10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 31, 2018

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-9610		Commission file number: 001-15136
Carnival Corporation		Carnival plc
(Exact name of registrant as specified in its charter)		(Exact name of registrant as specified in its charter)
Republic of Panama		England and Wales
(State or other jurisdiction of incorporation or organization)		(State or other jurisdiction of incorporation or organization)
59-1562976		98-0357772
(I.R.S. Employer Identification No.)		(I.R.S. Employer Identification No.)
3655 N.W. 87th Avenue Miami, Florida 33178-2428		Carnival House, 100 Harbour Parade, Southampton SO15 1ST, United Kingdom
(Address of principal executive offices) (Zip Code)		(Address of principal executive offices) (Zip Code)
(305) 599-2600		011 44 23 8065 5000
(Registrant’s telephone number, including area code)		(Registrant’s telephone number, including area code)
None		None
(Former name, former address and former fiscal year, if changed since last report)		(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.  Yes  ☑ No  ☐    

Indicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit such files).    Yes  ☑    No  ☐

Indicate by check mark whether the registrants are large accelerated filers, accelerated filers, non-accelerated filers, smaller reporting companies, or emerging growth companies. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 

Large accelerated filers ☑ Accelerated filers ☐ Non-accelerated filers ☐ Smaller reporting companies ☐ Emerging growth companies ☐

If emerging growth companies, indicate by check mark if the registrants have elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐ 

Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☑

At September 20, 2018, Carnival Corporation had outstanding 526,850,769 shares of Common Stock, $0.01 par value. At September 20, 2018, Carnival plc had outstanding 198,323,911 Ordinary Shares $1.66 par value, one Special Voting Share, GBP 1.00 par value and 526,850,769 Trust Shares of beneficial interest in the P&O Princess Special Voting Trust.

CARNIVAL CORPORATION & PLC

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 6.	Exhibits	38
SIGNATURES		40

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

CARNIVAL CORPORATION & PLC

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(in millions, except per share data)

	Three Months Ended August 31,						Nine Months Ended August 31,
	2018			2017			2018			2017
Revenues
Cruise
Passenger ticket	$	4,353		$	4,138		$	10,694		$	9,814
Onboard and other	1,316			1,223			3,509			3,237
Tour and other	167			154			222			200
	5,836			5,515			14,425			13,251
Operating Costs and Expenses
Cruise
Commissions, transportation and other	760			699			2,000			1,781
Onboard and other	207			184			485			438
Payroll and related	537			520			1,638			1,552
Fuel	434			307			1,166			914
Food	275			270			804			774
Other ship operating	655			947			2,115			2,293
Tour and other	90			86			140			132
	2,958			3,013			8,348			7,884
Selling and administrative	573			547			1,794			1,649
Depreciation and amortization	511			473			1,510			1,368
Goodwill and trademark impairment	—			89			—			89
	4,042			4,122			11,653			10,990
Operating Income	1,794			1,393			2,772			2,261
Nonoperating Income (Expense)
Interest income	5			3			10			7
Interest expense, net of capitalized interest	(49		)	(49		)	(147		)	(150		)
Gains (losses) on fuel derivatives, net	4			7			61			(19		)
Other (expense) income, net	(9		)	14			2			7
	(50		)	(25		)	(74		)	(155		)
Income Before Income Taxes	1,744			1,368			2,699			2,106
Income Tax Expense, Net	(37		)	(39		)	(40		)	(46		)
Net Income	$	1,707		$	1,329		$	2,659		$	2,060
Earnings Per Share
Basic	$	2.42		$	1.84		$	3.73		$	2.85
Diluted	$	2.41		$	1.83		$	3.72		$	2.84
Dividends Declared Per Share	$	0.50		$	0.40		$	1.45		$	1.15

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

3

CARNIVAL CORPORATION & PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(in millions)

	Three Months Ended August 31,				Nine Months Ended August 31,
	2018		2017		2018			2017
Net Income	$	1,707	$	1,329	$	2,659		$	2,060
Items Included in Other Comprehensive Income (Loss)
Change in foreign currency translation adjustment	15		285		(50		)	543
Other	—		24		(9		)	66
Other Comprehensive Income (Loss)	14		309		(59		)	609
Total Comprehensive Income	$	1,722	$	1,638	$	2,600		$	2,669

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

4

CARNIVAL CORPORATION & PLC

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in millions, except par values)

	August 31, 2018			November 30, 2017
ASSETS
Current Assets
Cash and cash equivalents	$	526		$	395
Trade and other receivables, net	366			312
Inventories	405			387
Prepaid expenses and other	458			502
Total current assets	1,755			1,596
Property and Equipment, Net	35,178			34,430
Goodwill	2,949			2,967
Other Intangibles	1,182			1,200
Other Assets	689			585
	$	41,753		$	40,778
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Short-term borrowings	$	632		$	485
Current portion of long-term debt	688			1,717
Accounts payable	666			762
Accrued liabilities and other	1,616			1,877
Customer deposits	4,418			3,958
Total current liabilities	8,020			8,800
Long-Term Debt	8,297			6,993
Other Long-Term Liabilities	783			769
Contingencies
Shareholders’ Equity
Common stock of Carnival Corporation, $0.01 par value; 1,960 shares authorized; 656 shares at 2018 and 655 shares at 2017 issued	7			7
Ordinary shares of Carnival plc, $1.66 par value; 217 shares at 2018 and 2017 issued	358			358
Additional paid-in capital	8,741			8,690
Retained earnings	24,921			23,292
Accumulated other comprehensive loss	(1,840		)	(1,782		)
Treasury stock, 129 shares at 2018 and 122 shares at 2017 of Carnival Corporation and 44 shares at 2018 and 32 shares at 2017 of Carnival plc, at cost	(7,533		)	(6,349		)
Total shareholders’ equity	24,654			24,216
	$	41,753		$	40,778

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

5

CARNIVAL CORPORATION & PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in millions)

	Nine Months Ended August 31,
	2018			2017
OPERATING ACTIVITIES
Net income	$	2,659		$	2,060
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	1,510			1,368
Impairments	16			392
(Gains) losses on fuel derivatives, net	(61		)	19
Share-based compensation	49			48
Other, net	(22		)	52
	4,151			3,939
Changes in operating assets and liabilities
Receivables	(61		)	(1		)
Inventories	(19		)	(18		)
Prepaid expenses and other	76			(1		)
Accounts payable	(94		)	(101		)
Accrued liabilities and other	(166		)	25
Customer deposits	549			455
Net cash provided by operating activities	4,436			4,298
INVESTING ACTIVITIES
Purchases of property and equipment	(2,784		)	(2,296		)
Proceeds from sales of ships	282			—
Payments of fuel derivative settlements	(37		)	(157		)
Other, net	(67		)	34
Net cash used in investing activities	(2,606		)	(2,419		)
FINANCING ACTIVITIES
Proceeds from (repayments of) short-term borrowings, net	182			(335		)
Principal repayments of long-term debt	(1,271		)	(1,012		)
Proceeds from issuance of long-term debt	1,618			467
Dividends paid	(1,003		)	(797		)
Purchases of treasury stock	(1,205		)	(305		)
Other, net	(28		)	(22		)
Net cash used in financing activities	(1,707		)	(2,004		)
Effect of exchange rate changes on cash and cash equivalents	7			11
Net increase (decrease) in cash and cash equivalents	131			(114		)
Cash and cash equivalents at beginning of period	395			603
Cash and cash equivalents at end of period	$	526		$	489

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

6

CARNIVAL CORPORATION & PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 – General

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

Basis of Presentation

The Consolidated Statements of Income and the Consolidated Statements of Comprehensive Income for the three and nine months ended August 31, 2018 and 2017, the Consolidated Balance Sheet at August 31, 2018 and the Consolidated Statements of Cash Flows for the nine months ended August 31, 2018 and 2017 are unaudited and, in the opinion of our management, contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement. Our interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in the Carnival Corporation & plc 2017 joint Annual Report on Form 10-K (“Form 10-K”) filed with the U.S. Securities and Exchange Commission on January 29, 2018. Our operations are seasonal and results for interim periods are not necessarily indicative of the results for the entire year.

Accounting Pronouncements

The Financial Accounting Standards Board (the “FASB”) issued amended guidance, Compensation - Retirement Benefits - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires the bifurcation of service costs and other components of net benefit cost. The presentation of the other components of net benefit cost have been recorded in other income. On December 1, 2017, we adopted this guidance using the retrospective transition method for the presentation of the service cost component and other components of net benefit cost. The impact of adopting this guidance was immaterial to our consolidated financial statements, and as such, prior period information was not revised.

The FASB issued guidance, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. When effective, this standard will replace most existing revenue recognition guidance in U.S. generally accepted accounting principles (“U.S. GAAP”). The standard also requires more detailed disclosures and provides additional guidance for transactions that were not comprehensively addressed in U.S. GAAP. This guidance is required to be adopted by us in the first quarter of 2019. We have elected the modified retrospective adoption method which requires entities to apply the new revenue standard only to the current period consolidated financial statements and record a cumulative-effect adjustment to the December 1, 2018 opening balance of retained earnings, if any. We are substantially complete with our evaluation of changes to our revenues using the model supported by the new revenue standard. The adoption of this guidance will result in the gross presentation of prepaid travel agent commissions, shore excursions and other onboard revenues and costs, all of which were historically presented net, and will require additional disclosures. It is not expected to have a material impact to the timing of our recognition of revenues.

The FASB issued amended guidance, Business Combinations - Clarifying the Definition of a Business,which assists entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance is required to be adopted by us in the first quarter of 2019 on a prospective basis. Early adoption is permitted, including adoption in an interim period. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

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

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

7

The FASB issued amended guidance, Service Concession Arrangements, which clarifies that the grantor in a service arrangement should be considered the customer of the operating entity in all cases. This guidance is required to be adopted by us in the first quarter of 2019 and can be applied using either a retrospective or a modified retrospective approach. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

The FASB issued guidance, Leases, which requires an entity to recognize both assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. This guidance is required to be adopted by us in the first quarter of 2020 and must be applied using a modified retrospective approach which allows entities to either apply the new lease standard to the beginning of the earliest period presented or only to the current period consolidated financial statements. Early adoption is permitted. The initial adoption of this guidance is expected to increase both our total assets and total liabilities, reflecting the lease rights and obligations arising from our lease arrangements, and will require additional disclosures. We are currently evaluating if this guidance will have any other impact on our consolidated financial statements.

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

Other

Cruise passenger ticket revenues include fees, taxes and charges collected by us from our guests. The portion of these fees, taxes and charges included in passenger ticket revenues and commissions, transportation and other costs were $174 million and $161 million and $465 million and $440 million for the three and nine months ended August 31, 2018 and 2017, respectively.

NOTE 2 – Unsecured Debt

At August 31, 2018, our short-term borrowings consisted of euro- denominated commercial paper of $398 million and a euro-denominated bank loan of $234 million due in 2019. For the nine months ended August 31, 2018 and 2017, we had borrowings of $2 million and $111 million and repayments of $2 million and $364 million of commercial paper with original maturities greater than three months.

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

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

In March 2018, we borrowed $370 million under a euro-denominated floating rate bank loan due in 2020 and borrowed $567 million under an export credit facility due in semi-annual installments through 2030.

In April 2018, we borrowed $229 million under an export credit facility due in semi-annual installments through 2030.

In June 2018, we entered into a $914 million export credit facility, which may be drawn in euro or U.S. dollars in 2022 and will be due in semi-annual installments through 2034. The interest rate on this export credit facility can be fixed or floating, at our discretion.

NOTE 3 – Contingencies

Litigation

In the normal course of our business, various claims and lawsuits have been filed or are pending against us. Most of these claims and lawsuits are covered by insurance and the maximum amount of our liability, net of any insurance recoverables, is typically limited to our self-insurance retention levels. We believe the ultimate outcome of these claims and lawsuits will not have a material impact on our consolidated financial statements.

8

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 our 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.

NOTE 4 – Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks

Fair Value Measurements

Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and is measured using inputs in one of the following three categories:

• Level 1 measurements are based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

• Level 2 measurements are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or market data other than quoted prices that are observable for the assets or liabilities.

• Level 3 measurements are based on unobservable data that are supported by little or no market activity and are significant to the fair value of the assets or liabilities.

Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, certain estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized in a current or future market exchange.

Financial Instruments that are not Measured at Fair Value on a Recurring Basis

	August 31, 2018								November 30, 2017
	Carrying Value		Fair Value						Carrying Value		Fair Value
(in millions)			Level 1		Level 2		Level 3				Level 1		Level 2		Level 3
Assets
Long-term other assets (a)	$	136	$	—	$	37	$	98	$	126	$	—	$	49	$	75
Total	$	136	$	—	$	37	$	98	$	126	$	—	$	49	$	75
Liabilities
Fixed rate debt (b)	$	5,308	$	—	$	5,463	$	—	$	5,588	$	—	$	5,892	$	—
Floating rate debt (b)	4,372		—		4,409		—		3,658		—		3,697		—
Total	$	9,680	$	—	$	9,872	$	—	$	9,246	$	—	$	9,589	$	—

(a) Long-term other assets are comprised of notes receivable. The fair values of our Level 2 notes receivable were based on estimated future cash flows discounted at appropriate market interest rates. The fair values of our Level 3 notes receivable were estimated using risk-adjusted discount rates.

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

9

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

	August 31, 2018						November 30, 2017
(in millions)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	526	$	—	$	—	$	395	$	—	$	—
Restricted cash	15		—		—		26		—		—
Marketable securities held in rabbi trusts (a)	6		—		—		97		—		—
Derivative financial instruments	—		5		—		—		15		—
Total	$	547	$	5	$	—	$	518	$	15	$	—
Liabilities
Derivative financial instruments	$	—	$	40	$	—	$	—	$	161	$	—
Total	$	—	$	40	$	—	$	—	$	161	$	—

(a) The use of marketable securities held in rabbi trusts is restricted to funding certain deferred compensation and non-qualified U.S. pension plans.

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

Valuation of Goodwill and Trademarks

	Goodwill
(in millions)	NAA (a) Segment		EA (b) Segment			Total
At November 30, 2017	$	1,898	$	1,069		$	2,967
Foreign currency translation adjustment	—		(18		)	(18		)
At August 31, 2018	$	1,898	$	1,050		$	2,949

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

(b)    Europe & Asia (“EA”)

	Trademarks
(in millions)	NAA Segment		EA Segment			Total
At November 30, 2017	$	927	$	252		$	1,179
Foreign currency translation adjustment	—		(5		)	(5		)
At August 31, 2018	$	927	$	247		$	1,174

The determination of our reporting unit goodwill and trademark fair values includes numerous assumptions that are subject to various risks and uncertainties. We believe that we have made reasonable estimates and judgments. A change in the conditions, circumstances or strategy, may result in a need to recognize an impairment charge.

10

Derivative Instruments and Hedging Activities

(in millions)	Balance Sheet Location	August 31, 2018		November 30, 2017
Derivative assets
Derivatives designated as hedging instruments
Net investment hedges (a)	Prepaid expenses and other	$	5	$	3
Foreign currency zero cost collars (b)	Prepaid expenses and other	—		12
Total derivative assets		$	5	$	15
Derivative liabilities
Derivatives designated as hedging instruments
Net investment hedges (a)	Accrued liabilities and other	$	—	$	13
	Other long-term liabilities	13		17
Interest rate swaps (c)	Accrued liabilities and other	8		10
	Other long-term liabilities	13		17
		35		57
Derivatives not designated as hedging instruments
Fuel (d)	Accrued liabilities and other	6		95
	Other long-term liabilities	—		9
		6		104
Total derivative liabilities		$	40	$	161

(a) At August 31, 2018 and November 30, 2017, we had foreign currency swaps totaling $160 million and $324 million, respectively, that are designated as hedges of our net investments in foreign operations with a euro-denominated functional currency. At August 31, 2018, this foreign currency swap settles in September 2019.

(b) At August 31, 2018 and November 30, 2017, we had foreign currency derivatives consisting of foreign currency zero cost collars that are designated as foreign currency cash flow hedges for a portion of our euro-denominated shipbuilding payments. See “Newbuild Currency Risks” below for additional information regarding these derivatives.

(c) We have euro interest rate swaps designated as cash flow hedges whereby we receive floating interest rate payments in exchange for making fixed interest rate payments. These interest rate swap agreements effectively changed $422 million at August 31, 2018 and $479 million at November 30, 2017 of EURIBOR-based floating rate euro debt to fixed rate euro debt. At August 31, 2018, these interest rate swaps settle through March 2025.

(d) At August 31, 2018 and November 30, 2017, we had fuel derivatives consisting of zero cost collars on Brent crude oil (“Brent”) to cover a portion of our estimated fuel consumption through 2018. See “Fuel Price Risks” below for additional information regarding these derivatives.

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

	August 31, 2018
(in millions)	Gross Amounts		Gross Amounts Offset in the Balance Sheet		Total Net Amounts Presented in the Balance Sheet		Gross Amounts not Offset in the Balance Sheet			Net Amounts
Assets	$	5	$	—	$	5	$	(5	)	$	—
Liabilities	$	40	$	—	$	40	$	(5	)	$	36
	November 30, 2017
(in millions)	Gross Amounts		Gross Amounts Offset in the Balance Sheet		Total Net Amounts Presented in the Balance Sheet		Gross Amounts not Offset in the Balance Sheet			Net Amounts
Assets	$	15	$	—	$	15	$	(8	)	$	7
Liabilities	$	161	$	—	$	161	$	(8	)	$	153

11

The effective gain (loss) portions of our derivatives qualifying and designated as hedging instruments recognized in other comprehensive income were as follows:

	Three Months Ended August 31,						Nine Months Ended August 31,
(in millions)	2018			2017			2018			2017
Net investment hedges	$	3		$	(17	)	$	13		$	(33	)
Foreign currency zero cost collars – cash flow hedges	$	(1	)	$	17		$	(11	)	$	52
Interest rate swaps – cash flow hedges	$	1		$	1		$	5		$	5

There are no credit risk related contingent features in our derivative agreements, except for bilateral credit provisions within our fuel derivative counterparty agreements. These provisions require cash collateral to be posted or received to the extent the fuel derivative fair value payable to or receivable from an individual counterparty exceeds $100 million. At August 31, 2018 and November 30, 2017, no collateral was required to be posted to or received from our fuel derivative counterparties.

The amount of estimated cash flow hedges’ unrealized gains and losses that are expected to be reclassified to earnings in the next twelve months is not significant. 

Financial Risks

Fuel Price Risks

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. We are also adding new, more fuel efficient ships to our fleet and are strategically disposing of less fuel efficient ships. We have Brent call options and Brent put options, collectively referred to as zero cost collars, that establish ceiling and floor prices and mitigate a portion of our economic risk attributable to potential fuel price increases through the end of 2018.

	Three Months Ended August 31,						Nine Months Ended August 31,
(in millions)	2018			2017			2018			2017
Unrealized gains on fuel derivatives, net	$	8		$	65		$	90		$	134
Realized losses on fuel derivatives, net	(4		)	(57		)	(29		)	(153		)
Gains (losses) on fuel derivatives, net	$	4		$	7		$	61		$	(19	)

Foreign Currency Exchange Rate Risks

Overall Strategy

We manage our exposure to fluctuations in foreign currency exchange rates through our normal operating and financing activities, including netting certain exposures to take advantage of any natural offsets and, when considered appropriate, through the use of derivative and non-derivative financial instruments. Our primary focus is to monitor our exposure to, and manage, the economic foreign currency exchange risks faced by our operations and realized if we exchange one currency for another. We currently only hedge 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. Our investments in foreign operations are of a long-term nature. We have $5.5 billionand $861 millionof euro- and sterling-denominated debt, respectively, including the effect of foreign currency swaps, which provides an economic offset for our operations with euro and sterling functional

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currency. We also partially mitigate our net investment currency exposures by denominating a portion of our foreign currency intercompany payables in our foreign operations’ functional currencies. 

Newbuild Currency Risks

Our shipbuilding contracts are typically denominated in euros. Our decision to hedge a non-functional currency ship commitment for our cruise brands is made on a case-by-case basis, considering the amount and duration of the exposure, market volatility, economic trends, our overall expected net cash flows by currency and other offsetting risks. We use foreign currency derivative contracts to manage foreign currency exchange rate risk for some of our ship construction payments. At August 31, 2018, for the following newbuild, we had foreign currency zero cost collars for a portion of euro-denominated shipyard payments. These collars are designated as cash flow hedges.

	Entered Into	Matures in	Weighted-Average Floor Rate		Weighted- Average Ceiling Rate
Nieuw Statendam	2016	November 2018	$	1.05	$	1.25

If the spot rate is between the ceiling and floor rates on the date of maturity, then we would not owe or receive any payments under these collars.

At August 31, 2018, 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 $10.5 billion and relates to newbuilds scheduled to be delivered in 2019 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 or early retirement of existing debt.

Concentrations of Credit Risk

As part of our ongoing control procedures, we monitor concentrations of credit risk associated with financial and other institutions with which we conduct significant business. We seek to minimize these credit risk exposures, including counterparty nonperformance primarily associated with our cash equivalents, investments, committed financing facilities, contingent obligations, derivative instruments, insurance contracts and new ship progress payment guarantees, by:

• Conducting business with large, well-established financial institutions, insurance companies and export credit agencies

• Diversifying our counterparties 

• Having guidelines regarding credit ratings and investment maturities that we follow to help safeguard liquidity and minimize risk

• Generally requiring collateral and/or guarantees to support notes receivable on significant asset sales, long-term ship charters and new ship progress payments to shipyards 

We currently believe the risk of nonperformance by any of our significant counterparties is remote. At August 31, 2018, our exposures under foreign currency and fuel derivative contracts and interest rate swap agreements 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. Our credit exposure also includes contingent obligations related to cash payments received directly by travel agents and tour operators for cash collected by them on cruise sales in Australia and most of Europe where we are obligated to honor our guests’ cruise payments made by them to their travel agents and tour operators regardless of whether we have received these payments. Concentrations of credit risk associated with these trade receivables, charter-hire agreements and contingent obligations are not considered to be material, principally due to the large number of unrelated accounts, the nature of these contingent obligations and their short maturities. We have not experienced significant credit losses on our trade receivables, charter-hire agreements and contingent obligations. We do not normally require collateral or other security to support normal credit sales.

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NOTE 5 – Segment Information

Beginning in the first quarter of 2018, we revised our operating segments due to changes in our internal reporting as a result of the recent strategic realignment of our business in Australia. The presentation of prior period segment information has been revised to reflect this change. Our operating segments are reported on the same basis as the internally reported information that is provided to our chief operating decision maker (“CODM”), who is the President 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. Ourfour 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 represents 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.

	Three Months Ended August 31,
(in millions)	Revenues		Operating costs and expenses			Selling and administrative		Depreciation and amortization		Operating income (loss)
2018
NAA	$	3,805	$	1,981		$	333	$	323	$	1,168
EA	1,832		891			172		150		621
Cruise Support	31		(4		)	64		28		(57		)
Tour and Other	167		90			4		10		62
	$	5,836	$	2,958		$	573	$	511	$	1,794
2017
NAA	$	3,565	$	1,920		$	320	$	303	$	933		(a)
EA	1,767		1,007			158		147		455
Cruise Support	28		—			65		13		(50		)
Tour and Other	155		86			4		10		55
	$	5,515	$	3,013		$	547	$	473	$	1,393

	Nine Months Ended August 31,
(in millions)	Revenues		Operating costs and expenses		Selling and administrative		Depreciation and amortization		Operating income (loss)
2018
NAA	$	9,325	$	5,385	$	1,039	$	940	$	1,961
EA	4,784		2,783		551		466		984
Cruise Support	94		40		183		76		(204		)
Tour and Other	222		140		22		29		31
	$	14,425	$	8,348	$	1,794	$	1,510	$	2,772
2017
NAA	$	8,744	$	5,073	$	982	$	893	$	1,708		(a)
EA	4,206		2,661		475		411		658
Cruise Support	101		18		180		36		(133		)
Tour and Other	200		132		12		28		28
	$	13,251	$	7,884	$	1,649	$	1,368	$	2,261

(a) Includes $89 million of impairment charges related to NAA’s goodwill and trademarks.

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NOTE 6 – Earnings Per Share

	Three Months Ended August 31,				Nine Months Ended August 31,
(in millions, except per share data)	2018		2017		2018		2017
Net income for basic and diluted earnings per share	$	1,707	$	1,329	$	2,659	$	2,060
Weighted-average shares outstanding	706		723		712		724
Dilutive effect of equity plans	2		3		2		3
Diluted weighted-average shares outstanding	707		726		714		727
Basic earnings per share	$	2.42	$	1.84	$	3.73	$	2.85
Diluted earnings per share	$	2.41	$	1.83	$	3.72	$	2.84

NOTE 7 – Shareholders’ Equity

Effective August 27, 2018, the company approved a modification of the general authorization to repurchase Carnival Corporation common stock and/or Carnival plc ordinary shares (the “Repurchase Program”), which replenished the remaining authorized repurchases at the time of the approval to $1.0 billion. During the nine months ended August 31, 2018, we repurchased 11.8 million shares of Carnival plc ordinary shares and 7.8 million shares of Carnival Corporation common stock for $726 million and $475 million, respectively, under the Repurchase Program. At August 31, 2018, the remaining availability under the Repurchase Program was $987 million.

During the three months ended August 31, 2018, our Boards of Directors declared a dividend to holders of Carnival Corporation common stock and Carnival plc ordinary shares of $0.50 per share.

NOTE 8 – Property and Equipment

In March 2018, we sold and transferred an EA segment 700-passenger capacity ship.

In April 2018, we sold and transferred an EA segment 1,300-passenger capacity ship.

In June 2018, we sold an NAA segment 840-passenger capacity ship. The ship will be transferred to the buyer in July 2019.

In June 2018, we sold an EA segment 1,880-passenger capacity ship. The ship will be transferred to the buyer in August 2019.

In August 2018, we sold an NAA segment 1,680-passenger capacity ship. The ship will be transferred to the buyer in March 2019.

NOTE 9 – Other Assets

In July 2018, we acquired a minority interest in the White Pass & Yukon Route (“White Pass”) division of TWC Enterprises Ltd. that includes White Pass’ port, railroad and retail operations in Skagway, Alaska.

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

Cautionary Note Concerning Factors That May Affect Future Results

Some of the statements, estimates or projections contained in this document are “forward-looking statements” that involve risks, uncertainties and assumptions with respect to us, including some statements concerning future results, outlooks, plans, goals 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:

•    Net revenue yields	•    Net cruise costs, excluding fuel per available lower berth day
•    Booking levels	•    Estimates of ship depreciable lives and residual values
•    Pricing and occupancy	•    Goodwill, ship and trademark fair values
•    Interest, tax and fuel expenses	•    Liquidity
•    Currency exchange rates	•    Adjusted earnings per share

Because forward-looking statements involve risks and uncertainties, there are many factors that could cause our actual results, performance or achievements to differ materially from those expressed or implied by our forward-looking statements. This note contains important cautionary statements of the known factors that we consider could materially affect the accuracy of our forward-looking statements and adversely affect our business, results of operations and financial position. 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:

• The demand for cruises may decline due to adverse world events impacting the ability or desire of people to travel, including conditionsaffecting the safety and security of travel, government regulations and requirements, and decline in consumer confidence

• Incidents, such as ship incidents, security incidents, the spread of contagious diseases and threats thereof, adverse weather conditions or other natural disasters and the related adverse publicity affecting our reputation and the health, safety, security and satisfaction of guests and crew

• Changes in and compliance with laws and regulations relating to environment, health, safety, security, data privacy and protection, tax and anti-corruption under which we operate may lead to litigations, enforcement actions, fines, or penalties

• Disruptions and other damages to our information technology and other networks and operations, breaches in data security, lapses in data privacy, and failure to keep pace with developments in technology

• Ability to recruit, develop and retain qualified shipboard personnel who live on ships away from home for extended periods of time

• Increases in fuel prices and availability of fuel supply

• Fluctuations in foreign currency exchange rates

• Overcapacity and competition in the cruise ship and land-based vacation industry

• Continuing financial viability of our travel agent distribution system, air service providers and other key vendors in our supply chain, as well as reductions in the availability of, and increases in the prices for, the services and products provided by these vendors

• Inability to implement our shipbuilding programs and ship repairs, maintenance and refurbishments on terms that are favorable or consistent with our expectations, as well as increases to our repairs and maintenance expenses and refurbishment costs as our fleet ages

• Geographic regions in which we try to expand our business may be slow to develop and ultimately not develop how we expect

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.

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New Accounting Pronouncements

Refer to our consolidated financial statements for further information on Accounting Pronouncements.

Critical Accounting Estimates

For a discussion of our critical accounting estimates, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that is included in the Form 10-K.

Seasonality

Our revenues from the sale of passenger tickets are seasonal. Historically, demand for cruises has been greatest during our third quarter, which includes the Northern Hemisphere summer months. This higher demand during the third quarter results in higher ticket prices and occupancy levels and, accordingly, the largest share of our operating income is earned during this period. The seasonality of our results also increases due to ships being taken out-of-service for maintenance, which we schedule during non-peak demand periods. In addition, substantially all of Holland America Princess Alaska Tours’ revenue and net income is generated from May through September in conjunction with the Alaska cruise season.

Statistical Information

	Three Months Ended August 31,						Nine Months Ended August 31,
	2018			2017			2018			2017
Available Lower Berth Days (“ALBDs”) (in thousands) (a) (b)	21,475			21,120			62,626			61,541
Occupancy percentage (c)	112.6		%	111.3		%	107.8		%	106.7		%
Passengers carried (in thousands)	3,562			3,441			9,393			9,116
Fuel consumption in metric tons (in thousands)	818			814			2,458			2,463
Fuel consumption in metric tons per thousand ALBDs	38.1			38.5			39.3			40.0
Fuel cost per metric ton consumed	$	531		$	378		$	474		$	371
Currencies (USD to 1)
AUD	$	0.74		$	0.78		$	0.76		$	0.76
CAD	$	0.76		$	0.78		$	0.78		$	0.76
EUR	$	1.16		$	1.15		$	1.20		$	1.11
GBP	$	1.31		$	1.29		$	1.36		$	1.27
RMB	$	0.15		$	0.15		$	0.15		$	0.15

(a) ALBD is a standard measure of passenger capacity for the period that we use to approximate rate and capacity variances, based on consistently applied formulas that we use to perform analyses to determine the main non-capacity driven factors that cause our cruise revenues and expenses to vary. ALBDs assume that each cabin we offer for sale accommodates two passengers and is computed by multiplying passenger capacity by revenue-producing ship operating days in the period.

(b) For the three months ended August 31, 2018 compared to the three months ended August 31, 2017, we had a 1.7% capacity increase in ALBDs comprised of a 3.1% capacity increase in our NAA segment and a 0.8% capacity decrease in our EA segment.

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Our NAA segment’s capacity increase was caused by:

• Full quarter impact from one Carnival Cruise Line 3,970-passenger capacity ship that entered into service in April 2018

• Full quarter impact from one Seabourn 600-passenger capacity ship that entered into service in May 2018

Our EA segment’s capacity decrease was caused by:

• Full quarter impact from one P&O Cruises (UK) 700-passenger capacity ship removed from service in March 2018

• Full quarter impact from one Costa Cruises 1,300-passenger capacity ship removed from service in April 2018

For the nine months ended August 31, 2018 compared to the nine months ended August 31, 2017, we had a 1.8% capacity increase in ALBDs comprised of a 2.2% capacity increase in our NAA segment and a 1.0% capacity increase in our EA segment.

Our NAA segment’s capacity increase was caused by:

• Partial period impact from one Princess Cruises 3,560-passenger capacity ship that entered into service in April 2017

• Partial period impact from one Carnival Cruise Line 3,970-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

These increases were partially offset by the partial period impact from one P&O Cruises (Australia) 1,550-passenger capacity ship removed from service in April 2017.

Our EA segment’s capacity increase was caused by:

• Partial period impact from one AIDA Cruises 3,290-passenger capacity ship that entered into service in June 2017

This increase was 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 Cruises 1,300-passenger capacity ship removed from service in April 2018

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

Three Months Ended August 31, 2018 (“2018”) Compared to Three Months Ended August 31, 2017 (“2017”)

Revenues

Consolidated

Cruise passenger ticket revenues made up 75% of our 2018 total revenues. Cruise passenger ticket revenues increased by $215 million, or 5.2%, to $4.4 billion in 2018 from $4.1 billion in 2017.

This increase was driven by:

• $70 million - 1.7% capacity increase in ALBDs

• $50 million - increase in cruise ticket revenues, driven primarily by price improvements in our European and China programs, partially offset by decrease in our Caribbean program

• $48 million - increase in occupancy

• $30 million - increase in air transportation revenues

• $11 million - foreign currency translational impact from a weaker U.S. dollar against the functional currencies of our foreign operations (“foreign currency translational impact”)

The remaining 25% of 2018 total revenues were substantially all comprised of onboard and other cruise revenues, which increased by $93 million, or 7.6%, to $1.3 billion in 2018 from $1.2 billion in 2017.

This increase was caused by:

•$36 million - higher onboard spending by our guests

•$22 million - increase in other revenues

•$21 million - 1.7% capacity increase in ALBDs

•$14 million - increase in occupancy

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Concession revenues, which are included in onboard and other revenues, increased by $20 million, or 6.0%, to $350 million in 2018 from $331 million in 2017.

NAA Segment

Cruise passenger ticket revenues made up 75% of our NAA segment’s 2018 total revenues. Cruise passenger ticket revenues increased by $168 million, or 6.3%, to $2.8 billion in 2018 compared to $2.7 billion in 2017. 

This increase was caused by:

• $84 million - 3.1% capacity increase in ALBDs

• $35 million - increase in cruise ticket revenues, driven primarily by price improvements in the European program, partially offset by the Caribbean program

• $30 million - increase in air transportation revenues

• $20 million - increase in occupancy

The remaining 25% of our NAA segment’s 2018 total revenues were comprised of onboard and other cruise revenues, which increased by $73 million, or 8.1%, to $969 million in 2018 from $897 million in 2017.

This increase was driven by:

• $28 million - 3.1% capacity increase in ALBDs

• $22 million - higher onboard spending by our guests

• $18 million - increase in other revenues

Concession revenues, which are included in onboard and other revenues, increased by $17 million, or 7.5%, to $251 million in 2018 from $233 million in 2017.

EA Segment

Cruise passenger ticket revenues made up 83% of our EA segment’s 2018 total revenues. Cruise passenger ticket revenues increased by $53 million, or 3.6%, to $1.5 billion in 2018 compared to $1.5 billion in 2017.

This increase was caused by:

• $26 million - increase in occupancy

• $19 million - increase in cruise ticket revenues, driven primarily by price improvements in the European and China programs

• $15 million - foreign currency translational impact

These increases were partially offset by a 0.8% capacity decrease in ALBDs, which accounted for $12 million.

The remaining 17% of our EA segment’s 2018 total revenues were comprised of onboard and other cruise revenues, which increased by $12 million, or 4.1%, to $305 million in 2018 from $292 million in 2017.

Concession revenues, which are included in onboard and other revenues, increased by $2 million, or 2.2%, to $100 million in 2018 from $97 million in 2017.

Costs and Expenses

Consolidated

Operating costs and expenses decreased by $55 million, or 1.8%, to $3.0 billion in 2018 from $3.0 billion in 2017.

This decrease was caused by:

• $304 million - ship impairments in 2017

• $26 million - gains on ship sales in 2018

This decrease was partially offset by:

• $126 million - higher fuel prices

• $49 million - 1.7% capacity increase in ALBD

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• $39 million - higher commissions, transportation and other expenses

• $17 million - higher onboard and other expenses

• $14 million - higher dry-dock expenses and repair and maintenance expenses

• $13 million - increase in occupancy

Selling and administrative expenses increased by $26 million, or 4.8%, to $573 million in 2018 from $547 million in 2017.

Depreciation and amortization expenses increased by $38 million, or 7.9%, to $511 million in 2018 from $473 million in 2017.

Goodwill and trademark impairment charges of $89 million include a goodwill impairment charge of $38 million and a trademark impairment charge of $50 million during 2017.

NAA Segment

Operating costs and expenses increased by $61 million, or 3.2%, to $2.0 billion in 2018 from $1.9 billion in 2017.

This increase was caused by:

• $84 million - higher fuel prices

• $60 million - 3.1% capacity increase in ALBDs

• $40 million - higher commissions, transportation and other expenses

• $15 million - higher onboard and other expenses

• $13 million - higher dry-dock expenses and repair and maintenance expenses

• $12 million - higher cruise payroll and related expenses

These increases were partially offset by:

• $162 million - ship impairments in 2017

Selling and administrative expenses increased by $13 million, or 4.1%, to $333 million in 2018 from $320 million in 2017.

Depreciation and amortization expenses increased by $20 million, or 6.8%, to $323 million in 2018 from $303 million in 2017.

Goodwill and trademark impairment charges of $89 million include a goodwill impairment charge of $38 million and a trademark impairment charge of $50 million during 2017.

EA Segment

Operating costs and expenses decreased by $116 million, or 12%, to $0.9 billion in 2018 from $1.0 billion in 2017.

This decrease was caused by:

• $141 million - ship impairments in 2017

• $10 million - lower dry-dock expenses and repair and maintenance expenses

These decreases were partially offset by:

• $40 million - higher fuel prices

Selling and administrative expenses increased by $14 million, or 8.7%, to $172 million in 2018 from $158 million in 2017.

Depreciation and amortization expenses increased by $3 million, or 1.8%, to $150 million in 2018 from $147 million in 2017.

Operating Income

Our consolidated operating income increased by $401 million, or 29%, to $1.8 billion in 2018 from $1.4 billion in 2017. Our NAA segment’s operating income increased by $235 million, or 25%, to $1.2 billion in 2018 from $0.9 billion in 2017, and our EA segment’s operating income increased by $166 million, or 36%, to $621 million in 2018 from $455 million in 2017. These changes were primarily due to the reasons discussed above.

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Nonoperating Income (Expense)

	Three Months Ended August 31,
(in millions)	2018			2017
Unrealized gains on fuel derivatives, net	$	8		$	65
Realized losses on fuel derivatives, net	(4		)	(57		)
Gains on fuel derivatives, net	$	4		$	7

Explanations of Non-GAAP Financial Measures

Non-GAAP Financial Measures

We use net cruise revenues per ALBD (“net revenue yields”), net cruise costs excluding fuel per ALBD, adjusted net income and adjusted earnings per share as non-GAAP financial measures of our cruise segments’ and the company’s financial performance. These non-GAAP financial measures are provided along with U.S. GAAP gross cruise revenues per ALBD (“gross revenue yields”), gross cruise costs per ALBD and U.S. GAAP net income and U.S. GAAP earnings per share. 

Net revenue yields and net cruise costs excluding fuel per ALBD enable us to separate the impact of predictable capacity or ALBD changes from price and other changes that affect our business. We believe these non-GAAP measures provide useful information to investors and expanded insight to measure our revenue and cost performance as a supplement to our U.S. GAAP consolidated financial statements.

Under U.S. GAAP, the realized and unrealized gains and losses on fuel derivatives not qualifying as fuel hedges are recognized currently in earnings. We believe that unrealized gains and losses on fuel derivatives are not an indication of our earnings performance since they relate to future periods and may not ultimately be realized in our future earnings. Therefore, we believe it is more meaningful for the unrealized gains and losses on fuel derivatives to be excluded from our net income and earnings per share and, accordingly, we present adjusted net income and adjusted earnings per share excluding these unrealized gains and losses.

We believe that gains and losses on ship sales, impairment charges, restructuring and other expenses are not part of our core operating business and are not an indication of our future earnings performance. Therefore, we believe it is more meaningful for gains and losses on ship sales, impairment charges, and restructuring and other non-core gains and charges to be excluded from our net income and earnings per share and, accordingly, we present adjusted net income and adjusted earnings per share excluding these items.

The presentation of our non-GAAP financial information is not intended to be considered in isolation from, as substitute for, or superior to the financial information prepared in accordance with U.S. GAAP. It is possible that our non-GAAP financial measures may not be exactly comparable to the like-kind information presented by other companies, which is a potential risk associated with using these measures to compare us to other companies.

Net revenue yields are commonly used in the cruise industry to measure a company’s cruise segment revenue performance and for revenue management purposes. We use “net cruise revenues” rather than “gross cruise revenues” to calculate net revenue yields. We believe that net cruise revenues is a more meaningful measure in determining revenue yield than gross cruise revenues because it reflects the cruise revenues earned net of our most significant variable costs, which are travel agent commissions, cost of air and other transportation, certain other costs that are directly associated with onboard and other revenues and credit and debit card fees. 

Net passenger ticket revenues reflect gross passenger ticket revenues, net of commissions, transportation and other costs.

Net onboard and other revenues reflect gross onboard and other revenues, net of onboard and other cruise costs.

Net cruise costs excluding fuel per ALBD is the measure we use to monitor our ability to control our cruise segments’ costs rather than gross cruise costs per ALBD. We exclude the same variable costs that are included in the calculation of net cruise revenues as well as fuel expense to calculate net cruise costs without fuel to avoid duplicating these variable costs in our non-GAAP financial measures. Substantially all of our net cruise costs excluding fuel are largely fixed, except for the impact of changing prices, once the number of ALBDs has been determined.

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Reconciliation of Forecasted Data

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

Constant Dollar and Constant Currency

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

We report net revenue yields, net passenger revenue yields, net onboard and other revenue yields and net cruise costs excluding fuel per ALBD on a “constant dollar” and “constant currency” basis assuming the 2018 periods’ currency exchange rates have remained constant with the 2017 periods’ rates. These metrics facilitate a comparative view for the changes in our business in an environment with fluctuating exchange rates.

Constant dollarreporting removes only the impact of changes in exchange rates on the translation of our operations.

Constant currencyreporting removes the impact of changes in exchange rates on the translation of our operations (as in constant dollar) plus the transactional impact of changes in exchange rates from revenues and expenses that are denominated in a currency other than the functional currency.

Examples:

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

• Our operations have revenue and expense transactions in currencies other than their functional currency. If their functional currency strengthens against these other currencies, it reduces the functional currency revenues and expenses. If the functional currency weakens against these other currencies, it increases the functional currency revenues and expenses.

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Consolidated gross and net revenue yields were computed by dividing the gross and net cruise revenues by ALBDs as follows:

	Three Months Ended August 31,
(dollars in millions, except yields)	2018			2018 Constant Dollar			2017
Passenger ticket revenues	$	4,353		$	4,342		$	4,138
Onboard and other revenues	1,316			1,315			1,223
Gross cruise revenues	5,669			5,657			5,361
Less cruise costs
Commissions, transportation and other	(760		)	(758		)	(699		)
Onboard and other	(207		)	(207		)	(184		)
	(967		)	(965		)	(883		)
Net passenger ticket revenues	3,593			3,584			3,439
Net onboard and other revenues	1,109			1,108			1,039
Net cruise revenues	$	4,702		$	4,692		$	4,478
ALBDs	21,475,014			21,475,014			21,120,155
Gross revenue yields	$	263.98		$	263.40		$	253.82
% increase	4.0		%	3.8		%
Net revenue yields	$	218.96		$	218.48		$	211.99
% increase	3.3		%	3.1		%
Net passenger ticket revenue yields	$	167.31		$	166.89		$	162.82
% increase	2.8		%	2.5		%
Net onboard and other revenue yields	$	51.65		$	51.60		$	49.17
% increase	5.0		%	4.9		%

	Three Months Ended August 31,
(dollars in millions, except yields)	2018			2018 Constant Currency			2017
Net passenger ticket revenues	$	3,593		$	3,573		$	3,439
Net onboard and other revenues	1,109			1,110			1,039
Net cruise revenues	$	4,702		$	4,683		$	4,478
ALBDs	21,475,014			21,475,014			21,120,155
Net revenue yields	$	218.96		$	218.06		$	211.99
% increase	3.3		%	2.9		%
Net passenger ticket revenue yields	$	167.31		$	166.38		$	162.82
% increase	2.8		%	2.2		%
Net onboard and other revenue yields	$	51.65		$	51.68		$	49.17
% increase	5.0		%	5.1		%

23

Consolidated gross and net cruise costs and net cruise costs excluding fuel per ALBD were computed by dividing the gross and net cruise costs and net cruise costs excluding fuel by ALBDs as follows:

	Three Months Ended August 31,
(dollars in millions, except costs per ALBD)	2018			2018 Constant Dollar			2017
Cruise operating expenses	$	2,867		$	2,864		$	2,927
Cruise selling and administrative expenses	569			567			543
Gross cruise costs	3,436			3,431			3,470
Less cruise costs included above
Commissions, transportation and other	(760		)	(758		)	(699		)
Onboard and other	(207		)	(207		)	(184		)
Gains (losses) on ship sales and impairments	27			26			(304		)
Restructuring expenses	—			—			(3		)
Other	—			—			—
Net cruise costs	2,496			2,492			2,280
Less fuel	(434		)	(434		)	(307		)
Net cruise costs excluding fuel	$	2,062		$	2,058		$	1,973
ALBDs	21,475,014			21,475,014			21,120,155
Gross cruise costs per ALBD	$	160.02		$	159.76		$	164.32
% (decrease)	(2.6		)%	(2.8		)%
Net cruise costs excluding fuel per ALBD	$	96.03		$	95.85		$	93.39
% increase	2.8		%	2.6		%

	Three Months Ended August 31,
(dollars in millions, except costs per ALBD)	2018			2018 Constant Currency			2017
Net cruise costs excluding fuel	$	2,062		$	2,060		$	1,973
ALBDs	21,475,014			21,475,014			21,120,155
Net cruise costs excluding fuel per ALBD	$	96.03		$	95.92		$	93.39
% increase	2.8		%	2.7		%

24

Adjusted fully diluted earnings per share was computed as follows:

	Three Months Ended
	August 31,
(in millions, except per share data)	2018			2017
Net income
U.S. GAAP net income	$	1,707		$	1,329
Unrealized (gains) losses on fuel derivatives, net	(8		)	(65		)
(Gains) losses on ship sales and impairments	(27		)	392
Restructuring expenses	—			3
Other	—			—
Adjusted net income	$	1,673		$	1,659
Weighted-average shares outstanding	707			726
Earnings per share
U.S. GAAP earnings per share	$	2.41		$	1.83
Unrealized (gains) losses on fuel derivatives, net	(0.01		)	(0.09		)
(Gains) losses on ship sales and impairments	(0.04		)	0.55
Restructuring expenses	—			—
Other	—			—
Adjusted earnings per share	$	2.36		$	2.29

Net cruise revenues increased by $225 million, or 5.0%, to $4.7 billion in 2018 from $4.5 billion in 2017.

The increase was driven by:

• $130 million - 2.9% increase in constant currency net revenue yields

• $75 million - 1.7% capacity increase in ALBDs

• $19 million - foreign currency impacts (including both the foreign currency translational and transactional impacts)

The 2.9% increase in net revenue yields on a constant currency basis was due to a 2.2% increase in net passenger ticket revenue yields and a 5.1% increase in net onboard and other revenue yields.

The 2.2% increase in net passenger ticket revenue yields was driven primarily by price improvements in our European and China programs, partially offset by decrease in our Caribbean program. This 2.2% increase in net passenger ticket revenue yields was comprised of a 1.1% increase from our NAA segment and a 4.3% increase from our EA segment.

The 5.1% increase in net onboard and other revenue yields was caused by similar increases in our NAA and EA segments.

Net cruise costs excluding fuel increased by $90 million, or 4.5%, to $2.1 billion in 2018 from $2.0 billion in 2017.

The increase was driven by:

• $54 million - 2.7% increase in constant currency net cruise costs excluding fuel

• $33 million - 1.7% capacity increase in ALBDs

Fuel costs increased by $127 million, or 41%, to $434 million in 2018 from $307 million in 2017. This increase was caused by higher fuel prices, which accounted for $128 million.

Nine Months Ended August 31, 2018 (“2018”) Compared to Nine Months Ended August 31, 2017 (“2017”)

Revenues

Consolidated

Cruise passenger ticket revenues made up 74% of our 2018 total revenues. Cruise passenger ticket revenues increased by $880 million, or 9.0%, to $10.7 billion in 2018 from $9.8 billion in 2017.

This increase was caused by:

• $281 million - foreign currency translational impact

• $217 million - increase in cruise ticket revenues, driven primarily by price improvements in our European, China and various other programs including World Cruises

• $173 million - 1.8% capacity increase in ALBDs

25

• $94 million - increase in occupancy

• $80 million - increase in air transportation revenues

• $35 million - increase in other passenger revenues

The remaining 26% of 2018 total revenues were substantially all comprised of onboard and other cruise revenues, which increased by $272 million, or 8.4%, to $3.5 billion in 2018 from $3.2 billion in 2017.

This increase was caused by:

• $92 million - higher onboard spending by our guests

• $62 million - foreign currency translational impact

• $57 million - 1.8% capacity increase in ALBDs

• $31 million - increase in occupancy

• $30 million - increase in other revenues

Concession revenues, which are included in onboard and other revenues, increased by $65 million, or 8.1%, to $868 million in 2018 from $802 million in 2017.

NAA Segment

Cruise passenger ticket revenues made up 73% of our NAA segment’s 2018 total revenues. Cruise passenger ticket revenues increased by $414 million, or 6.5%, to $6.8 billion in 2018 from $6.4 billion in 2017. 

This increase was driven by:

• $201 million - increase in cruise ticket revenues, driven primarily by price improvements in the European program

• $142 million - 2.2% capacity increase in ALBDs

• $48 million - increase in air transportation revenues

The remaining 27% of our NAA segment’s 2018 total revenues were comprised of onboard and other cruise revenues, which increased by $166 million, or 7.0%, to $2.6 billion in 2018 from $2.4 billion in 2017.

The increase was driven by:

• $81 million - higher onboard spending by our guest

• $53 million - 2.2% capacity increase in ALBDs

• $29 million - increase in other revenues

Concession revenues, which are included in onboard and other revenues, increased by $37 million, or 6.5%, to $615 million in 2018 from $578 million in 2017. 

EA Segment

Cruise passenger ticket revenues made up 83% of our EA segment’s 2018 total revenues. Cruise passenger ticket revenues increased by $485 million, or 14%, to $4.0 billion in 2018 from $3.5 billion in 2017. 

This increase was driven by:

• $279 million - foreign currency translational impact

• $85 million - increase in occupancy

• $55 million - increase in cruise ticket revenues, driven primarily by price improvements in the European, China and various other programs including World Cruises

• $33 million - 1.0% capacity increase in ALBDs

• $30 million - increase in air transportation revenues

The remaining 17% of our EA segment’s 2018 total revenues were comprised of onboard and other cruise revenues, which increased by $94 million, or 13%, to $832 million in 2018 from $738 million in 2017. This increase was driven by foreign currency translational impact, which accounted for $61 million.

Concession revenues, which are included in onboard and other revenues, increased by $28 million, or 12%, to $252 million in 2018 from $225 million in 2017.

26

Costs and Expenses

Consolidated

Operating costs and expenses increased by $464 million, or 5.9%, to $8.3 billion in 2018 from $7.9 billion in 2017.

This increase was caused by:

• $253 million - higher fuel prices

• $194 million - foreign currency translational impact

• $137 million - 1.8% capacity increase in ALBD

• $101 million - higher commissions, transportation and other expenses

• $55 million - higher dry-dock expenses and repairs and maintenance expenses

• $29 million - increase in occupancy

These increases were partially offset by:

• $304 million - ship impairments in 2017

• $51 million - gains on ship sales in 2018

Selling and administrative expenses increased by $145 million, or 8.8%, to $1.8 billion in 2018 from $1.6 billion in 2017.

Depreciation and amortization expenses increased by $142 million, or 10%, to $1.5 billion in 2018 from $1.4 billion in 2017.

This increase was caused by:

• $81 million - fleet enhancements and investments in shoreside assets

• $37 million - foreign currency translational impact

• $24 million - 1.8% capacity increase in ALBD

Goodwill and trademark impairment charges of $89 million include a goodwill impairment charge of $38 million and a trademark impairment charge of $50 million during 2017.

NAA Segment

Operating costs and expenses increased by $312 million, or 6.2%, to $5.4 billion in 2018 from $5.1 billion in 2017.

This increase was caused by:

• $172 million - higher fuel prices

• $113 million - 2.2% capacity increase in ALBDs

• $78 million - higher commissions, transportation and other expenses

• $40 million - higher dry-dock expenses and repairs and maintenance expenses

• $30 million - higher port expenses

• $28 million - higher cruise payroll and related expenses

These increases were partially offset by impairment of ships of $162 million recorded in 2017.

Selling and administrative expenses increased by $57 million, or 5.8%, to $1.0 billion in 2018 from $1.0 billion in 2017.

Depreciation and amortization expenses increased by $47 million, or 5.3%, to $940 million in 2018 from $893 million in 2017.

Goodwill and trademark impairment charges of $89 million include a goodwill impairment charge of $38 million and a trademark impairment charge of $50 million during 2017.

EA Segment

Operating costs and expenses increased by $122 million, or 4.6%, to $2.8 billion in 2018 from $2.7 billion in 2017.

This increase was caused by:

• $193 million - foreign currency translational impact

• $81 million - higher fuel prices

• $32 million - higher commissions, transportation and other expenses

27

• $26 million - increase in occupancy

• $25 million - 1.0% capacity increase in ALBDs

These increases were partially offset by:

• $141 million - ship impairments in 2017

• $39 million - gains on ship sales in 2018

Selling and administrative expenses increased by $76 million, or 16% to $551 million in 2018 from $475 million in 2017. This increase was driven by foreign currency translational impact, which accounted for $44 million.

Depreciation and amortization expenses increased by $55 million, or 13%, to $466 million in 2018 from $411 million in 2017. This increase was driven by foreign currency translational impact, which accounted for $36 million.

Operating Income

Our consolidated operating income increased by $511 million, or 23%, to $2.8 billion in 2018 from $2.3 billion in 2017. Our NAA segment’s operating income increased by $253 million, or 15%, to $2.0 billion in 2018 from $1.7 billion in 2017, and our EA segment’s operating income increased by $326 million, or 49%, to $984 million in 2018 from $658 million in 2017. These changes were primarily due to the reasons discussed above.

Nonoperating Income (Expense)

	Nine Months Ended August 31,
(in millions)	2018			2017
Unrealized gains on fuel derivatives, net	$	90		$	134
Realized (losses) on fuel derivatives, net	(29		)	(153		)
Gains (losses) on fuel derivatives, net	$	61		$	(19	)

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Key Performance Non-GAAP Financial Indicators

Consolidated gross and net revenue yields were computed by dividing the gross and net cruise revenues by ALBDs as follows:

	Nine Months Ended August 31,
(dollars in millions, except yields)	2018			2018 Constant Dollar			2017
Passenger ticket revenues	$	10,694		$	10,413		$	9,814
Onboard and other revenues	3,509			3,447			3,237
Gross cruise revenues	14,203			13,860			13,051
Less cruise costs
Commissions, transportation and other	(2,000		)	(1,930		)	(1,781		)
Onboard and other	(485		)	(476		)	(438		)
	(2,485		)	(2,406		)	(2,219		)
Net passenger ticket revenues	8,694			8,483			8,033
Net onboard and other revenues	3,024			2,971			2,799
Net cruise revenues	$	11,718		$	11,454		$	10,832
ALBDs	62,626,499			62,626,499			61,540,974
Gross revenue yields	$	226.78		$	221.31		$	212.07
% increase	6.9		%	4.4		%
Net revenue yields	$	187.10		$	182.90		$	176.01
% increase	6.3		%	3.9		%
Net passenger ticket revenue yields	$	138.82		$	135.45		$	130.52
% increase	6.4		%	3.8		%
Net onboard and other revenue yields	$	48.28		$	47.45		$	45.49
% increase	6.1		%	4.3		%

	Nine Months Ended August 31,
(dollars in millions, except yields)	2018			2018 Constant Currency			2017
Net passenger ticket revenues	$	8,694		$	8,455		$	8,033
Net onboard and other revenues	3,024			2,980			2,799
Net cruise revenues	$	11,718		$	11,436		$	10,832
ALBDs	62,626,499			62,626,499			61,540,974
Net revenue yields	$	187.10		$	182.60		$	176.01
% increase	6.3		%	3.7		%
Net passenger ticket revenue yields	$	138.82		$	135.01		$	130.52
% increase	6.4		%	3.4		%
Net onboard and other revenue yields	$	48.28		$	47.59		$	45.49
% increase	6.1		%	4.6		%

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Consolidated gross and net cruise costs and net cruise costs excluding fuel per ALBD were computed by dividing the gross and net cruise costs and net cruise costs excluding fuel by ALBDs as follows:

	Nine Months Ended August 31,
(dollars in millions, except costs per ALBD)	2018			2018 Constant Dollar			2017
Cruise operating expenses	$	8,208		$	8,014		$	7,752
Cruise selling and administrative expenses	1,772			1,728			1,637
Gross cruise costs	9,980			9,743			9,389
Less cruise costs included above
Commissions, transportation and other	(2,000		)	(1,930		)	(1,781		)
Onboard and other	(485		)	(476		)	(438		)
Gains (losses) on ship sales and impairments	39			35			(300		)
Restructuring expenses	—			—			(3		)
Other	(1		)	(1		)	—
Net cruise costs	7,532			7,370			6,867
Less fuel	(1,166		)	(1,166		)	(914		)
Net cruise costs excluding fuel	$	6,367		$	6,204		$	5,953
ALBDs	62,626,499			62,626,499			61,540,974
Gross cruise costs per ALBD	$	159.36		$	155.57		$	152.56
% increase	4.5		%	2.0		%
Net cruise costs excluding fuel per ALBD	$	101.66		$	99.07		$	96.72
% increase	5.1		%	2.4		%

	Nine Months Ended August 31,
(dollars in millions, except costs per ALBD)	2018			2018 Constant Currency			2017
Net cruise costs excluding fuel	$	6,367		$	6,205		$	5,953
ALBDs	62,626,499			62,626,499			61,540,974
Net cruise costs excluding fuel per ALBD	$	101.66		$	99.07		$	96.72
% increase	5.1		%	2.4		%

30

Adjusted fully diluted earnings per share was computed as follows:

	Nine Months Ended
	August 31,
(in millions, except per share data)	2018			2017
Net income
U.S. GAAP net income	$	2,659		$	2,060
Unrealized (gains) losses on fuel derivatives, net	(90		)	(134		)
(Gains) losses on ship sales and impairments	(39		)	389
Restructuring expenses	—			3
Other	7			—
Adjusted net income	$	2,537		$	2,318
Weighted-average shares outstanding	714			727
Earnings per share
U.S. GAAP earnings per share	$	3.72		$	2.84
Unrealized (gains) losses on fuel derivatives, net	(0.13		)	(0.18		)
(Gains) losses on ship sales and impairments	(0.05		)	0.53
Restructuring expenses	—			—
Other	0.01			—
Adjusted earnings per share	$	3.55		$	3.19

Net cruise revenues increased by $886 million, or 8.2%, to $11.7 billion in 2018 from $10.8 billion in 2017.

The increase was caused by:

• $413 million - 3.7% increase in constant currency net revenue yields

• $282 million - foreign currency impacts (including both the foreign currency translational and transactional impacts)

• $191 million - 1.8% capacity increase in ALBDs

The 3.7% increase in net revenue yields on a constant currency basis was due to a 3.4% increase in net passenger ticket revenue yields and a 4.6% increase in net onboard and other revenue yields.

The 3.4% increase in net passenger ticket revenue yields was driven primarily by price improvements in our European, China and various other programs including World Cruises. This 3.4% increase in net passenger ticket revenue yields was comprised of a 2.5% increase from our NAA segment and a 5.5% increase from our EA segment.

The 4.6% increase in net onboard and other revenue yields was caused by similar increases in our NAA and EA segments.

Net cruise costs excluding fuel increased by $414 million, or 6.9%, to $6.4 billion in 2018 from $6.0 billion in 2017.

The increase was caused by:

• $162 million - foreign currency impacts (including both the foreign currency translational and transactional impacts)

• $147 million - 2.4% increase in constant currency net cruise costs excluding fuel

• $105 million - 1.8% capacity increase in ALBDs

Fuel costs increased by $252 million, or 28%, to $1.2 billion in 2018 from $0.9 billion in 2017. This increase was caused by higher fuel prices, which accounted for $254 million.

31

Liquidity, Financial Condition and Capital Resources

Our primary financial goals are to profitably grow our cruise business and increase our return on invested capital (“ROIC”), reaching double-digit returns, while maintaining a strong balance sheet and strong investment grade credit ratings. We define ROIC as the twelve month adjusted earnings before interest divided by the monthly average of debt plus equity minus construction-in-progress. Our ability to generate significant operating cash flow allows us to internally fund our capital investments. We are committed to returning cash to our shareholders in the form of dividends and/or share repurchases. As we continue to profitably grow our cruise business, we plan to increase our debt level in a manner consistent with maintaining our strong credit metrics. This will allow us to return cash to our shareholders in the form of dividends and/or share repurchases. Other objectives of our capital structure policy are to maintain a sufficient level of liquidity with our available cash and cash equivalents and committed financings for immediate and future liquidity needs, and a reasonable debt maturity profile.

Based on our historical results, projections and financial condition, we believe that our future operating cash flows and liquidity will be sufficient to fund all of our expected capital projects including shipbuilding commitments, ship improvements, debt service requirements, working capital needs and other firm commitments over the next several years. We believe that our ability to generate significant operating cash flows and our strong balance sheet, as evidenced by our investment grade credit ratings, provide us with the ability, in most financial credit market environments, to obtain debt financing.

We had a working capital deficit of $6.3 billion as of August 31, 2018 compared to a working capital deficit of $7.2 billion as of November 30, 2017. 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 remain a current liability until the sailing date. The cash generated from these advance receipts is used interchangeably with cash on hand from other sources, such as our borrowings and other cash from operations. The cash received as advanced receipts can be used to fund operating expenses, pay down our debt, invest in long term investments or any other use of cash. Included within our working capital deficit are $4.4 billion and $4.0 billion of customer deposits as of August 31, 2018 and November 30, 2017, respectively. In addition, we have a relatively low-level of accounts receivable and limited investment in inventories. We generate substantial cash flows from operations and our business model has historically allowed us to maintain this working capital deficit and still meet our operating, investing and financing needs. We expect that we will continue to have working capital deficits in the future.

Sources and Uses of Cash

Operating Activities

Our business provided $4.4 billion of net cash from operations during the nine months ended August 31, 2018, an increase of $138 million, or 3.2%, compared to $4.3 billion for the same period in 2017. This increase was caused by an increase in our revenues less expenses settled in cash and an increase in customer deposits.

Investing Activities

During the nine months ended August 31, 2018, net cash used in investing activities was $2.6 billion. This was substantially due to the following:

• Capital expenditures of $1.4 billion for our ongoing new shipbuilding program

• Capital expenditures of $1.3 billion for ship improvements and replacements, information technology and buildings and improvements

• Proceeds from sales of ships of $282 million

• Payments of $37 million for fuel derivative settlements

During the nine months ended August 31, 2017, net cash used in investing activities was $2.4 billion. This was caused by:

• Capital expenditures of $1.2 billion for our ongoing new shipbuilding program

• Capital expenditures of $1.1 billion for ship improvements and replacements, information technology and buildings and improvements

• Payments of $157 million for fuel derivative settlements

32

Financing Activities

During the nine months ended August 31, 2018, net cash used in financing activities of $1.7 billion was substantially due to the following:

• Net proceeds of short-term borrowings of $182 million in connection with our availability of, and needs for, cash at various times throughout the period

• Repayments of $1.3 billion of long-term debt

• Issuances of $1.6 billion of long-term debt

• Payments of cash dividends of $1.0 billion

• Purchases of $1.2 billion of Carnival Corporation common stock and Carnival plc ordinary shares in open market transactions under our Repurchase Program

During the nine months ended August 31, 2017, net cash used in financing activities of $2.0 billion was substantially due to the following:

• Net repayments of short-term borrowings of $335 million in connection with our availability of, and needs for, cash at various times throughout the period

• Repayments of $1.0 billion of long-term debt

• Issuances of $100 million of long-term debt under a term loan

• Proceeds of $367 million of long-term debt under an export credit facility

• Payments of cash dividends of $797 million

• Purchases of $305 million of Carnival Corporation common stock and Carnival plc ordinary shares in open market transactions under our Repurchase Program

Future Commitments and Funding Sources

Our total annual capital expenditures consist of ships under contract for construction and estimated improvements to existing ships and shoreside assets for 2018 through 2022 are currently expected to be:

(in billions)	2018		2019		2020		2021		2022
Total annual capital expenditures	$	4.6	$	5.6	$	5.6	$	5.5	$	4.8

For years 2023 through 2025 we have committed $3.3 billion for ships under contract for construction.

The year-over-year percentage increases in our annual capacity are expected to result primarily from contracted new ships entering service and are currently expected to be:

	2018		2019		2020		2021		2022
Annual capacity increase (a)	2.0	%	4.7	%	6.2	%	8.0	%	5.0	%

(a)     These percentage increases include only contracted ship orders and dispositions.

At August 31, 2018, we had liquidity of $14.5 billion. Our liquidity consisted of $245 million of cash and cash equivalents, which excludes $281 million of cash used for current operations, $2.6 billion available for borrowing under our revolving credit facilities, net of our outstanding commercial paper borrowings, and $11.7 billion under our committed future financings, which are comprised of ship export credit facilities. These commitments are from numerous large and well-established banks and export credit agencies, which we believe will honor their contractual agreements with us. 

(in billions)	2018		2019		2020		2021		2022
Availability of committed future financing at August 31, 2018	$	1.3	$	2.6	$	3.0	$	2.9	$	1.8

At August 31, 2018, all of our revolving credit facilities are scheduled to mature in 2021, except for $300 million that matures in 2020.

Substantially all of our debt agreements contain financial covenants as described in Note 5 - “Unsecured Debt” in the annual consolidated financial statements, which are included within our Form 10-K. At August 31, 2018, we were in compliance with our debt covenants. In addition, based on, among other things, our forecasted operating results, financial condition and cash flows, we expect to be in compliance with our debt covenants for the foreseeable future. Generally, if an event of default under any debt

33

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.

Off-Balance Sheet Arrangements

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

For a discussion of our hedging strategies and market risks, see the discussion below and Note 4 - “Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks” in our consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations within our Form 10-K. 

Operational Currency Risks

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

Based on a 10% change in all currency exchange rates that were used in our September 27, 2018 guidance, we estimate a less than $0.01 change to our adjusted diluted earnings per share guidance for the fourth quarter.

Interest Rate Risks

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

	August 31, 2018
Fixed rate	28	%
EUR fixed rate	31	%
Floating rate	6	%
EUR floating rate	26	%
GBP floating rate	9	%

Fuel Price Risks

Based on a 10% change in fuel prices versus the current spot price that was used to calculate fuel expense in our September 27, 2018 guidance, we estimate that our adjusted diluted earnings per share guidance would change by the following:

• $0.06 per share for the fourth quarter of 2018

Item 4. Controls and Procedures.

A. Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported, within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in our reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

Our 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 August 31, 2018, that they are effective at a reasonable level of assurance, as described above.

34

B. Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended August 31, 2018 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

On August 28, 2018, P&O Cruises Australia notified the Maritime Accident Investigation Branch and the Australian Maritime Safety Authority of an inadvertent discharge of liquid food waste mixed into grey water off of Pacific Explorer, while it was inside the Great Barrier Reef Marine Park on August 26, 2018. We believe the ultimate outcome of any investigation and penalty will not have a material impact on our consolidated financial statements.

On August 24, 2018, a proposed class-action lawsuit was filed by James Wolfe and others against Carnival Corporation in the United States District Court for the Southern District of Florida relating to the marketing and sales of our Carnival Vacation Protection product. The plaintiffs purport to represent an alleged class of passengers who purchased the Carnival Vacation Protection product. The complaint alleges that Carnival Cruise Line concealed that it received “kickbacks” on the sale of the travel insurance portion of the product from an underwriter. We believe we have meritorious defenses to the claim and that any liability which may arise as a result of this action will not have a material impact on our consolidated financial statements.

Item 1A. Risk Factors.

The risk factors that affect our business and financial results are discussed in “Item 1A. Risk Factors,” included in the Form 10-K, and there has been no material change to these risk factors since the Form 10-K filing. We wish to caution the reader that the risk factors discussed in “Item 1A. Risk Factors,” included in the Form 10-K, and those described elsewhere in this report or other Securities and Exchange Commission filings, could cause future results to differ materially from those stated in any forward-looking statements. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

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

A. Repurchase Program

Under a share repurchase program effective 2004, we are authorized to repurchase Carnival Corporation common stock and Carnival plc ordinary shares (the “Repurchase Program”). Effective August 27, 2018, the company approved a modification of the general authorization under the Repurchase Program, which replenished the remaining authorized repurchases at the time of the approval to $1.0 billion. The Repurchase Program does not have an expiration date and may be discontinued by our Boards of Directors at any time.

35

During the three months ended August 31, 2018, repurchases of Carnival Corporation common stock pursuant to the Repurchase Program were as follows:

Period	Total Number of Shares of Carnival Corporation Common Stock Purchased (in millions)	Average Price Paid per Share of Carnival Corporation Common Stock		Maximum Dollar Value of Shares That May Yet Be Purchased Under the Repurchase Program (in millions)
June 1, 2018 through June 30, 2018	1.7	$	60.17	$	668
July 1, 2018 through July 31, 2018	2.5	$	57.70	$	329
August 1, 2018 through August 31, 2018	0.5	$	58.70	$	987
Total	4.7	$	58.68

During the three months ended August 31, 2018, repurchases of Carnival plc ordinary shares pursuant to the Repurchase Program were as follows:

Period	Total Number of Shares of Carnival plc Purchased (in millions)	Average Price Paid per Share of Carnival plc		Maximum Dollar Value of Shares That May Yet Be Purchased Under the Repurchase Program (in millions)
June 1, 2018 through June 30, 2018	1.0	$	59.69	$	668
July 1, 2018 through July 31, 2018	3.4	$	57.09	$	329
August 1, 2018 through August 31, 2018	2.8	$	58.51	$	987
Total	7.1	$	57.99

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

B. Stock Swap Programs

In addition to the Repurchase Program, we have programs that allow us to obtain an economic benefit when either Carnival Corporation common stock is trading at a premium to the price of Carnival plc ordinary shares or Carnival plc ordinary shares are trading at a premium to Carnival Corporation common stock (the “Stock Swap Programs”). For example:

• In the event Carnival Corporation common stock trades at a premium to Carnival plc ordinary shares, we may elect to sell shares of Carnival Corporation common stock, at prevailing market prices in ordinary brokers’ transactions and repurchase an equivalent number of Carnival plc ordinary shares in the UK market.

• In the event Carnival plc ordinary shares trade at a premium to Carnival Corporation common stock, we may elect to sell ordinary shares of Carnival plc, at prevailing market prices in ordinary brokers’ transactions and repurchase an equivalent number of shares of Carnival Corporation common stock in the U.S. market.

Under the Stock Swap Programs effective 2008, the Boards of Directors have made the following authorizations:

• In January 2017, to sell up to 22.0 million shares of Carnival Corporation common stock in the U.S. market and repurchase up to 22.0 million of Carnival plc ordinary shares in the UK market.

• In 2016, to sell up to 26.9 million of existing shares of Carnival plc in the UK market and repurchase up to 26.9 million shares of Carnival Corporation common stock in the U.S. market.

Any sales of Carnival Corporation shares and Carnival plc ordinary shares have been or will be registered under the Securities Act of 1933. During the three months ended August 31, 2018, no Carnival Corporation common stock or Carnival plc ordinary shares were sold or repurchased under the Stock Swap Programs.

36

C. Carnival plc Shareholder Approvals

Carnival plc ordinary share repurchases under both the Repurchase Program and the Stock Swap Programs require annual shareholder approval. The existing shareholder approval is limited to a maximum of 20.9 million ordinary shares and is valid until the earlier of the conclusion of the Carnival plc 2019 annual general meeting or July 10, 2019.

37

Item 6. Exhibits.

INDEX TO EXHIBITS
		Incorporated by Reference			Filed/ Furnished Herewith
Exhibit Number	Exhibit Description	Form	Exhibit	Filing Date
Articles of incorporation and by-laws
3.1	Third Amended and Restated Articles of Incorporation of Carnival Corporation	8-K	3.1	4/17/2003
3.2	Third Amended and Restated By-Laws of Carnival Corporation	8-K	3.1	4/20/2009
3.3	Articles of Association of Carnival plc	8-K	3.3	4/20/2009
Statement regarding computations of ratios
12	Ratio of Earnings to Fixed Charges				X
Rule 13a-14(a)/15d-14(a) certifications
31.1	Certification of President and Chief Executive Officer of Carnival Corporation pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X
31.2	Certification of Chief Financial Officer and Chief Accounting Officer of Carnival Corporation pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X
31.3	Certification of President and Chief Executive Officer of Carnival plc pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X
31.4	Certification of Chief Financial Officer and Chief Accounting Officer of Carnival plc pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X
Section 1350 certifications
32.1*	Certification of President and Chief Executive Officer of Carnival Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				X
32.2*	Certification of Chief Financial Officer and Chief Accounting Officer of Carnival Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				X
32.3*	Certification of President and Chief Executive Officer of Carnival plc pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				X
32.4*	Certification of Chief Financial Officer and Chief Accounting Officer of Carnival plc pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				X

38

INDEX TO EXHIBITS
		Incorporated by Reference			Filed/ Furnished Herewith
Exhibit Number	Exhibit Description	Form	Exhibit	Filing Date
Interactive Data File
101	The consolidated financial statements from Carnival Corporation & plc’s joint Quarterly Report on Form 10-Q for the quarter ended August 31, 2018, as filed with the Securities and Exchange Commission on September 27, 2018, formatted in XBRL, are as follows:
	(i) the Consolidated Statements of Income for the three and nine months ended August 31, 2018 and 2017;				X
	(ii) the Consolidated Statements of Comprehensive Income for the three and nine months ended August 31, 2018 and 2017;				X
	(iii) the Consolidated Balance Sheets at August 31, 2018 and November 30, 2017;				X
	(iv) the Consolidated Statements of Cash Flows for the three and nine months ended August 31, 2018 and 2017 and				X
	(v) the notes to the consolidated financial statements, tagged in summary and detail.				X

* These items are furnished and not filed.

39

SIGNATURES

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

	CARNIVAL CORPORATION		CARNIVAL PLC
By:	/s/ Arnold W. Donald	By:	/s/ Arnold W. Donald
	Arnold W. Donald		Arnold W. Donald
	President and Chief Executive Officer		President and Chief Executive Officer
By:	/s/ David Bernstein	By:	/s/ David Bernstein
	David Bernstein		David Bernstein
	Chief Financial Officer and Chief Accounting Officer		Chief Financial Officer and Chief Accounting Officer
	Date: September 27, 2018		Date: September 27, 2018

40

EX-12

Exhibit 12

CARNIVAL CORPORATION & PLC

Ratio of Earnings to Fixed Charges

	Nine Months Ended
	August 31,
(in millions, except ratios)	2018			2017
Net income	$	2,659		$	2,060
Income tax expense, net	40			46
Income before income taxes	2,699			2,106
Fixed charges
Interest expense, net of capitalized interest	147			150
Interest portion of rent expense (a)	17			17
Capitalized interest	26			20
Total fixed charges	190			187
Fixed charges not affecting earnings
Capitalized interest	(26		)	(20		)
Earnings before fixed charges	$	2,862		$	2,273
Ratio of earnings to fixed charges	15.1			12.2

(a) Represents one-third of rent expense, which we believe to be representative of the interest portion of rent expense.

EX-31.1

Exhibit 31.1

I, Arnold W. Donald, certify that:

1. I have reviewed this quarterly report on Form 10-Q 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: September 27, 2018

By:/s/ Arnold W. Donald

Arnold W. Donald

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

I, David Bernstein, certify that:

1. I have reviewed this quarterly report on Form 10-Q 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: September 27, 2018

By:/s/ David Bernstein

David Bernstein

Chief Financial Officer and Chief Accounting Officer

EX-31.3

Exhibit 31.3

I, Arnold W. Donald, certify that:

1. I have reviewed this quarterly report on Form 10-Q 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: September 27, 2018

By:/s/ Arnold W. Donald

Arnold W. Donald

President and Chief Executive Officer

EX-31.4

Exhibit 31.4

I, David Bernstein, certify that:

1. I have reviewed this quarterly report on Form 10-Q 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: September 27, 2018

By:/s/ David Bernstein

David Bernstein

Chief Financial Officer and Chief Accounting Officer

EX-32.1

Exhibit 32.1

In connection with the Quarterly Report on Form 10-Q for the quarter ended August 31, 2018 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: September 27, 2018

By:/s/ Arnold W. Donald

Arnold W. Donald

President and Chief Executive Officer

EX-32.2

Exhibit 32.2

In connection with the Quarterly Report on Form 10-Q for the quarter ended August 31, 2018 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: September 27, 2018

By:/s/ David Bernstein

David Bernstein

Chief Financial Officer and Chief Accounting Officer

EX-32.3

Exhibit 32.3

In connection with the Quarterly Report on Form 10-Q for the quarter ended August 31, 2018 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: September 27, 2018

By:/s/ Arnold W. Donald

Arnold W. Donald

President and Chief Executive Officer

EX-32.4

Exhibit 32.4

In connection with the Quarterly Report on Form 10-Q for the quarter ended August 31, 2018 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: September 27, 2018

By:/s/ David Bernstein

David Bernstein

Chief Financial Officer and Chief Accounting Officer

XML

Document and Entity Information - shares	9 Months Ended
	Aug. 31, 2018	Sep. 20, 2018
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Aug. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--11-30
Entity Filer Category	Large Accelerated Filer
Entity Registrant Name	CARNIVAL CORP
Entity Central Index Key	0000815097
Entity Common Stock, Shares Outstanding		526,850,769
CARNIVAL PLC
Entity Registrant Name	CARNIVAL PLC
Entity Central Index Key	0001125259
Entity Common Stock, Shares Outstanding		198,323,911

XML

Consolidated Statements of Income (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2018	Aug. 31, 2017
Revenues
Revenues	$ 5,836	$ 5,515	$ 14,425	$ 13,251
Cruise
Selling and administrative	573	547	1,794	1,649
Depreciation and amortization	511	473	1,510	1,368
Goodwill and trademark impairment	0	89	0	89
Operating Costs and Expenses	4,042	4,122	11,653	10,990
Operating Income	1,794	1,393	2,772	2,261
Nonoperating Income (Expense)
Interest income	5	3	10	7
Interest expense, net of capitalized interest	(49)	(49)	(147)	(150)
Gains (losses) on fuel derivatives, net	4	7	61	(19)
Other (expense) income, net	(9)	14	2	7
Nonoperating Income (Expense)	(50)	(25)	(74)	(155)
Income Before Income Taxes	1,744	1,368	2,699	2,106
Income Tax Expense, Net	(37)	(39)	(40)	(46)
Net Income	$ 1,707	$ 1,329	$ 2,659	$ 2,060
Earnings Per Share
Earnings per share, basic (in dollars per share)	$ 2.42	$ 1.84	$ 3.73	$ 2.85
Earnings per share, diluted (in dollars per share)	2.41	1.83	3.72	2.84
Dividends declared per share (in dollars per share)	$ 0.5	$ 0.4	$ 1.45	$ 1.15
Cruise and tour
Cruise
Operating Costs and Expenses	$ 2,958	$ 3,013	$ 8,348	$ 7,884
Cruise
Cruise
Commissions, transportation and other	760	699	2,000	1,781
Onboard and other	207	184	485	438
Payroll and related	537	520	1,638	1,552
Fuel	434	307	1,166	914
Food	275	270	804	774
Other ship operating	655	947	2,115	2,293
Cruise passenger ticket
Revenues
Revenues	4,353	4,138	10,694	9,814
Cruise onboard and other
Revenues
Revenues	1,316	1,223	3,509	3,237
Tour and other
Revenues
Revenues	167	154	222	200
Cruise
Operating Costs and Expenses	$ 90	$ 86	$ 140	$ 132

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2018	Aug. 31, 2017
Statement of Comprehensive Income [Abstract]
Net Income	$ 1,707	$ 1,329	$ 2,659	$ 2,060
Items Included in Other Comprehensive Income (Loss)
Change in foreign currency translation adjustment	15	285	(50)	543
Other	0	24	(9)	66
Other Comprehensive Income (Loss)	14	309	(59)	609
Total Comprehensive Income	$ 1,722	$ 1,638	$ 2,600	$ 2,669

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions	Aug. 31, 2018	Nov. 30, 2017
Current Assets
Cash and cash equivalents	$ 526	$ 395
Trade and other receivables, net	366	312
Inventories	405	387
Prepaid expenses and other	458	502
Total current assets	1,755	1,596
Property and Equipment, Net	35,178	34,430
Goodwill	2,949	2,967
Other Intangibles	1,182	1,200
Other Assets	689	585
Total assets	41,753	40,778
Current Liabilities
Short-term borrowings	632	485
Current portion of long-term debt	688	1,717
Accounts payable	666	762
Accrued liabilities and other	1,616	1,877
Customer deposits	4,418	3,958
Total current liabilities	8,020	8,800
Long-Term Debt	8,297	6,993
Other Long-Term Liabilities	783	769
Contingencies
Shareholders’ Equity
Additional paid-in capital	8,741	8,690
Retained earnings	24,921	23,292
Accumulated other comprehensive loss	(1,840)	(1,782)
Treasury stock, 129 shares at 2018 and 122 shares at 2017 of Carnival Corporation and 44 shares at 2018 and 32 shares at 2017 of Carnival plc, at cost	(7,533)	(6,349)
Total shareholders’ equity	24,654	24,216
Total liabilities and shareholders' equity	41,753	40,778
Common Stock
Shareholders’ Equity
Common stock	7	7
Ordinary Shares
Shareholders’ Equity
Common stock	$ 358	$ 358

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares shares in Millions	Aug. 31, 2018	Nov. 30, 2017
Common Stock
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	1,960	1,960
Common stock, shares issued (in shares)	656	655
Treasury stock, shares (in shares)	129	122
CARNIVAL PLC | Ordinary Shares
Common stock, par value (in dollars per share)	$ 1.66	$ 1.66
Common stock, shares issued (in shares)	217	217
Treasury stock, shares (in shares)	44	32

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	9 Months Ended
	Aug. 31, 2018	Aug. 31, 2017
OPERATING ACTIVITIES
Net income	$ 2,659	$ 2,060
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	1,510	1,368
Impairments	16	392
(Gains) losses on fuel derivatives, net	(61)	19
Share-based compensation	49	48
Other, net	(22)	52
Adjustments to reconcile net income to net cash provided by operating activities	4,151	3,939
Changes in operating assets and liabilities
Receivables	(61)	(1)
Inventories	(19)	(18)
Prepaid expenses and other	76	(1)
Accounts payable	(94)	(101)
Accrued liabilities and other	(166)	25
Customer deposits	549	455
Net cash provided by operating activities	4,436	4,298
INVESTING ACTIVITIES
Purchases of property and equipment	(2,784)	(2,296)
Proceeds from sales of ships	282	0
Payments of fuel derivative settlements	(37)	(157)
Other, net	(67)	34
Net cash used in investing activities	(2,606)	(2,419)
FINANCING ACTIVITIES
Proceeds from (repayments of) short-term borrowings, net	182	(335)
Principal repayments of long-term debt	(1,271)	(1,012)
Proceeds from issuance of long-term debt	1,618	467
Dividends paid	(1,003)	(797)
Purchases of treasury stock	(1,205)	(305)
Other, net	(28)	(22)
Net cash used in financing activities	(1,707)	(2,004)
Effect of exchange rate changes on cash and cash equivalents	7	11
Net increase (decrease) in cash and cash equivalents	131	(114)
Cash and cash equivalents at beginning of period	395	603
Cash and cash equivalents at end of period	$ 526	$ 489

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General

9 Months Ended

Aug. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

General

General

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

Basis of Presentation

The Consolidated Statements of Income and the Consolidated Statements of Comprehensive Income for the three and nine months ended August 31, 2018 and 2017, the Consolidated Balance Sheet at August 31, 2018 and the Consolidated Statements of Cash Flows for the nine months ended August 31, 2018 and 2017 are unaudited and, in the opinion of our management, contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement. Our interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in the Carnival Corporation & plc 2017 joint Annual Report on Form 10-K (“Form 10-K”) filed with the U.S. Securities and Exchange Commission on January 29, 2018. Our operations are seasonal and results for interim periods are not necessarily indicative of the results for the entire year.

Accounting Pronouncements

The Financial Accounting Standards Board (the “FASB”) issued amended guidance, Compensation - Retirement Benefits - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires the bifurcation of service costs and other components of net benefit cost. The presentation of the other components of net benefit cost have been recorded in other income. On December 1, 2017, we adopted this guidance using the retrospective transition method for the presentation of the service cost component and other components of net benefit cost. The impact of adopting this guidance was immaterial to our consolidated financial statements, and as such, prior period information was not revised.

The FASB issued guidance, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. When effective, this standard will replace most existing revenue recognition guidance in U.S. generally accepted accounting principles (“U.S. GAAP”). The standard also requires more detailed disclosures and provides additional guidance for transactions that were not comprehensively addressed in U.S. GAAP. This guidance is required to be adopted by us in the first quarter of 2019. We have elected the modified retrospective adoption method which requires entities to apply the new revenue standard only to the current period consolidated financial statements and record a cumulative-effect adjustment to the December 1, 2018 opening balance of retained earnings, if any. We are substantially complete with our evaluation of changes to our revenues using the model supported by the new revenue standard. The adoption of this guidance will result in the gross presentation of prepaid travel agent commissions, shore excursions and other onboard revenues and costs, all of which were historically presented net, and will require additional disclosures. It is not expected to have a material impact to the timing of our recognition of revenues.

The FASB issued amended guidance, Business Combinations - Clarifying the Definition of a Business,which assists entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance is required to be adopted by us in the first quarter of 2019 on a prospective basis. Early adoption is permitted, including adoption in an interim period. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

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

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

The FASB issued amended guidance, Service Concession Arrangements, which clarifies that the grantor in a service arrangement should be considered the customer of the operating entity in all cases. This guidance is required to be adopted by us in the first quarter of 2019 and can be applied using either a retrospective or a modified retrospective approach. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

The FASB issued guidance, Leases, which requires an entity to recognize both assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. This guidance is required to be adopted by us in the first quarter of 2020 and must be applied using a modified retrospective approach which allows entities to either apply the new lease standard to the beginning of the earliest period presented or only to the current period consolidated financial statements. Early adoption is permitted. The initial adoption of this guidance is expected to increase both our total assets and total liabilities, reflecting the lease rights and obligations arising from our lease arrangements, and will require additional disclosures. We are currently evaluating if this guidance will have any other impact on our consolidated financial statements.

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

Other

Cruise passenger ticket revenues include fees, taxes and charges collected by us from our guests. The portion of these fees, taxes and charges included in passenger ticket revenues and commissions, transportation and other costs were $174 million and $161 million and $465 million and $440 million for the three and nine months ended August 31, 2018 and 2017, respectively.

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Unsecured Debt

9 Months Ended

Aug. 31, 2018

Debt Disclosure [Abstract]

Unsecured Debt

Unsecured Debt

At August 31, 2018, our short-term borrowings consisted of euro- denominated commercial paper of $398 million and a euro-denominated bank loan of $234 million due in 2019. For the nine months ended August 31, 2018 and 2017, we had borrowings of $2 million and $111 million and repayments of $2 million and $364 million of commercial paper with original maturities greater than three months.

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

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

In March 2018, we borrowed $370 million under a euro-denominated floating rate bank loan due in 2020 and borrowed $567 million under an export credit facility due in semi-annual installments through 2030.

In April 2018, we borrowed $229 million under an export credit facility due in semi-annual installments through 2030.

In June 2018, we entered into a $914 million export credit facility, which may be drawn in euro or U.S. dollars in 2022 and will be due in semi-annual installments through 2034. The interest rate on this export credit facility can be fixed or floating, at our discretion.

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Contingencies

9 Months Ended

Aug. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Contingencies

Contingencies

Litigation

In the normal course of our business, various claims and lawsuits have been filed or are pending against us. Most of these claims and lawsuits are covered by insurance and the maximum amount of our liability, net of any insurance recoverables, is typically limited to our self-insurance retention levels. We believe the ultimate outcome of these claims and lawsuits 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 our 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.

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Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks

9 Months Ended

Aug. 31, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks

Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks

Fair Value Measurements

Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and is measured using inputs in one of the following three categories:

• Level 1 measurements are based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

• Level 2 measurements are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or market data other than quoted prices that are observable for the assets or liabilities.

• Level 3 measurements are based on unobservable data that are supported by little or no market activity and are significant to the fair value of the assets or liabilities.

Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, certain estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized in a current or future market exchange.

Financial Instruments that are not Measured at Fair Value on a Recurring Basis

	August 31, 2018								November 30, 2017
	Carrying Value		Fair Value						Carrying Value		Fair Value
(in millions)			Level 1		Level 2		Level 3				Level 1		Level 2		Level 3
Assets
Long-term other assets (a)	$	136	$	—	$	37	$	98	$	126	$	—	$	49	$	75
Total	$	136	$	—	$	37	$	98	$	126	$	—	$	49	$	75
Liabilities
Fixed rate debt (b)	$	5,308	$	—	$	5,463	$	—	$	5,588	$	—	$	5,892	$	—
Floating rate debt (b)	4,372		—		4,409		—		3,658		—		3,697		—
Total	$	9,680	$	—	$	9,872	$	—	$	9,246	$	—	$	9,589	$	—

(a) Long-term other assets are comprised of notes receivable. The fair values of our Level 2 notes receivable were based on estimated future cash flows discounted at appropriate market interest rates. The fair values of our Level 3 notes receivable were estimated using risk-adjusted discount rates.

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

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

	August 31, 2018						November 30, 2017
(in millions)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	526	$	—	$	—	$	395	$	—	$	—
Restricted cash	15		—		—		26		—		—
Marketable securities held in rabbi trusts (a)	6		—		—		97		—		—
Derivative financial instruments	—		5		—		—		15		—
Total	$	547	$	5	$	—	$	518	$	15	$	—
Liabilities
Derivative financial instruments	$	—	$	40	$	—	$	—	$	161	$	—
Total	$	—	$	40	$	—	$	—	$	161	$	—

(a) The use of marketable securities held in rabbi trusts is restricted to funding certain deferred compensation and non-qualified U.S. pension plans.

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

Valuation of Goodwill and Trademarks

	Goodwill
(in millions)	NAA (a) Segment		EA (b) Segment			Total
At November 30, 2017	$	1,898	$	1,069		$	2,967
Foreign currency translation adjustment	—		(18		)	(18		)
At August 31, 2018	$	1,898	$	1,050		$	2,949

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

(b)    Europe & Asia (“EA”)

	Trademarks
(in millions)	NAA Segment		EA Segment			Total
At November 30, 2017	$	927	$	252		$	1,179
Foreign currency translation adjustment	—		(5		)	(5		)
At August 31, 2018	$	927	$	247		$	1,174

The determination of our reporting unit goodwill and trademark fair values includes numerous assumptions that are subject to various risks and uncertainties. We believe that we have made reasonable estimates and judgments. A change in the conditions, circumstances or strategy, may result in a need to recognize an impairment charge.

Derivative Instruments and Hedging Activities

(in millions)	Balance Sheet Location	August 31, 2018		November 30, 2017
Derivative assets
Derivatives designated as hedging instruments
Net investment hedges (a)	Prepaid expenses and other	$	5	$	3
Foreign currency zero cost collars (b)	Prepaid expenses and other	—		12
Total derivative assets		$	5	$	15
Derivative liabilities
Derivatives designated as hedging instruments
Net investment hedges (a)	Accrued liabilities and other	$	—	$	13
	Other long-term liabilities	13		17
Interest rate swaps (c)	Accrued liabilities and other	8		10
	Other long-term liabilities	13		17
		35		57
Derivatives not designated as hedging instruments
Fuel (d)	Accrued liabilities and other	6		95
	Other long-term liabilities	—		9
		6		104
Total derivative liabilities		$	40	$	161

(a) At August 31, 2018 and November 30, 2017, we had foreign currency swaps totaling $160 million and $324 million, respectively, that are designated as hedges of our net investments in foreign operations with a euro-denominated functional currency. At August 31, 2018, this foreign currency swap settles in September 2019.

(b) At August 31, 2018 and November 30, 2017, we had foreign currency derivatives consisting of foreign currency zero cost collars that are designated as foreign currency cash flow hedges for a portion of our euro-denominated shipbuilding payments. See “Newbuild Currency Risks” below for additional information regarding these derivatives.

(c) We have euro interest rate swaps designated as cash flow hedges whereby we receive floating interest rate payments in exchange for making fixed interest rate payments. These interest rate swap agreements effectively changed $422 million at August 31, 2018 and $479 million at November 30, 2017 of EURIBOR-based floating rate euro debt to fixed rate euro debt. At August 31, 2018, these interest rate swaps settle through March 2025.

(d) At August 31, 2018 and November 30, 2017, we had fuel derivatives consisting of zero cost collars on Brent crude oil (“Brent”) to cover a portion of our estimated fuel consumption through 2018. See “Fuel Price Risks” below for additional information regarding these derivatives.

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

	August 31, 2018
(in millions)	Gross Amounts		Gross Amounts Offset in the Balance Sheet		Total Net Amounts Presented in the Balance Sheet		Gross Amounts not Offset in the Balance Sheet			Net Amounts
Assets	$	5	$	—	$	5	$	(5	)	$	—
Liabilities	$	40	$	—	$	40	$	(5	)	$	36
	November 30, 2017
(in millions)	Gross Amounts		Gross Amounts Offset in the Balance Sheet		Total Net Amounts Presented in the Balance Sheet		Gross Amounts not Offset in the Balance Sheet			Net Amounts
Assets	$	15	$	—	$	15	$	(8	)	$	7
Liabilities	$	161	$	—	$	161	$	(8	)	$	153

The effective gain (loss) portions of our derivatives qualifying and designated as hedging instruments recognized in other comprehensive income were as follows:

	Three Months Ended August 31,						Nine Months Ended August 31,
(in millions)	2018			2017			2018			2017
Net investment hedges	$	3		$	(17	)	$	13		$	(33	)
Foreign currency zero cost collars – cash flow hedges	$	(1	)	$	17		$	(11	)	$	52
Interest rate swaps – cash flow hedges	$	1		$	1		$	5		$	5

There are no credit risk related contingent features in our derivative agreements, except for bilateral credit provisions within our fuel derivative counterparty agreements. These provisions require cash collateral to be posted or received to the extent the fuel derivative fair value payable to or receivable from an individual counterparty exceeds $100 million. At August 31, 2018 and November 30, 2017, no collateral was required to be posted to or received from our fuel derivative counterparties.

The amount of estimated cash flow hedges’ unrealized gains and losses that are expected to be reclassified to earnings in the next twelve months is not significant.

Financial Risks

Fuel Price Risks

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. We are also adding new, more fuel efficient ships to our fleet and are strategically disposing of less fuel efficient ships. We have Brent call options and Brent put options, collectively referred to as zero cost collars, that establish ceiling and floor prices and mitigate a portion of our economic risk attributable to potential fuel price increases through the end of 2018.

	Three Months Ended August 31,						Nine Months Ended August 31,
(in millions)	2018			2017			2018			2017
Unrealized gains on fuel derivatives, net	$	8		$	65		$	90		$	134
Realized losses on fuel derivatives, net	(4		)	(57		)	(29		)	(153		)
Gains (losses) on fuel derivatives, net	$	4		$	7		$	61		$	(19	)

Foreign Currency Exchange Rate Risks

Overall Strategy

We manage our exposure to fluctuations in foreign currency exchange rates through our normal operating and financing activities, including netting certain exposures to take advantage of any natural offsets and, when considered appropriate, through the use of derivative and non-derivative financial instruments. Our primary focus is to monitor our exposure to, and manage, the economic foreign currency exchange risks faced by our operations and realized if we exchange one currency for another. We currently only hedge 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. Our investments in foreign operations are of a long-term nature. We have $5.5 billionand $861 millionof euro- and sterling-denominated debt, respectively, including the effect of foreign currency swaps, which provides an economic offset for our operations with euro and sterling functional currency. We also partially mitigate our net investment currency exposures by denominating a portion of our foreign currency intercompany payables in our foreign operations’ functional currencies. 

Newbuild Currency Risks

Our shipbuilding contracts are typically denominated in euros. Our decision to hedge a non-functional currency ship commitment for our cruise brands is made on a case-by-case basis, considering the amount and duration of the exposure, market volatility, economic trends, our overall expected net cash flows by currency and other offsetting risks. We use foreign currency derivative contracts to manage foreign currency exchange rate risk for some of our ship construction payments. At August 31, 2018, for the following newbuild, we had foreign currency zero cost collars for a portion of euro-denominated shipyard payments. These collars are designated as cash flow hedges.

	Entered Into	Matures in	Weighted-Average Floor Rate		Weighted- Average Ceiling Rate
Nieuw Statendam	2016	November 2018	$	1.05	$	1.25

If the spot rate is between the ceiling and floor rates on the date of maturity, then we would not owe or receive any payments under these collars.

At August 31, 2018, 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 $10.5 billion and relates to newbuilds scheduled to be delivered in 2019 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 or early retirement of existing debt.

Concentrations of Credit Risk

As part of our ongoing control procedures, we monitor concentrations of credit risk associated with financial and other institutions with which we conduct significant business. We seek to minimize these credit risk exposures, including counterparty nonperformance primarily associated with our cash equivalents, investments, committed financing facilities, contingent obligations, derivative instruments, insurance contracts and new ship progress payment guarantees, by:

• Conducting business with large, well-established financial institutions, insurance companies and export credit agencies

• Diversifying our counterparties 

• Having guidelines regarding credit ratings and investment maturities that we follow to help safeguard liquidity and minimize risk

• Generally requiring collateral and/or guarantees to support notes receivable on significant asset sales, long-term ship charters and new ship progress payments to shipyards 

We currently believe the risk of nonperformance by any of our significant counterparties is remote. At August 31, 2018, our exposures under foreign currency and fuel derivative contracts and interest rate swap agreements 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. Our credit exposure also includes contingent obligations related to cash payments received directly by travel agents and tour operators for cash collected by them on cruise sales in Australia and most of Europe where we are obligated to honor our guests’ cruise payments made by them to their travel agents and tour operators regardless of whether we have received these payments. Concentrations of credit risk associated with these trade receivables, charter-hire agreements and contingent obligations are not considered to be material, principally due to the large number of unrelated accounts, the nature of these contingent obligations and their short maturities. We have not experienced significant credit losses on our trade receivables, charter-hire agreements and contingent obligations. We do not normally require collateral or other security to support normal credit sales.

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Segment Information

9 Months Ended

Aug. 31, 2018

Segment Reporting [Abstract]

Segment Information

Segment Information

Beginning in the first quarter of 2018, we revised our operating segments due to changes in our internal reporting as a result of the recent strategic realignment of our business in Australia. The presentation of prior period segment information has been revised to reflect this change. Our operating segments are reported on the same basis as the internally reported information that is provided to our chief operating decision maker (“CODM”), who is the President 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. Ourfour 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 represents 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.

	Three Months Ended August 31,
(in millions)	Revenues		Operating costs and expenses			Selling and administrative		Depreciation and amortization		Operating income (loss)
2018
NAA	$	3,805	$	1,981		$	333	$	323	$	1,168
EA	1,832		891			172		150		621
Cruise Support	31		(4		)	64		28		(57		)
Tour and Other	167		90			4		10		62
	$	5,836	$	2,958		$	573	$	511	$	1,794
2017
NAA	$	3,565	$	1,920		$	320	$	303	$	933		(a)
EA	1,767		1,007			158		147		455
Cruise Support	28		—			65		13		(50		)
Tour and Other	155		86			4		10		55
	$	5,515	$	3,013		$	547	$	473	$	1,393

	Nine Months Ended August 31,
(in millions)	Revenues		Operating costs and expenses		Selling and administrative		Depreciation and amortization		Operating income (loss)
2018
NAA	$	9,325	$	5,385	$	1,039	$	940	$	1,961
EA	4,784		2,783		551		466		984
Cruise Support	94		40		183		76		(204		)
Tour and Other	222		140		22		29		31
	$	14,425	$	8,348	$	1,794	$	1,510	$	2,772
2017
NAA	$	8,744	$	5,073	$	982	$	893	$	1,708		(a)
EA	4,206		2,661		475		411		658
Cruise Support	101		18		180		36		(133		)
Tour and Other	200		132		12		28		28
	$	13,251	$	7,884	$	1,649	$	1,368	$	2,261

(a) Includes $89 million of impairment charges related to NAA’s goodwill and trademarks.

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Earnings Per Share

9 Months Ended

Aug. 31, 2018

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

	Three Months Ended August 31,				Nine Months Ended August 31,
(in millions, except per share data)	2018		2017		2018		2017
Net income for basic and diluted earnings per share	$	1,707	$	1,329	$	2,659	$	2,060
Weighted-average shares outstanding	706		723		712		724
Dilutive effect of equity plans	2		3		2		3
Diluted weighted-average shares outstanding	707		726		714		727
Basic earnings per share	$	2.42	$	1.84	$	3.73	$	2.85
Diluted earnings per share	$	2.41	$	1.83	$	3.72	$	2.84

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Shareholders' Equity

9 Months Ended

Aug. 31, 2018

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

Effective August 27, 2018, the company approved a modification of the general authorization to repurchase Carnival Corporation common stock and/or Carnival plc ordinary shares (the “Repurchase Program”), which replenished the remaining authorized repurchases at the time of the approval to $1.0 billion. During the nine months ended August 31, 2018, we repurchased 11.8 million shares of Carnival plc ordinary shares and 7.8 million shares of Carnival Corporation common stock for $726 million and $475 million, respectively, under the Repurchase Program. At August 31, 2018, the remaining availability under the Repurchase Program was $987 million.

During the three months ended August 31, 2018, our Boards of Directors declared a dividend to holders of Carnival Corporation common stock and Carnival plc ordinary shares of $0.50 per share.

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Property and Equipment

9 Months Ended

Aug. 31, 2018

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

In March 2018, we sold and transferred an EA segment 700-passenger capacity ship.

In April 2018, we sold and transferred an EA segment 1,300-passenger capacity ship.

In June 2018, we sold an NAA segment 840-passenger capacity ship. The ship will be transferred to the buyer in July 2019.

In June 2018, we sold an EA segment 1,880-passenger capacity ship. The ship will be transferred to the buyer in August 2019.

In August 2018, we sold an NAA segment 1,680-passenger capacity ship. The ship will be transferred to the buyer in March 2019.

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Other Assets

9 Months Ended

Aug. 31, 2018

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets

Other Assets

In July 2018, we acquired a minority interest in the White Pass & Yukon Route (“White Pass”) division of TWC Enterprises Ltd. that includes White Pass’ port, railroad and retail operations in Skagway, Alaska.

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General (Policies)

9 Months Ended

Aug. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The Consolidated Statements of Income and the Consolidated Statements of Comprehensive Income for the three and nine months ended August 31, 2018 and 2017, the Consolidated Balance Sheet at August 31, 2018 and the Consolidated Statements of Cash Flows for the nine months ended August 31, 2018 and 2017 are unaudited and, in the opinion of our management, contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement. Our interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in the Carnival Corporation & plc 2017 joint Annual Report on Form 10-K (“Form 10-K”) filed with the U.S. Securities and Exchange Commission on January 29, 2018. Our operations are seasonal and results for interim periods are not necessarily indicative of the results for the entire year.

Accounting Pronouncements

Accounting Pronouncements

The Financial Accounting Standards Board (the “FASB”) issued amended guidance, Compensation - Retirement Benefits - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires the bifurcation of service costs and other components of net benefit cost. The presentation of the other components of net benefit cost have been recorded in other income. On December 1, 2017, we adopted this guidance using the retrospective transition method for the presentation of the service cost component and other components of net benefit cost. The impact of adopting this guidance was immaterial to our consolidated financial statements, and as such, prior period information was not revised.

The FASB issued guidance, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. When effective, this standard will replace most existing revenue recognition guidance in U.S. generally accepted accounting principles (“U.S. GAAP”). The standard also requires more detailed disclosures and provides additional guidance for transactions that were not comprehensively addressed in U.S. GAAP. This guidance is required to be adopted by us in the first quarter of 2019. We have elected the modified retrospective adoption method which requires entities to apply the new revenue standard only to the current period consolidated financial statements and record a cumulative-effect adjustment to the December 1, 2018 opening balance of retained earnings, if any. We are substantially complete with our evaluation of changes to our revenues using the model supported by the new revenue standard. The adoption of this guidance will result in the gross presentation of prepaid travel agent commissions, shore excursions and other onboard revenues and costs, all of which were historically presented net, and will require additional disclosures. It is not expected to have a material impact to the timing of our recognition of revenues.

The FASB issued amended guidance, Business Combinations - Clarifying the Definition of a Business,which assists entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance is required to be adopted by us in the first quarter of 2019 on a prospective basis. Early adoption is permitted, including adoption in an interim period. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

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

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

The FASB issued amended guidance, Service Concession Arrangements, which clarifies that the grantor in a service arrangement should be considered the customer of the operating entity in all cases. This guidance is required to be adopted by us in the first quarter of 2019 and can be applied using either a retrospective or a modified retrospective approach. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

The FASB issued guidance, Leases, which requires an entity to recognize both assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. This guidance is required to be adopted by us in the first quarter of 2020 and must be applied using a modified retrospective approach which allows entities to either apply the new lease standard to the beginning of the earliest period presented or only to the current period consolidated financial statements. Early adoption is permitted. The initial adoption of this guidance is expected to increase both our total assets and total liabilities, reflecting the lease rights and obligations arising from our lease arrangements, and will require additional disclosures. We are currently evaluating if this guidance will have any other impact on our consolidated financial statements.

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

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Fair Value Measurements, Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Aug. 31, 2018

Fair Value Disclosures [Abstract]

Estimated Carrying and Fair Values of Financial Instrument Assets and Liabilities Not Measured at Fair Value on a Recurring Basis

Financial Instruments that are not Measured at Fair Value on a Recurring Basis

	August 31, 2018								November 30, 2017
	Carrying Value		Fair Value						Carrying Value		Fair Value
(in millions)			Level 1		Level 2		Level 3				Level 1		Level 2		Level 3
Assets
Long-term other assets (a)	$	136	$	—	$	37	$	98	$	126	$	—	$	49	$	75
Total	$	136	$	—	$	37	$	98	$	126	$	—	$	49	$	75
Liabilities
Fixed rate debt (b)	$	5,308	$	—	$	5,463	$	—	$	5,588	$	—	$	5,892	$	—
Floating rate debt (b)	4,372		—		4,409		—		3,658		—		3,697		—
Total	$	9,680	$	—	$	9,872	$	—	$	9,246	$	—	$	9,589	$	—

(a) Long-term other assets are comprised of notes receivable. The fair values of our Level 2 notes receivable were based on estimated future cash flows discounted at appropriate market interest rates. The fair values of our Level 3 notes receivable were estimated using risk-adjusted discount rates.

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

Estimated Fair Value and Basis of Valuation of Financial Instrument Assets and Liabilities Measured at Fair Value on Recurring Basis

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

	August 31, 2018						November 30, 2017
(in millions)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	526	$	—	$	—	$	395	$	—	$	—
Restricted cash	15		—		—		26		—		—
Marketable securities held in rabbi trusts (a)	6		—		—		97		—		—
Derivative financial instruments	—		5		—		—		15		—
Total	$	547	$	5	$	—	$	518	$	15	$	—
Liabilities
Derivative financial instruments	$	—	$	40	$	—	$	—	$	161	$	—
Total	$	—	$	40	$	—	$	—	$	161	$	—

(a) The use of marketable securities held in rabbi trusts is restricted to funding certain deferred compensation and non-qualified U.S. pension plans.

Reconciliation of Changes in Carrying Amounts of Goodwill

Valuation of Goodwill and Trademarks

	Goodwill
(in millions)	NAA (a) Segment		EA (b) Segment			Total
At November 30, 2017	$	1,898	$	1,069		$	2,967
Foreign currency translation adjustment	—		(18		)	(18		)
At August 31, 2018	$	1,898	$	1,050		$	2,949

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

(b)    Europe & Asia (“EA”)

Reconciliation of Changes in Carrying Amounts of Trademarks

	Trademarks
(in millions)	NAA Segment		EA Segment			Total
At November 30, 2017	$	927	$	252		$	1,179
Foreign currency translation adjustment	—		(5		)	(5		)
At August 31, 2018	$	927	$	247		$	1,174

Estimated Fair Values of Derivative Financial Instruments and Location in the Consolidated Balance Sheets

Derivative Instruments and Hedging Activities

(in millions)	Balance Sheet Location	August 31, 2018		November 30, 2017
Derivative assets
Derivatives designated as hedging instruments
Net investment hedges (a)	Prepaid expenses and other	$	5	$	3
Foreign currency zero cost collars (b)	Prepaid expenses and other	—		12
Total derivative assets		$	5	$	15
Derivative liabilities
Derivatives designated as hedging instruments
Net investment hedges (a)	Accrued liabilities and other	$	—	$	13
	Other long-term liabilities	13		17
Interest rate swaps (c)	Accrued liabilities and other	8		10
	Other long-term liabilities	13		17
		35		57
Derivatives not designated as hedging instruments
Fuel (d)	Accrued liabilities and other	6		95
	Other long-term liabilities	—		9
		6		104
Total derivative liabilities		$	40	$	161

(a) At August 31, 2018 and November 30, 2017, we had foreign currency swaps totaling $160 million and $324 million, respectively, that are designated as hedges of our net investments in foreign operations with a euro-denominated functional currency. At August 31, 2018, this foreign currency swap settles in September 2019.

(b) At August 31, 2018 and November 30, 2017, we had foreign currency derivatives consisting of foreign currency zero cost collars that are designated as foreign currency cash flow hedges for a portion of our euro-denominated shipbuilding payments. See “Newbuild Currency Risks” below for additional information regarding these derivatives.

(c) We have euro interest rate swaps designated as cash flow hedges whereby we receive floating interest rate payments in exchange for making fixed interest rate payments. These interest rate swap agreements effectively changed $422 million at August 31, 2018 and $479 million at November 30, 2017 of EURIBOR-based floating rate euro debt to fixed rate euro debt. At August 31, 2018, these interest rate swaps settle through March 2025.

(d) At August 31, 2018 and November 30, 2017, we had fuel derivatives consisting of zero cost collars on Brent crude oil (“Brent”) to cover a portion of our estimated fuel consumption through 2018. See “Fuel Price Risks” below for additional information regarding these derivatives.

Offsetting Derivative Instruments

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

	August 31, 2018
(in millions)	Gross Amounts		Gross Amounts Offset in the Balance Sheet		Total Net Amounts Presented in the Balance Sheet		Gross Amounts not Offset in the Balance Sheet			Net Amounts
Assets	$	5	$	—	$	5	$	(5	)	$	—
Liabilities	$	40	$	—	$	40	$	(5	)	$	36
	November 30, 2017
(in millions)	Gross Amounts		Gross Amounts Offset in the Balance Sheet		Total Net Amounts Presented in the Balance Sheet		Gross Amounts not Offset in the Balance Sheet			Net Amounts
Assets	$	15	$	—	$	15	$	(8	)	$	7
Liabilities	$	161	$	—	$	161	$	(8	)	$	153

Derivatives Qualifying and Designated as Hedging Instruments Recognized in Other Comprehensive Income

The effective gain (loss) portions of our derivatives qualifying and designated as hedging instruments recognized in other comprehensive income were as follows:

	Three Months Ended August 31,						Nine Months Ended August 31,
(in millions)	2018			2017			2018			2017
Net investment hedges	$	3		$	(17	)	$	13		$	(33	)
Foreign currency zero cost collars – cash flow hedges	$	(1	)	$	17		$	(11	)	$	52
Interest rate swaps – cash flow hedges	$	1		$	1		$	5		$	5

Unrealized and Realized Gains (Losses) on Fuel Derivatives, Net

	Three Months Ended August 31,						Nine Months Ended August 31,
(in millions)	2018			2017			2018			2017
Unrealized gains on fuel derivatives, net	$	8		$	65		$	90		$	134
Realized losses on fuel derivatives, net	(4		)	(57		)	(29		)	(153		)
Gains (losses) on fuel derivatives, net	$	4		$	7		$	61		$	(19	)

Outstanding Fuel Derivatives

At August 31, 2018, for the following newbuild, we had foreign currency zero cost collars for a portion of euro-denominated shipyard payments. These collars are designated as cash flow hedges.

	Entered Into	Matures in	Weighted-Average Floor Rate		Weighted- Average Ceiling Rate
Nieuw Statendam	2016	November 2018	$	1.05	$	1.25

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Segment Information (Tables)

9 Months Ended

Aug. 31, 2018

Segment Reporting [Abstract]

Schedule of Segment Information

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 represents 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.

	Three Months Ended August 31,
(in millions)	Revenues		Operating costs and expenses			Selling and administrative		Depreciation and amortization		Operating income (loss)
2018
NAA	$	3,805	$	1,981		$	333	$	323	$	1,168
EA	1,832		891			172		150		621
Cruise Support	31		(4		)	64		28		(57		)
Tour and Other	167		90			4		10		62
	$	5,836	$	2,958		$	573	$	511	$	1,794
2017
NAA	$	3,565	$	1,920		$	320	$	303	$	933		(a)
EA	1,767		1,007			158		147		455
Cruise Support	28		—			65		13		(50		)
Tour and Other	155		86			4		10		55
	$	5,515	$	3,013		$	547	$	473	$	1,393

	Nine Months Ended August 31,
(in millions)	Revenues		Operating costs and expenses		Selling and administrative		Depreciation and amortization		Operating income (loss)
2018
NAA	$	9,325	$	5,385	$	1,039	$	940	$	1,961
EA	4,784		2,783		551		466		984
Cruise Support	94		40		183		76		(204		)
Tour and Other	222		140		22		29		31
	$	14,425	$	8,348	$	1,794	$	1,510	$	2,772
2017
NAA	$	8,744	$	5,073	$	982	$	893	$	1,708		(a)
EA	4,206		2,661		475		411		658
Cruise Support	101		18		180		36		(133		)
Tour and Other	200		132		12		28		28
	$	13,251	$	7,884	$	1,649	$	1,368	$	2,261

(a) Includes $89 million of impairment charges related to NAA’s goodwill and trademarks.

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Earnings Per Share (Tables)

9 Months Ended

Aug. 31, 2018

Earnings Per Share [Abstract]

Basic and Diluted Earnings Per Share Computation

	Three Months Ended August 31,				Nine Months Ended August 31,
(in millions, except per share data)	2018		2017		2018		2017
Net income for basic and diluted earnings per share	$	1,707	$	1,329	$	2,659	$	2,060
Weighted-average shares outstanding	706		723		712		724
Dilutive effect of equity plans	2		3		2		3
Diluted weighted-average shares outstanding	707		726		714		727
Basic earnings per share	$	2.42	$	1.84	$	3.73	$	2.85
Diluted earnings per share	$	2.41	$	1.83	$	3.72	$	2.84

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General (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2018	Aug. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Fees, taxes and charges collected from guests	$ 174	$ 161	$ 465	$ 440

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Unsecured Debt (Details) - USD ($) $ in Millions	1 Months Ended				9 Months Ended
	Apr. 30, 2018	Mar. 31, 2018	Jan. 31, 2018	Dec. 31, 2017	Aug. 31, 2018	Aug. 31, 2017	Jun. 30, 2018
Senior notes
Debt Instrument [Line Items]
Repayments of long-term debt				$ 500
Euro-denominated bank loan
Debt Instrument [Line Items]
Repayments of long-term debt			$ 365
Euro-denominated bank loan | Bank loan due 2020
Debt Instrument [Line Items]
Proceeds from long-term debt		$ 370
Sterling-denominated bank loan | Bank loan due 2022
Debt Instrument [Line Items]
Proceeds from long-term debt				$ 469
Export credit facility | Export credit facility due 2030
Debt Instrument [Line Items]
Proceeds from long-term debt	$ 229	$ 567
Export credit facility | Export credit facility due 2034
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity							$ 914
Commercial paper
Debt Instrument [Line Items]
Current unsecured debt					$ 398
Proceeds from short term debt					2	$ 111
Repayments of short term debt					2	$ 364
Euro-denominated bank loan | Bank loan due 2019
Debt Instrument [Line Items]
Current unsecured debt					$ 234

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Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks - Estimated Carrying and Fair Values of Financial Instrument Assets and Liabilities Not Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Millions	Aug. 31, 2018	Nov. 30, 2017
Carrying Value
Assets
Long-term other assets	$ 136	$ 126
Total	136	126
Liabilities
Total	9,680	9,246
Carrying Value | Fixed Rate
Liabilities
Debt	5,308	5,588
Carrying Value | Floating Rate
Liabilities
Debt	4,372	3,658
Fair Value | Level 1
Assets
Long-term other assets	0	0
Total	0	0
Liabilities
Total	0	0
Fair Value | Level 1 | Fixed Rate
Liabilities
Debt	0	0
Fair Value | Level 1 | Floating Rate
Liabilities
Debt	0	0
Fair Value | Level 2
Assets
Long-term other assets	37	49
Total	37	49
Liabilities
Total	9,872	9,589
Fair Value | Level 2 | Fixed Rate
Liabilities
Debt	5,463	5,892
Fair Value | Level 2 | Floating Rate
Liabilities
Debt	4,409	3,697
Fair Value | Level 3
Assets
Long-term other assets	98	75
Total	98	75
Liabilities
Total	0	0
Fair Value | Level 3 | Fixed Rate
Liabilities
Debt	0	0
Fair Value | Level 3 | Floating Rate
Liabilities
Debt	$ 0	$ 0

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Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks - Estimated Fair Value and Basis of Valuation of Financial Instrument Assets And Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Millions	Aug. 31, 2018	Nov. 30, 2017
Assets
Derivative financial instruments	$ 5	$ 15
Liabilities
Derivative financial instruments	40	161
Financial Instruments Measured at Fair Value on a Recurring Basis | Level 1
Assets
Restricted cash	15	26
Total	547	518
Financial Instruments Measured at Fair Value on a Recurring Basis | Level 1 | Money market funds
Assets
Cash and cash equivalents	526	395
Financial Instruments Measured at Fair Value on a Recurring Basis | Level 1 | Marketable securities held in rabbi trusts
Assets
Marketable securities held in rabbi trusts	6	97
Financial Instruments Measured at Fair Value on a Recurring Basis | Level 2
Assets
Total	5	15
Liabilities
Total	40	161
Financial Instruments Measured at Fair Value on a Recurring Basis | Level 2 | Derivative financial instruments
Assets
Derivative financial instruments	5	15
Financial Instruments Measured at Fair Value on a Recurring Basis | Level 2 | Derivative financial instruments
Liabilities
Derivative financial instruments	$ 40	$ 161

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Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks - Reconciliation of Changes in Carrying Amounts of Goodwill (Details) $ in Millions	9 Months Ended
	Aug. 31, 2018 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 2,967
Foreign currency translation adjustment	(18)
Ending balance	2,949
NAA Segment
Goodwill [Roll Forward]
Beginning balance	1,898
Foreign currency translation adjustment	0
Ending balance	1,898
EA Segment
Goodwill [Roll Forward]
Beginning balance	1,069
Foreign currency translation adjustment	(18)
Ending balance	$ 1,050

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Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks - Reconciliation of Changes in Carrying Amounts of Intangible Assets Not Subject to Amortization (Details) $ in Millions	9 Months Ended
	Aug. 31, 2018 USD ($)
Indefinite-lived Intangible Assets [Roll Forward]
Beginning balance	$ 1,179
Foreign currency translation adjustment	(5)
Ending balance	1,174
NAA Segment
Indefinite-lived Intangible Assets [Roll Forward]
Beginning balance	927
Foreign currency translation adjustment	0
Ending balance	927
EA Segment
Indefinite-lived Intangible Assets [Roll Forward]
Beginning balance	252
Foreign currency translation adjustment	(5)
Ending balance	$ 247

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Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks - Estimated Fair Values of Derivative Financial Instruments and Location on Consolidated Balance Sheets (Details) - USD ($) $ in Millions	Aug. 31, 2018	Nov. 30, 2017
Derivatives, Fair Value [Line Items]
Derivative assets	$ 5	$ 15
Derivative liabilities	40	161
Derivatives designated as hedging instruments
Derivatives, Fair Value [Line Items]
Derivative assets	5	15
Derivative liabilities	35	57
Derivatives not designated as hedging instruments
Derivatives, Fair Value [Line Items]
Derivative liabilities	6	104
Net investment hedges | Derivatives designated as hedging instruments | Prepaid expenses and other
Derivatives, Fair Value [Line Items]
Derivative assets	5	3
Net investment hedges | Derivatives designated as hedging instruments | Accrued liabilities and other
Derivatives, Fair Value [Line Items]
Derivative liabilities	0	13
Net investment hedges | Derivatives designated as hedging instruments | Other long-term liabilities
Derivatives, Fair Value [Line Items]
Derivative liabilities	13	17
Foreign currency zero cost collars | Derivatives designated as hedging instruments | Prepaid expenses and other
Derivatives, Fair Value [Line Items]
Derivative assets	0	12
Interest rate swaps | Derivatives designated as hedging instruments | Accrued liabilities and other
Derivatives, Fair Value [Line Items]
Derivative liabilities	8	10
Interest rate swaps | Derivatives designated as hedging instruments | Other long-term liabilities
Derivatives, Fair Value [Line Items]
Derivative liabilities	13	17
Interest rate swaps | Cash flow hedging
Derivatives, Fair Value [Line Items]
Interest rate cash flow hedge asset at fair value	422	479
Fuel | Derivatives not designated as hedging instruments | Accrued liabilities and other
Derivatives, Fair Value [Line Items]
Derivative liabilities	6	95
Fuel | Derivatives not designated as hedging instruments | Other long-term liabilities
Derivatives, Fair Value [Line Items]
Derivative liabilities		9
Currency swap | Derivatives designated as hedging instruments
Derivatives, Fair Value [Line Items]
Derivative liabilities	$ 160	$ 324

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Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks - Offsetting Derivative Instruments (Details) - USD ($) $ in Millions	Aug. 31, 2018	Nov. 30, 2017
Assets
Gross Amounts	$ 5	$ 15
Gross Amounts Offset in the Balance Sheet	0	0
Total Net Amounts Presented in the Balance Sheet	5	15
Gross Amounts not Offset in the Balance Sheet	(5)	(8)
Net Amounts	0	7
Liabilities
Gross Amounts	40	161
Gross Amounts Offset in the Balance Sheet	0	0
Total Net Amounts Presented in the Balance Sheet	40	161
Gross Amounts not Offset in the Balance Sheet	(5)	(8)
Net Amounts	$ 36	$ 153

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Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks - Derivatives Qualifying and Designated as Hedging Instruments Recognized in Other Comprehensive Income (Details) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2018	Aug. 31, 2017	Nov. 30, 2017
Minimum
Derivative Instruments, Gain (Loss) [Line Items]
Derivative asset, cash collateral netting threshold, fair value	$ 100,000,000		$ 100,000,000
Fuel
Derivative Instruments, Gain (Loss) [Line Items]
Collateral required to be posted	0		0		$ 0
Collateral required to be received	0		0		$ 0
Designated as hedging instruments | Net investment hedges
Derivative Instruments, Gain (Loss) [Line Items]
Effective portions of derivatives qualifying and designated as hedging instruments recognized in other comprehensive income	3,000,000	$ (17,000,000)	13,000,000	$ (33,000,000)
Designated as hedging instruments | Foreign currency zero cost collars – cash flow hedges
Derivative Instruments, Gain (Loss) [Line Items]
Effective portions of derivatives qualifying and designated as hedging instruments recognized in other comprehensive income	(1,000,000)	17,000,000	(11,000,000)	52,000,000
Designated as hedging instruments | Interest rate swaps – cash flow hedges
Derivative Instruments, Gain (Loss) [Line Items]
Effective portions of derivatives qualifying and designated as hedging instruments recognized in other comprehensive income	$ 1,000,000	$ 1,000,000	$ 5,000,000	$ 5,000,000

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Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks - Fuel Derivatives Outstanding (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2018	Aug. 31, 2017
Derivative [Line Items]
Gains (losses) on fuel derivatives, net	$ 4	$ 7	$ 61	$ (19)
Fuel
Derivative [Line Items]
Unrealized gains on fuel derivatives, net	8	65	90	134
Realized losses on fuel derivatives, net	(4)	(57)	(29)	(153)
Gains (losses) on fuel derivatives, net	$ 4	$ 7	$ 61	$ (19)

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Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks - Foreign Currency Exchange Rate Risks (Details)	Aug. 31, 2018 USD ($)
Fair Value, Measurement Inputs, Disclosure [Line Items]
Foreign currency contract commitments	$ 10,500,000,000
Foreign currency zero cost collars – cash flow hedges | Nieuw Statendam | Cash flow hedging
Fair Value, Measurement Inputs, Disclosure [Line Items]
Weighted-Average Floor Rate	1.05
Weighted- Average Ceiling Rate	1.25
Euro-denominated
Fair Value, Measurement Inputs, Disclosure [Line Items]
Debt instrument, face amount	$ 5,500,000,000.0
Sterling-denominated
Fair Value, Measurement Inputs, Disclosure [Line Items]
Debt instrument, face amount	$ 861,000,000

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Segment Information (Details) $ in Millions	3 Months Ended		9 Months Ended
	Aug. 31, 2018 USD ($)	Aug. 31, 2017 USD ($)	Aug. 31, 2018 USD ($) segment	Aug. 31, 2017 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments | segment			4
Revenues	$ 5,836	$ 5,515	$ 14,425	$ 13,251
Operating costs and expenses	2,958	3,013	8,348	7,884
Selling and administrative	573	547	1,794	1,649
Depreciation and amortization	511	473	1,510	1,368
Operating Income	1,794	1,393	2,772	2,261
Goodwill and trademark impairment	0	89	0	89
Operating Segments | NAA
Segment Reporting Information [Line Items]
Revenues	3,805	3,565	9,325	8,744
Operating costs and expenses	1,981	1,920	5,385	5,073
Selling and administrative	333	320	1,039	982
Depreciation and amortization	323	303	940	893
Operating Income	1,168	933	1,961	1,708
Operating Segments | EA
Segment Reporting Information [Line Items]
Revenues	1,832	1,767	4,784	4,206
Operating costs and expenses	891	1,007	2,783	2,661
Selling and administrative	172	158	551	475
Depreciation and amortization	150	147	466	411
Operating Income	621	455	984	658
Operating Segments | Cruise Support
Segment Reporting Information [Line Items]
Revenues	31	28	94	101
Operating costs and expenses	(4)	0	40	18
Selling and administrative	64	65	183	180
Depreciation and amortization	28	13	76	36
Operating Income	(57)	(50)	(204)	(133)
Operating Segments | Tour and Other
Segment Reporting Information [Line Items]
Revenues	167	155	222	200
Operating costs and expenses	90	86	140	132
Selling and administrative	4	4	22	12
Depreciation and amortization	10	10	29	28
Operating Income	$ 62	$ 55	$ 31	$ 28

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Earnings Per Share - Basic and Diluted Earnings Per Share Computation (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2018	Aug. 31, 2017
Earnings Per Share [Abstract]
Net income for basic and diluted earnings per share	$ 1,707	$ 1,329	$ 2,659	$ 2,060
Weighted-average shares outstanding (in shares)	706	723	712	724
Dilutive effect of equity plans (in shares)	2	3	2	3
Diluted weighted-average shares outstanding (in shares)	707	726	714	727
Basic earnings per share (in dollars per share)	$ 2.42	$ 1.84	$ 3.73	$ 2.85
Diluted earnings per share (in dollars per share)	$ 2.41	$ 1.83	$ 3.72	$ 2.84

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Shareholders' Equity (Details) - USD ($) $ / shares in Units, shares in Millions	3 Months Ended		9 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2018	Aug. 31, 2017	Apr. 10, 2018
Equity, Class of Treasury Stock [Line Items]
Shares repurchase program, aggregate value authorized for repurchase					$ 1,000,000,000.0
Purchases of treasury stock (in dollars)			$ 1,205,000,000	$ 305,000,000
Dividends declared per share (in dollars per share)	$ 0.5	$ 0.4	$ 1.45	$ 1.15
Repurchase Program
Equity, Class of Treasury Stock [Line Items]
Remaining authorized repurchase amount	$ 987,000,000		$ 987,000,000
Repurchase Program | CARNIVAL PLC
Equity, Class of Treasury Stock [Line Items]
Shares repurchased (in shares)			11.8
Purchases of treasury stock (in dollars)			$ 726,000,000
Repurchase Program | Carnival Corp
Equity, Class of Treasury Stock [Line Items]
Shares repurchased (in shares)			7.8
Purchases of treasury stock (in dollars)			$ 475,000,000

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Property and Equipment (Details) - passenger	1 Months Ended
	Aug. 31, 2018	Jul. 31, 2018	Jun. 30, 2018	Apr. 30, 2018	Mar. 31, 2018
Property, Plant and Equipment [Abstract]
Passenger capacity of ship sold	1,680	1,880	840	1,300	700