures of $1.7 billion for ship improvements and replacements, information technology and buildings and
improvements
• Proceeds from sales of ships of $26 million
During 2018, net cash used in investing activities was $3.5 billion. This was caused by:
• Capital expenditures of $2.1 billion for our ongoing new shipbuilding program
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• Capital expenditures of $1.7 billion for ship improvements and replacements, information technology and buildings and
improvements
• Proceeds from sales of ships of $389 million
• Purchase of minority interest of $135 million
Financing Activities
During 2020, net cash provided by financing activities of $18.6 billion was caused by the following:
• Net proceeds from short-term borrowings of $2.9 billion in connection with our availability of, and needs for, cash at various times
throughout the period, including proceeds of $3.1 billion from the Revolving Facility
• Repayments of $1.6 billion of long-term debt
• Issuances of $15.0 billion of long-term debt
• Payments of cash dividends of $689 million
• Net proceeds of $3.0 billion from our public offerings of Carnival Corporation common stock
• Net proceeds of $222 million from a registered direct offering of Carnival Corporation common stock used to repurchase a portion
of the Convertible Notes
During 2019, net cash used in financing activities of $655 million was substantially all due to the following:
• Net repayments from short-term borrowings of $605 million in connection with our availability of, and needs for, cash at various
times throughout the period
• Repayments of $1.7 billion of long-term debt
• Issuances of $3.7 billion of long-term debt
• Payments of cash dividends of $1.4 billion
• Purchases of $603 million of Carnival Corporation common stock and Carnival plc ordinary shares in open market transactions
under our Repurchase Program
During 2018, net cash used in financing activities of $1.5 billion was substantially all due to the following:
• Net proceeds of short-term borrowings of $417 million in connection with our availability of, and needs for, cash at various times
throughout the period
• Repayments of $1.6 billion of long-term debt
• Issuances of $2.5 billion of long-term debt
• Payments of cash dividends of $1.4 billion
• Purchases of $1.5 billion of Carnival Corporation common stock and Carnival plc ordinary shares in open market transactions
under our Repurchase Program
Future Commitments (in millions)
Payments Due by
(in millions) 2021 2022 2023 2024 2025 Thereafter Total
Debt (a) $ 6,180 $ 4,035 $ 7,275 $ 2,076 $ 4,438 $ 9,264 $ 33,268
Port facilities and other operating leases 204 176 159 147 143 936 1,765
Other long-term liabilities reflected on the balance
sheet (b) 7 225 88 71 57 243 690
New ship growth capital 3,201 4,692 3,273 793 1,076 — 13,036
Other long-term commitments 219 98 54 52 37 18 478
Short-term purchase obligations 249 — — — — — 249
Total Contractual Cash Obligations $ 10,061 $ 9,225 $ 10,849 $ 3,139 $ 5,751 $ 10,461 $ 49,487
(a) Includes principal as well as estimated interest payments. Excludes repayments of undrawn export credits.
(b) Represents cash outflows for certain of our long-term liabilities which can be reasonably estimated. The primary outflows are for
estimates of our compensation plans’ obligations, crew and guest claims and certain deferred income taxes. Customer deposits and
certain other deferred income taxes have been excluded from the table because they do not require a cash settlement in the future.
Capital Expenditure Forecast
Our annual capital expenditure forecast consists of new ship growth capital and estimated capital improvements.
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(in billions) 2021 2022 2023 2024 2025
Annual capital expenditure forecast $ 4.2 $ 6.2 $ 4.8 $ 2.8 $ 3.1
Funding Sources
As of November 30, 2020, we had $9.5 billion of cash and cash equivalents. In addition, we had $8.0 billion of export credit facilities to
fund ship deliveries planned through 2024.
(in billions) 2021 2022 2023 2024
Future export credit facilities at November 30, 2020 (a) $ 2.1 $ 3.4 $ 1.9 $ 0.6
(a) Under the terms of these export credit facilities, we are required to comply with the Financial Covenant and the Debt to Capital
Covenant, among others. We have entered into supplemental agreements or side letters to amend our agreements with respect to
the Financial Covenant and the Debt to Capital Covenant for our unfunded export credit facilities to waive compliance through
November 30, 2021 (with the next testing date of February 28, 2022) for an aggregate principal amount of $5.2 billion, and through
December 31, 2021 (with the next testing date of February 28, 2022) for an aggregate principal amount of $2.8 billion.
Many of our debt agreements contain various other financial covenants as described in the consolidated financial statements. At November
30, 2020, we were in compliance with the applicable debt covenants.
Share Repurchase Program
Under a share repurchase program effective 2004, we had been authorized to repurchase Carnival Corporation common stock and Carnival
plc ordinary shares (the “Repurchase Program”). On June 15, 2020, to enhance our liquidity and comply with restrictions in our recent
financing transactions, the Boards of Directors terminated the Repurchase Program.
Off-Balance Sheet Arrangements
We are not a party to any off-balance sheet arrangements, including guarantee contracts, retained or contingent interests, certain derivative
instruments and variable interest entities that either have, or are reasonably likely to have, a current or future material effect on our
consolidated financial statements.
Quantitative and Qualitative Disclosures About Market Risk
For a discussion of our hedging strategies and market risks, see the discussion below and the consolidated financial statements.
Fuel Price Risks
Substantially all our exposure to market risk for changes in fuel prices relates to the consumption of fuel on our ships. We have been
installing Advanced Air Quality Systems on our ships, which are aiding in partially mitigating the financial impact from the ECAs and
global 0.5% sulfur requirements.
Foreign Currency Exchange Rate Risks
Operational Currency Risks
Our operations primarily utilize the U.S. dollar, Australian dollar, euro or sterling as their functional currencies. Our operations also have
revenue and expenses denominated in non-functional currencies. Movements in foreign currency exchange rates will affect our financial
statements.
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Investment Currency Risks
The foreign currency exchange rates were as follows:
November 30,
USD to 1: 2020 2019
AUD $ 0.74 $ 0.68
CAD $ 0.77 $ 0.75
EUR $ 1.20 $ 1.10
GBP $ 1.33 $ 1.29
RMB $ 0.15 $ 0.14
If the November 30, 2019 currency exchange rates had been used to translate our November 30, 2020 non-U.S. dollar functional currency
operations’ assets and liabilities (instead of the November 30, 2020 U.S. dollar exchange rates), our total assets would have been lower by
$1.2 billion and our total liabilities would have been lower by $869 million.
Newbuild Currency Risks
At November 30, 2020, our remaining newbuild currency exchange rate risk primarily relates to euro-denominated newbuild contract
payments, which represent a total unhedged commitment of $6.9 billion and relates to newbuilds scheduled to be delivered from 2020
through 2025 to non-euro functional currency brands. The functional currency cost of each of these ships will increase or decrease based on
changes in the exchange rates until the unhedged payments are made under the shipbuilding contract. We may enter into additional foreign
currency derivatives to mitigate some of this foreign currency exchange rate risk. Based on a 10% change in euro to U.S. dollar exchange
rates as of November 30, 2020, the remaining unhedged cost of these ships would have a corresponding change of $695 million.
Interest Rate Risks
The composition of our debt, including the effect of interest rate swaps, was as follows:
November 30, 2020
Fixed rate 41 %
EUR fixed rate 16 %
Floating rate 23 %
EUR floating rate 16 %
GBP floating rate 3%
At November 30, 2020, we had interest rate swaps that have effectively changed $248 million of EURIBOR-based floating rate euro debt to
fixed rate euro debt. Based on a 10% change in the November 30, 2020 market interest rates, our 2020 interest expense on floating rate debt,
including the effect of our interest rate swaps, would have changed by an insignificant amount.
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SELECTED
SELECTED FINANCIAL DATA
FINANCIAL DATA
Theselected
The consolidated
selected financial
consolidated data presented
financial data below for 2016
presented below through 2020 and
for 2016 as of the
through end of
2020 andeach such
as of theyear, except
end of for the
each such derived
exceptarefor
year, data,
statistical
from
the our consolidated
statistical data,financial statements
are derived fromandourshould be read in conjunction
consolidated with those consolidated
financial statements and should financial
be readstatements and the related
in conjunction notes.
with those
consolidated financial statements and the related notes.
Years Ended November Years30,Ended November 30,
(in millions,
except (in millions, except per share, per ton and currency data) 20202020 20192019 2018 2018 20172017 20162016
per
share,
Statements
Statementsofof Income
Income Data
Data
per Revenues
Revenues $$5,5955,595 $ $20,825
20,825 $ 18,881
$ 18,881 $$17,510
17,510 $ $16,389
16,389
ton and
currency Operating income (loss)
Operating income (loss) $ (8,865) $
$ (8,865) $ 3,2763,276 $ 3,325
$ 3,325 $$ 2,809 $ $3,071
2,809 3,071
data)
Net income (loss)
Net income (loss) $ (10,236) $ 2,990
$ (10,236) $ 2,990 $ 3,152
$ 3,152 $ 2,606
$ 2,606 $ 2,779
$ 2,779
Earnings
Earningsper pershare
share
BasicBasic $$(13.20)
(13.20) $ $4.344.34 $ 4.45
$ 4.45 $$3.613.61 $ $3.733.73
Diluted
Diluted $$(13.20)
(13.20) $ $4.324.32 $ $ 4.44 4.44 $$3.593.59 $ $3.723.72
Adjusted net income
Adjusted net income (loss)(loss) $ (5,793) $
$ (5,793) $ 3,0413,041 $ 3,029
$ 3,029 $$2,770 2,770 $ $2,580
2,580
Adjusted
Adjustedearnings
earningsper pershare
share- -diluted
diluted $$(7.47)(7.47) $ $4.404.40 $ $ 4.26 4.26 $$3.823.82 $ $3.453.45
Dividends
Dividendsdeclared
declaredper pershare
share $$0.50 0.50 $ $2.002.00 $ 1.95 $ 1.95 $$1.601.60 $ $1.351.35
Statistical
Statistical Data
Data
ALBDs (in
ALBDs (in thousands)
thousands) (a) (a) 87,424
87,424 83,872 83,872 82,303
82,303 80,002 80,002
Occupancy percentage
Occupancy percentage (a) (a) 106.8 106.8 %106.9 %
106.9 % 105.9 %
105.9 % 105.9 % %
105.9
Passengers
Passengers carried
carried(in
(inthousands)
thousands) (a) (a) 12,866
12,866 12,407 12,407 12,130
12,130 11,520 11,520
Fuel consumption in metric tons (in thousands)
Fuel consumption in metric tons (in thousands) 1,915 1,915 3,312 3,312 3,296 3,296 3,2863,286 3,2333,233
Fuel cost per metric ton consumed
Fuel cost per metric ton consumed $$430 430 $$ 472 472 $ 491
$ 491 $$378 378 $ 283
$ 283
Currencies
Currencies(USD (USDtoto1)1)
AUDAUD $$0.68 0.68 $ $0.700.70 $ 0.75 $ 0.75 $$0.770.77 $ $0.740.74
CADCAD $$0.74 0.74 $ $0.750.75 $ 0.78 $ 0.78 $$0.770.77 $ $0.750.75
EUREUR $$1.13 1.13 $ $1.121.12 $ 1.18 $ 1.18 $$1.121.12 $ $1.111.11
GBPGBP $$1.28 1.28 $ $1.271.27 $ 1.34 $ 1.34 $$1.281.28 $ $1.371.37
RMBRMB $$0.14 0.14 $ $0.140.14 $ 0.15 $ 0.15 $$0.150.15 $ $0.150.15
(in millions) As of November 30, As of November 30,
2020 2019 2018 2017 2016
(in millions) 2020 2019 2018 2017 2016
Balance Sheet
Balance Sheet
Total
Totalassets
assets $ 53,593
$ 53,593 $ $45,058
45,058 $$42,401
42,401 $ $40,778
40,778 $$38,881
38,881
Total
Totaldebt
debt $ 26,957
$ 26,957 $ $11,503
11,503 $$10,323
10,323 $ $9,195
9,195 $$9,399
9,399
(a)Due to
(a) Duethe impact
to the of of
COVID-19
impact in 2020,
COVID-19 current
in 2020, year data
current year isdata
notis not
meaningful and isand
meaningful included in
not is not table.
the in
included the table.
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(in millions, Years Ended November 30,
except
for (in millions, except for per share data): 2020 2019 2018 2017 2016
per share Net income (loss)
data):
U.S. GAAP net income (loss) $(10,236) $ 2,990 $ 3,152 $ 2,606 $ 2,779
Unrealized (gains) losses on fuel derivatives, net — — (94) (227) (236)
(Gains) losses on ship sales and impairments 3,934 (6) (38) 387 (2)
Restructuring expenses 47 10 1 3 2
Other 462 47 8 — 37
Adjusted net income (loss) $ (5,793) $ 3,041 $ 3,029 $ 2,770 $ 2,580
Interest expense, net of capitalized interest 895 206 194 198 223
Interest income (18) (23) (14) (9) (6)
Income tax expense, net (17) 71 54 60 49
Depreciation and amortization 2,241 2,160 2,017 1,846 1,738
Adjusted EBITDA $ (2,692) $ 5,455 $ 5,280 $ 4,865 $ 4,584
Weighted-average shares outstanding 775 692 710 725 747
Earnings per share
U.S. GAAP earnings per share $ (13.20) $ 4.32 $ 4.44 $ 3.59 $ 3.72
Unrealized (gains) losses on fuel derivatives, net — — (0.13) (0.31) (0.32)
(Gains) losses on ship sales and impairments 5.08 (0.01) (0.05) 0.53 —
Restructuring expenses 0.06 0.01 — — —
Other 0.60 0.07 0.01 — 0.05
Adjusted earnings per share $ (7.47) $ 4.40 $ 4.26 $ 3.82 $ 3.45
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COMMON STOCK AND ORDINARY SHARES
Carnival Corporation’s common stock, together with paired trust shares of beneficial interest in the P&O Princess Special Voting
Trust, which holds a Special Voting Share of Carnival plc, is traded on the NYSE under the symbol “CCL.” Carnival plc’s ordinary
shares trade on the London Stock Exchange under the symbol “CCL.” Carnival plc’s American Depositary Shares (“ADSs”), each
one of which represents one Carnival plc ordinary share, are traded on the NYSE under the symbol “CUK.” The depositary for the
ADSs is JPMorgan Chase Bank, N.A.
As of January 14, 2021, there were 2,953 holders of record of Carnival Corporation common stock and 30,258 holders of record of
Carnival plc ordinary shares and 382 holders of record of Carnival plc ADSs. The past performance of our share prices cannot be
relied on as a guide to their future performance.
On March 30, 2020, we suspended the payment of dividends on the common stock of Carnival Corporation and the ordinary shares
of Carnival plc.
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STOCK PERFORMANCE GRAPHS
Carnival Corporation
The following graph compares the Price Performance of $100 if invested in Carnival Corporation common stock with the Price
Performance of $100 if invested in each of the Dow Jones U.S. Recreational Services Index (the “Dow Jones Recreational
Index”), the FTSE 100 Index and the S&P 500 Index. The Price Performance, as used in the Performance Graph, is calculated
by assuming $100 is invested at the beginning of the period in Carnival Corporation common stock at a price equal to the
market value. At the end of each year, the total value of the investment is computed by taking the number of shares owned,
assuming Carnival Corporation dividends are reinvested, multiplied by the market price of the shares.
5-Year Cumulative Total Returns
$200
$150
DOLLARS
$100
$50
$0
2015 2016 2017 2018 2019 2020
Carnival Corporation Common Stock Dow Jones Recreational Index
FTSE 100 Index S&P 500 Index
Assumes $100 Invested on November 30, 2015
Assumes Dividends Reinvested
Years Ended November 30,
2015 2016 2017 2018 2019 2020
Carnival Corporation Common Stock $ 100 $ 105 $ 136 $ 129 $ 100 $ 45
Dow Jones Recreational Index $ 100 $ 98 $ 131 $ 130 $ 127 $ 81
FTSE 100 Index $ 100 $ 92 $ 112 $ 105 $ 117 $ 103
S&P 500 Index $ 100 $ 108 $ 133 $ 141 $ 164 $ 192
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Carnival plc
The following graph compares the Price Performance of $100 invested in Carnival plc ADSs, each representing one ordinary
share of Carnival plc, with the Price Performance of $100 invested in each of the indexes noted below. The Price Performance
is calculated in the same manner as previously discussed.
5-Year Cumulative Total Returns
$200
$150
DOLLARS
$100
$50
$0
2015 2016 2017 2018 2019 2020
Carnival plc ADS Dow Jones Recreational Index
FTSE 100 Index S&P 500 Index
Assumes $100 Invested on November 30, 2015
Assumes Dividends Reinvested
Years Ended November 30,
2015 2016 2017 2018 2019 2020
Carnival plc ADS $ 100 $ 101 $ 133 $ 124 $ 93 $ 39
Dow Jones Recreational Index $ 100 $ 98 $ 131 $ 130 $ 127 $ 81
FTSE 100 Index $ 100 $ 92 $ 112 $ 105 $ 117 $ 103
S&P 500 Index $ 100 $ 108 $ 133 $ 141 $ 164 $ 192
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SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
Our passenger ticket revenues are seasonal. Historically, demand for cruises has been greatest during our third quarter, which
includes the Northern Hemisphere summer months, although 2020 was adversely impacted by COVID-19. 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 earned during this period. This historical trend has been disrupted by the pause in our global cruise operations. In addition,
substantially all of Holland America Princess Alaska Tours’ revenue and net income (loss) is generated from May through September
in conjunction with Alaska’s cruise season. During 2020, the Alaska cruise season was adversely impacted by the effects of
COVID-19. The quarterly data below, in the opinion of management, include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair statement of the results for the unaudited interim periods.
(in millions, except per share data)
2020 Quarters Ended
(in millions, except per share data) February 29 May 31 August 31 November 30
Revenues $ 4,789 $ 740 $ 31 $ 34
Operating income (loss) $ (713) $ (4,177) $ (2,333) $ (1,642)
Net income (loss) $ (781) $ (4,374) $ (2,858) $ (2,222)
Earnings per share
Basic $ (1.14) $ (6.07) $ (3.69) $ (2.41)
Diluted $ (1.14) $ (6.07) $ (3.69) $ (2.41)
Adjusted
Adjustednet
netincome
income(loss)
(loss)[see
(a) footnote (a)] $ 150 $ (2,382) $ (1,699) $ (1,862)
Adjusted
Adjusted earnings per share--diluted
earnings per share diluted[see
(a) footnote (a)] $ 0.22 $ (3.30) $ (2.19) $ (2.02)
Dividends declared per share $ 0.50 $ — $ — $ —
footnote
(a) (a): Adjustednet
Adjusted net income
income (loss) andand
(loss) adjusted fully diluted
adjusted earningsearnings
fully diluted per share were computed
per share wereascomputed
follows: as follows:
(in millions, except per share data)
2020 Quarters Ended
(in millions, except per share data) February 29 May 31 August 31 November 30
Net income (loss)
U.S. GAAP net income (loss) $ (781) $ (4,374) $ (2,858) $ (2,222)
(Gains) losses on ship sales and impairments 928 1,953 937 115
Restructuring expenses — 39 3 5
Other 3 — 220 240
Adjusted net income (loss) $ 150 $ (2,382) $ (1,699) $ (1,862)
Weighted-average shares outstanding 684 721 775 922
Earnings per share
U.S. GAAP earnings per share $ (1.14) $ (6.07) $ (3.69) $ (2.41)
(Gains) losses on ship sales and impairments 1.36 2.71 1.21 0.12
Restructuring expenses — 0.05 — 0.01
Other 0.01 — 0.28 0.26
Adjusted earnings per share $ 0.22 $ (3.30) $ (2.19) $ (2.02)
F-68
Table of Contents (in millions,
except
per
share
data) 2019 Quarters Ended
(in millions, except per share data) February 28 May 31 August 31 November 30
Revenues $ 4,673 $ 4,838 $ 6,533 $ 4,781
Operating income (loss) $ 386 $ 515 $ 1,890 $ 484
Net income (loss) $ 336 $ 451 $ 1,780 $ 423
Earnings per share
Basic $ 0.48 $ 0.65 $ 2.58 $ 0.62
Diluted $ 0.48 $ 0.65 $ 2.58 $ 0.61
Adjusted
Adjustednet
netincome
income(loss)
(loss)[see
(a) footnote (a)] $ 338 $ 457 $ 1,819 $ 427
Adjusted
Adjusted earnings per share- -diluted
earnings per share diluted[see
(a) footnote (a)] $ 0.49 $ 0.66 $ 2.63 $ 0.62
Dividends declared per share $ 0.50 $ 0.50 $ 0.50 $ 0.50
(a) Adjusted net income (loss) and adjusted fully diluted earnings per share were computed as follows:
footnote (a): Adjusted net income (loss) and adjusted fully diluted earnings per share were computed as follows:
(in millions, except
per share
data) 2019 Quarters Ended
(in millions, except per share data) February 28 May 31 August 31 November 30
Net income (loss)
U.S. GAAP net income (loss) $ 336 $ 451 $ 1,780 $ 423
(Gains) losses on ship sales and impairments 2 (16) 14 (5)
Restructuring expenses — — — 10
Other — 22 25 —
Adjusted net income (loss) $ 338 $ 457 $ 1,819 $ 427
Weighted-average shares outstanding 695 693 691 688
Earnings per share
U.S. GAAP earnings per share $ 0.48 $ 0.65 $ 2.58 $ 0.61
(Gains) losses on ship sales and impairments — (0.02) 0.02 (0.01)
Restructuring expenses — — — 0.01
Other — 0.03 0.04 —
Adjusted earnings per share $ 0.49 $ 0.66 $ 2.63 $ 0.62
F-69
Exhibit 21
SUBSIDIARIES OF CARNIVAL CORPORATION AND CARNIVAL PLC
The following is a list of all of our subsidiaries, their jurisdiction of incorporation and the names under which they do business.
Jurisdiction of
Incorporation
Name of Subsidiary or Organization
1972 Productions, Inc. Florida
6348 Equipment LLC Florida
A.C.N. 098 290 834 Pty. Ltd. Australia
A.J. Juneau Dock, LLC Alaska
Adventure Island Ltd. Bahamas
AIDA Kundencenter GmbH Germany
Air-Sea Holiday GmbH Switzerland
Alaska Hotel Properties LLC Delaware
Barcelona Cruise Terminal SLU Spain
Bay Island Cruise Port, S.A. Honduras
Belize Cruise Terminal Limited Belize
Carnival (UK) Limited UK
Carnival Bahamas FC Limited Bahamas
Carnival Bahamas Holdings Limited Bahamas
Carnival Corporation & plc Asia Pte. Ltd. Singapore
Carnival Corporation Hong Kong Limited Hong Kong
Carnival Corporation Korea Ltd. Korea
Carnival Corporation Ports Group Japan KK Japan
Carnival Finance, LLC Delaware
Carnival Grand Bahama Investment Limited Bahamas
Carnival Investments Limited Bahamas
Carnival Japan, Inc. Japan
Carnival License Holdings Limited Bahamas
Carnival Maritime GmbH Germany
Carnival North America LLC Florida
Carnival Port Holdings Limited UK
Carnival Ports Inc. Florida
Carnival Support Services India Private Limited India
Carnival Technical Services (UK) Limited UK
Carnival Technical Services Finland Limited Finland
Carnival Technical Services GmbH Germany
Carnival Technical Services, Inc. Japan
Carnival Vanuatu Limited Vanuatu
CC U.S. Ventures, Inc. Delaware
CCL Gifts, LLC Florida
Costa Crociere PTE Ltd. Singapore
Costa Crociere S.p.A. Italy
Costa Cruceros S.A. Argentina
Exhibit 21
Jurisdiction of
Incorporation
Name of Subsidiary or Organization
Costa Cruise Lines Inc. Florida
Costa Cruise Lines UK Limited UK
Costa Cruises Shipping Services (Shanghai) Company Limited China
Costa Cruises Travel Agency (Shanghai) Co., Ltd. China
Costa Cruzeiros Agencia Maritima e Turismo Ltda. Brazil
Costa Group Digital & Strategic Services GmbH Germany
Costa International B.V. Netherlands
Costa Kreuzfahrten GmbH Switzerland
Cozumel Cruise Terminal S.A. de C.V. Mexico
Creative Travel Lab, Ltd. Bahamas
Cruise Ships Catering & Services International N.V. Curacao
Cruise Terminal Services, S.A. de C.V. Mexico
Cruiseport Curacao C.V. Curacao
CSSC Carnival Italy Cruise Investment S.r.L Italy
D.R. Cruise Port, Ltd. Bahamas
Ecospray Technologies S.r.L. Italy
F.P.M. SAS French Polynesia
F.P.P. SAS French Polynesia
Fleet Maritime Services (Bermuda) Limited Bermuda
Fleet Maritime Services Holdings (Bermuda) Limited Bermuda
Fleet Maritime Services International Limited Bermuda
Gibs, Inc. Delaware
Global Experience Innovators, Inc. Florida
Global Fine Arts, Inc. Florida
Global Shipping Service (Shanghai) Co., Ltd. China
Grand Cruise Shipping Unipessoal LdA Portugal (Madeira)
Grand Turk Cruise Center Ltd. Turks & Caicos
GXI, LLC Delaware
HAL Antillen N.V. Curacao
HAL Beheer B.V. Netherlands
HAL Cruises Limited Bahamas
HAL Maritime Ltd. British Virgin Islands
HAL Nederland N.V. Curacao
HAL Properties Limited Bahamas
HAL Services B.V. Netherlands
Holding Division Iberocruceros SLU Spain
Holland America Line Inc. Washington
Holland America Line N.V. Curacao
Holland America Line Paymaster of Washington LLC Washington
Holland America Line U.S.A., Inc. Delaware
HSE Hamburg School of Entertainment GmbH Germany
Ibero Cruzeiros Ltda. Brazil
Iberocruceros SLU Spain
Exhibit 21
Jurisdiction of
Incorporation
Name of Subsidiary or Organization
Information Assistance Corporation Bermuda
International Cruise Services, S.A. de C.V. Mexico
International Leisure Travel Inc. Panama
International Maritime Recruitment Agency, S.A. de C.V. Mexico
Milestone N.V. Curacao
Navitrans S.R.L. Italy
Ocean Bahamas Innovation Ltd. Bahamas
Ocean Medallion Fulfillment, Ltd. Bahamas
Operadora Catalina S.r.L. Dominican Republic
P&O Princess American Holdings UK
P&O Princess Cruises International Limited UK
P&O Princess Cruises Pension Trustee Limited UK
P&O Properties (California), Inc. California
P&O Travel Limited UK
Prestige Cruises Management S.A.M. Monaco
Prestige Cruises N.V. Curacao
Princess Bermuda Holdings, Ltd. Bermuda
Princess Cays Ltd. Bahamas
Princess Cruise Corporation Inc. Panama
Princess Cruise Lines, Ltd. Bermuda
Princess Cruises and Tours, Inc. Delaware
Princess U.S. Holdings, Inc. California
RCT Maintenance & Related Services S.A. Honduras
RCT Pilots & Related Services, S.A. Honduras
RCT Security & Related Services S.A. Honduras
Roatan Cruise Terminal S.A. de C.V. Honduras
Royal Hyway Tours, Inc. Alaska
Santa Cruz Terminal, S.L. Spain
Seabourn Cruise Line Limited Bermuda
SeaVacations Limited UK
SeaVacations UK Limited UK
Shanghai Coast Cruise Consulting Co. Lda China
Ship Care (Bahamas) Limited Bahamas
Sitmar Cruises Inc. Panama
Spanish Cruise Services N.V. Curacao
Sunshine Shipping Corporation Ltd. Bermuda
T&T International, Inc. Texas
Tour Alaska, LLC Delaware
Transnational Services Corporation Panama
Trident Insurance Company Ltd. Bermuda
Westmark Hotels of Canada, Ltd. Canada
Westmark Hotels, Inc. Alaska
Westours Motor Coaches, LLC Alaska
Exhibit 21
Jurisdiction of
Incorporation
Name of Subsidiary or Organization
Wind Surf Limited Bahamas
World Leading Cruise Management (Shanghai) Co., Ltd. China
Exhibit 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the joint Registration Statements on Form S-3 (File Nos. 333-106553,
333-106553-01, 333-223555 and 333-223555-01) of Carnival Corporation and Carnival plc, the joint Registration Statements on Form S-8
(File Nos. 333-173465, 333-173465-01, 333-237616 and 333-237616-01) of Carnival Corporation and Carnival plc, the Registration
Statement on Form S-3 (File No. 033-63563) of Carnival Corporation, the Registration Statements on Form S-8 (File Nos. 333-105672,
333-43885 and 33-51195) of Carnival Corporation and the Registration Statements on Form S-8 (File Nos. 333-124640 and 333-104609)
of Carnival plc, of our report dated January 26, 2021 relating to the financial statements and the effectiveness of internal control over
financial reporting, which appears in the 2020 Annual Report to Shareholders, which is incorporated by reference in this joint Annual
Report on Form 10-K.
/s/PricewaterhouseCoopers LLP
Miami, Florida
January 26, 2021
Exhibit 24
POWER OF ATTORNEY
The undersigned directors of Carnival Corporation, a company incorporated under the laws of the Republic of Panama, and Carnival plc, a
company organized and existing under the laws of England and Wales, do and each of them does, hereby constitute and appoint Arnold W.
Donald, David Bernstein and Arnaldo Perez, his or her true and lawful attorneys-in-fact and agents, and each of them with full power to act
without the others, for him or her and in his or her name, place and stead, to sign the Carnival Corporation and Carnival plc joint Annual
Report on Form 10-K (“Form 10-K”) for the year ended November 30, 2020 and any and all future amendments thereto; and to file said
Form 10-K and any such amendments with all exhibits thereto, and any and all other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands and seals on this 19th day of January, 2021.
CARNIVAL CORPORATION CARNIVAL PLC
/s/ Micky Arison /s/ Micky Arison
Micky Arison Micky Arison
Chairman of the Board of Directors Chairman of the Board of Directors
/s/ Sir Jonathon Band /s/ Sir Jonathon Band
Sir Jonathon Band Sir Jonathon Band
Director Director
/s/ Jason Glen Cahilly /s/ Jason Glen Cahilly
Jason Glen Cahilly Jason Glen Cahilly
Director Director
/s/ Helen Deeble /s/ Helen Deeble
Helen Deeble Helen Deeble
Director Director
/s/ Jeffrey J. Gearhart /s/ Jeffrey J. Gearhart
Jeffrey J. Gearhart Jeffrey J. Gearhart
Director Director
/s/ Richard J. Glasier /s/ Richard J. Glasier
Richard J. Glasier Richard J. Glasier
Director Director
/s/ Katie Lahey /s/ Katie Lahey
Katie Lahey Katie Lahey
Director Director
/s/ Sir John Parker /s/ Sir John Parker
Sir John Parker Sir John Parker
Director Director
/s/ Stuart Subotnick /s/ Stuart Subotnick
Stuart Subotnick Stuart Subotnick
Director Director
/s/ Laura Weil /s/ Laura Weil
Laura Weil Laura Weil
Director Director
/s/ Randall J. Weisenburger /s/ Randall J. Weisenburger
Randall J. Weisenburger Randall J. Weisenburger
Director Director
Exhibit 31.1
I, Arnold W. Donald, certify that:
1. I have reviewed this Annual Report on Form 10-K of Carnival Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period
covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d–15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: January 26, 2021
/s/ Arnold W. Donald
Arnold W. Donald
President and Chief Executive Officer
Exhibit 31.2
I, David Bernstein, certify that:
1. I have reviewed this Annual Report on Form 10-K of Carnival Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period
covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d–15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: January 26, 2021
/s/ David Bernstein
David Bernstein
Chief Financial Officer and Chief Accounting Officer
Exhibit 31.3
I, Arnold W. Donald, certify that:
1. I have reviewed this Annual Report on Form 10-K of Carnival plc;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period
covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: January 26, 2021
/s/ Arnold W. Donald
Arnold W. Donald
President and Chief Executive Officer
Exhibit 31.4
I, David Bernstein, certify that:
1. I have reviewed this Annual Report on Form 10-K of Carnival plc;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period
covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: January 26, 2021
/s/ David Bernstein
David Bernstein
Chief Financial Officer and Chief Accounting Officer
Exhibit 32.1
In connection with the Annual Report on Form 10-K for the year ended November 30, 2020 as filed by Carnival Corporation with the
Securities and Exchange Commission on the date hereof (the “Report”), I certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of
Carnival Corporation.
Date: January 26, 2021
/s/ Arnold W. Donald
Arnold W. Donald
President and Chief Executive Officer
Exhibit 32.2
In connection with the Annual Report on Form 10-K for the year ended November 30, 2020 as filed by Carnival Corporation with the
Securities and Exchange Commission on the date hereof (the “Report”), I certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of
Carnival Corporation.
Date: January 26, 2021
/s/ David Bernstein
David Bernstein
Chief Financial Officer and Chief Accounting Officer
Exhibit 32.3
In connection with the Annual Report on Form 10-K for the year ended November 30, 2020 as filed by Carnival plc with the Securities and
Exchange Commission on the date hereof (the “Report”), I certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of
Carnival plc.
Date: January 26, 2021
/s/ Arnold W. Donald
Arnold W. Donald
President and Chief Executive Officer
Exhibit 32.4
In connection with the Annual Report on Form 10-K for the year ended November 30, 2020 as filed by Carnival plc with the Securities and
Exchange Commission on the date hereof (the “Report”), I certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of
Carnival plc.
Date: January 26, 2021
/s/ David Bernstein
David Bernstein
Chief Financial Officer and Chief Accounting Officer
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