Carnival PLC

Annual Report

Year Ended November 30, 2023

The Carnival plc Annual Report comprises the Strategic Report, Carnival plc consolidated Group and

Company Financial Statements, the DLC Financial Statements and certain parts of the Proxy Statement,

including its Annexes (the “Proxy Statement”).

The Directors consider that, within the Carnival Corporation and Carnival plc dual listed company (“DLC”)

arrangement, the most appropriate presentation of Carnival plc’s results and financial position is by reference to

the Carnival Corporation & plc U.S. GAAP consolidated financial statements (“DLC Financial Statements”).

Accordingly, the DLC Financial Statements are included as part of the Carnival plc Annual Report.

Cautionary Note Concerning Factors That May Affect Future Results

Some of the statements, estimates or projections contained in this document are “forward-looking

statements”that involve risks, uncertainties and assumptions with respect to us, including some statements

concerning future results, operations, outlooks, plans, goals, reputation, cash flows, liquidity and other events

which have not yet occurred. These statements are intended to qualify for the safe harbors from liability

provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of

1934, as amended. All statements other than statements of historical facts are statements that could be

deemed forward-looking. These statements are based on current expectations, estimates, forecasts and

projections about our business and the industry in which we operate and the beliefs and assumptions of our

management. We have tried, whenever possible, to identify these statements by using words like “will,”

“may,” “could,” “should,” “would,” “believe,” “depends,” “expect,” “goal,” “aspiration,” “anticipate,”

“forecast,” “project,” “future,” “intend,” “plan,” “estimate,” “target,” “indicate,” “outlook,” and similar

expressions of future intent or the negative of such terms.

Forward-looking statements include those statements that relate to our outlook and financial position

including, but not limited to, statements regarding:

• Pricing

• Adjusted net income (loss)

• Booking levels

• Adjusted EBITDA

• Occupancy

• Adjusted earnings per share

• Interest, tax and fuel expenses

• Adjusted free cash flow

• Currency exchange rates

• Net per diems

• Goodwill, ship and trademark fair values

• Net yields

• Liquidity and credit ratings

• Adjusted cruise costs per ALBD

• Investment grade leverage metrics

• Adjusted cruise costs excluding fuel per ALBD

• Estimates of ship depreciable lives and

residual values

• Adjusted return on invested capital

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 in this

Strategic Report. This Strategic Report contains important cautionary statements of the known factors that

we consider could materially affect the accuracy of our forward-looking statements and adversely affect

our business, results of operations and financial position. Additionally, many of these risks and uncertainties

are currently, and in the future may continue to be, amplified by our substantial debt balance incurred

during the pause of our guest cruise operations. There may be additional risks that we consider immaterial

or which are unknown.

Forward-looking statements should not be relied upon as a prediction of actual results. Subject to any

continuing obligations under applicable law or any relevant stock exchange rules, we expressly disclaim any

obligation to disseminate, after the date of this document, any updates or revisions to any such forward-

looking statements to reflect any change in expectations or events, conditions or circumstances on which

any such statements are based. Forward-looking and other statements in this document may also address our

sustainability progress, plans, and goals (including climate change- and environmental-related matters). In

addition, historical, current, and forward-looking sustainability- and climate-related statements may be based

on standards and tools for measuring progress that are still developing, internal controls and processes

that continue to evolve, and assumptions and predictions that are subject to change in the future and may

not be generally shared.

Strategic Report

The Directors consider that within the DLC arrangement, the most appropriate presentation of Carnival

plc’s business strategy is by reference to the consolidated strategy of Carnival Corporation & plc. Accordingly,

this Strategic Report presents the required strategy and business review for Carnival Corporation & plc in

order to satisfy reporting requirements of the Companies Act 2006.

CARNIVAL PLC ANNUAL REPORT

PAGE NO.

Strategic Report

Executive Overview

.....................................................

1. Business

...........................................................

A. Overview

........................................................

I. Summary

.......................................................

II. Purpose & Mission, Vision, Values and Priorities

...........................

B. Global Cruise Industry

...............................................

I. Overview

.......................................................

II. Passenger Capacity by Ocean Going Vessels

..............................

III. Competition

....................................................

C. Our Global Cruise Business

...........................................

I. Segment and Brand Information

.......................................

II. Ships Under Contract for Construction

.................................

III. Descriptions of Cruise Brands

.......................................

IV. Trademarks and Other Intellectual Property

..............................

V. Passengers Carried and Principal Source Geographic Areas

....................

VI. Cruise Programs

.................................................

VII. Cruise Pricing and Payment Terms

....................................

VIII. Seasonality

...................................................

IX. Onboard and Other Revenues

........................................

X. Port Destinations and Private Islands

...................................

XI. Marketing Activities

..............................................

XII. Sales Channels

.................................................

XIII. Supply Chain

..................................................

XIV. Human Capital Management and Employees

............................

XV. Ethics and Compliance

............................................

XVI. Information Technology and Data Privacy

.............................

XVII. Insurance

....................................................

XVIII. Taxation

....................................................

XIX. Governmental Regulations

........................................

XX. Sustainability and Environmental Impact

...............................

D. Website Access to Carnival Corporation & plc SEC Reports

.....................

E. Industry and Market Data

............................................

F. Properties

........................................................

G. Legal Proceedings

..................................................

H. Executive Officers and Corporate Governance

..............................

I. Dividends

........................................................

J. Repurchase Authorizations

............................................

2. Business Review

.....................................................

3. Internal Control and Risk Assessment

......................................

4. Risk Management and/or Mitigation of Principal and Emerging Risks

...............

CARNIVAL PLC ANNUAL REPORT

PAGE NO.

5. Going Concern Confirmation and Viability Statement

...........................

6. Non-Financial and Sustainability Information Statement

.........................

7. Section 172(1) Statement

...............................................

Carnival plc Financial Statements for the year ended November 30, 2023

Carnival plc Group Financial Statements

......................................

Carnival plc Parent Company Financial Statements

...............................

113

PricewaterhouseCoopers LLP Independent Auditors’ Report

........................

127

DLC Financial Statements and Other Information

DLC Financial Statements

................................................

136

Common Stock and Ordinary Shares

........................................

177

Stock Performance Graphs

................................................

178

Corporate and Other Information

...........................................

180

Proxy

Statement

Page No.

Other Information from the Proxy Statement

Carnival plc Directors’ Report

..............................................

A-1

Carnival plc Directors’ Remuneration Report – Part I

..............................

Carnival plc Directors’ Remuneration Report – Part II

.............................

B-1

Carnival plc Corporate Governance Report

.....................................

C-1

The Carnival plc Annual Report has been submitted to the National Storage Mechanism in European

Single Electronic Format (“ESEF”) and is available for inspection at

data.fca.org.uk/#/nsm/nationalstoragemechanism and will be included in the Annual Meeting materials

available to the Carnival plc shareholders. Only the Carnival plc Annual Report in ESEF is the official version

for the purposes of the ESEF Regulation. The Form 10-K is not set forth within this document but is

available for viewing at www.carnivalcorp.com or www.carnivalplc.com.

2023 Executive Overview

We consistently set records and achieved other significant milestones during this past year, including:

• Full year revenues hit an all-time high of $21.6 billion.

• For the first time since the resumption of guest cruise operations, net income was positive during the

third quarter, generating $1.07 billion.

• We entered 2024 with our best booked position on record, for both price and occupancy.

• Total customer deposits for each quarter throughout 2023 consistently surpassed the previous

quarterly records.

• We reduced our debt balance by $4.6 billion from its peak in the first quarter of 2023 and ended the

year with $5.4 billion of liquidity.

The strengthening demand environment across all our brands contributed to our revenue growth as we

drove improvements in ticket prices while closing the double-digit occupancy gap from the start of the year

and reaching historical occupancy levels for the second half of 2023.

We believe our advertising investments and other demand generation efforts during the past 18 months have

successfully elevated awareness and consideration for our brands, leading to record booking levels and

revenue results. In addition, these efforts enabled us to attract more new-to cruise and more new-to brand

guests compared to 2019. We are building momentum in closing the value gap to land-based alternatives,

capturing over 3.5 million new-to cruise guests in 2023 and remain well-positioned to take share from land-

based alternatives.

We continue to take actions to further stimulate demand and maintain our momentum through 2024 and

beyond. We are focused on ongoing improvements across the commercial space as we further rollout

advancements to our yield management tools and lead generation techniques, continue to invest in sales and

sales support, and build on already strong relationships with our trade partners. This is complemented by

our strategy to pull forward the sale of onboard items through bundled product offerings and pre-cruise sales.

We are also not losing sight of our expense base, as we have worked to mitigate the impacts of a high

inflation environment by leveraging our scale through cost optimization initiatives. We have made investments

that we expect to increase our cost efficiencies in the future, including successfully installing SpaceX’s

Starlink, next generation internet across our fleet, which is expected to drive more than a 20% reduction in

cost per megabit in 2024. In addition, we expect it will increase our bandwidth pipeline, resulting in both

improved guest experience and higher onboard revenues. We also launched Maritime Asset Strategy

Transformation (“MAST”), a centralized system developed to optimize equipment and machinery

management across our brands and our fleet.

During 2023, we continued to work aggressively to reduce our environmental footprint and fuel consumption.

Our deep commitment resulted in industry-leading fuel efficiency and a more than 10% reduction in

absolute GHG emissions compared to our peak year of 2011, despite capacity growth of 30% over the same

period. We also exceeded our shore power capability goal and our fleet now has twice as many ships ready

to plug into shore power as there are ports currently able to provide it.

As a result of our fleet optimization efforts, our fleet is now one year younger than prior to pausing our

guest cruise operations four years ago. During 2023 alone we benefited from the introduction of three

fantastic new ships including

Carnival Celebration

and

Arvia,

leveraging the scale of our popular and

exceptionally efficient series of excel-class ships, and

Seabourn Pursuit

, our second luxury expedition ship.

In addition, Carnival Cruise Line welcomed

Carnival Venezia,

which was transferred from Costa, becoming

the first ship as part of Carnival’s Fun Italian Style™ platform. We will continue to optimize our brand

portfolio by transferring

Costa Firenze

to Carnival Cruise Line in 2024.

We also made meaningful progress in other strategic asset projects. We began construction on Celebration

Key in Grand Bahama, which will be the largest and closest exclusive destination in our portfolio. While not

expected to open until summer 2025, we have begun generating consumer awareness and excitement

around this fantastic upcoming destination. We also started the process for a significant upsize in guest

traffic at Half Moon Cay, our exclusive and beautiful pristine island destination in The Bahamas, with the

creation of a pier-side berth that can accommodate our largest vessels. In addition, we commenced work with

our Grand Bahama Shipyard partners on the construction of two floating docks, one of which will have

the largest lifting capacity in the world. Together, these strategic investments are expected to significantly

benefit us by helping to reduce travel time, further reducing our fuel consumption and preserving ship revenue

days.

Strategic Report

Our significantly improved 2023 cash from operations enabled us to notably reduce the substantial debt

balance incurred during the pause of guest cruise operations. In 2023, we made sizeable debt prepayments

and ended the year with over $5 billion of liquidity. Looking forward, we expect to continue to strategically

refinance and prepay debt, leveraging our improving operating cash flow and the return of substantially

all of the remaining credit card reserves during the first quarter of 2024.

In addition, with nearly two-thirds of 2024 on the books already, we are well positioned to achieve another

year of record revenues. This, combined with excess liquidity, is expected to enable us to continue actively

managing down debt and reducing interest expense, leaving us on our path back to achieving investment

grade credit ratings and higher return on invested capital.

This has been a truly remarkable year, and we have come a long way in an incredibly short amount of time.

We delivered unforgettable happiness to over 12 million guests this year and look forward to continuing

to provide our guests with extraordinary cruise vacations in 2024, while honoring the integrity of every ocean

we sail, place we visit and life we touch.

Business.

Overview

Summary

Carnival Corporation was incorporated in Panama in 1974 and Carnival plc was incorporated in England

and Wales in 2000. Carnival Corporation and Carnival plc operate a dual listed company (“DLC”), whereby

the businesses of Carnival Corporation and Carnival plc are combined through a number of contracts and

through provisions in Carnival Corporation’s Articles of Incorporation and By-Laws and Carnival plc’s

Articles of Association. The two companies operate as if they are a single economic enterprise with a

single executive management team and identical Boards of Directors, but each has retained its separate

legal identity. Carnival Corporation and Carnival plc are both public companies with separate stock exchange

listings and their own shareholders. Together with their consolidated subsidiaries, Carnival Corporation

and Carnival plc are referred to collectively in this Strategic Report as “Carnival Corporation & plc,”

“company,” “our,” “us” and “we.” We are the largest global cruise company, and among the largest leisure

travel companies, with a portfolio of world-class cruise lines — AIDA Cruises, Carnival Cruise Line, Costa

Cruises, Cunard, Holland America Line, P&O Cruises (Australia), P&O Cruises (UK), Princess Cruises

and Seabourn.

II.

Purpose & Mission, Vision, Values and Priorities

Purpose & Mission

To deliver unforgettable happiness to our guests by providing extraordinary cruise vacations, while honoring

the integrity of every ocean we sail, place we visit and life we touch.

Vision

As the global leader in the cruise industry, we will lead the way in innovative and sustainable cruising to

deliver memorable vacations and build borderless connections.

Culture Essentials (our Core Values)

•

Speak Up

— Our voice is our strength. Every one of us, regardless of level or role, speaks up when

we have questions, comments, concerns, or new ideas. If we see something wrong or that doesn’t seem

right, we say something and trust our voices will be heard without fear of retaliation.

•

Respect & Protect

— The health, safety and well-being of our people and the planet are vital. We

choose to take decisive actions to respect and protect every life we touch, the places we sail and the

laws that govern us.

•

Empower

— We and our team members have the time, tools and support we need to do our best

work. We’re empowered to take personal ownership and accountability to succeed, and we take pride

in our work.

•

Improve

— Our business is built on forward motion. We have the courage to dream big, driving

innovation and continuous improvement in guest and team member experiences, operations,

compliance, sustainability and beyond.

•

Listen & Learn

— We listen actively and seek to understand before responding, because the more

perspectives we have, the better decisions we make. We value and respect the words and ideas of others,

keeping an open mind, and learning from our successes and failures.

•

Communicate

— We openly share our knowledge, skills and information across brands, functions

and the entire company to further our collective success. Together we champion our purpose &

mission, vision, values and company priorities.

Priorities

Ensure each of our world-class brands owns its space in the vacation market by delivering extraordinary

experiences tailored to its guests.

We understand vacation expectations and preferences vary widely among our diverse audience of potential

guests. To fulfill our purpose & mission, and in the process achieve outstanding guest satisfaction levels,

industry-leading demand and improved pricing, each of our brands must carve out a distinct identity for

delivering cruise experiences. Our brands must effectively market their uniqueness to existing and potential

guests and deliver on their promise across the entire guest journey.

Become travel and leisure’s employer of choice.

We celebrate our diverse team of over 160,000 team members representing approximately 150 countries and

are committed to providing a welcoming and inclusive environment where people from different

backgrounds, experiences and walks of life can succeed. We care deeply for our team members and must

always cultivate an atmosphere of openness, respect and trust. We know our team members are at the heart

of inspiring unforgettable happiness, so we strive to be the world’s number-one choice for hospitality,

travel and leisure careers.

Maintain our commitment to seek excellence in compliance, environmental protection and in looking after the

safety, health and well-being of every life we touch.

Achieving our purpose & mission depends on being good corporate citizens and stewards of the environment.

Safeguarding the planet we call home, our guests, the communities we serve, and our Carnival family, and

complying with the laws and regulations that govern our business, is vital to our success.

Set the pace with the industry’s smartest solutions that deliver on our sustainability roadmap to 2030.

Our earth, ecosystem and environment mean everything to us. Without the incredible communities and

scenic spaces we operate in, our purpose & mission of inspiring unforgettable happiness would be impossible.

We’re determined to lead the way in sustainable cruising by promoting positive climate action, contributing

to a circular economy, partnering with the communities we sail to and from and reducing our environmental

footprint. To do this, we are investing in technology upgrades and fleet improvements, piloting alternative fuel

types, optimizing itineraries and cultivating a workforce that mirrors the diversity of the communities we

encounter along the way.

Strengthen our balance sheet and deliver long-term shareholder value.

In recent years, travel and leisure has endured volatility unlike anything seen in modern history, including

unique obstacles that disproportionately affected the cruise industry. With our operations now at full strength

and the continued support of our guests, team members, investors and other stakeholders, we are focused

on our financial fitness. We’re determined to drive revenue, operate effectively and efficiently at scale, generate

record levels of cash from operations and invest our capital wisely. We believe this will allow us to responsibly

reduce our debt over time and return to strong profitability, improve our return on invested capital as well

as approach investment-grade leverage metrics.

Strategic Report

Global Cruise Industry

Overview

In the face of the global impact of COVID-19, we paused our guest cruise operations in March 2020 and

began resuming guest cruise operations in 2021. In 2023, we completed our return to guest cruise operations.

Cruising offers a broad range of products and services to suit vacationing guests of many ages, backgrounds

and interests. Each brand in our portfolio meets the needs of a unique set of consumer psychographics

and vacation needs which allows us to penetrate large addressable customer segments. The mobility of cruise

ships enables us to move our vessels between regions in order to meet changing demand across different

geographic areas.

Cruise brands can be broadly classified as offering contemporary, premium and luxury cruise experiences.

The contemporary experience appeals to a broad segment of the cruise vacation industry, including families

with children of all ages, features a variety of activities and entertainment venues and historically includes

cruises that last seven days or less. The premium experience emphasizes quality, comfort, style and more

destination-focused itineraries. The premium experience generally includes cruises that last from seven to

14 days. The luxury experience is generally characterized by very high standards of accommodation and

service, smaller vessel size and exotic itineraries to ports that are inaccessible by larger ships. We have product

and service offerings in each of these three broad classifications.

II.

Passenger Capacity by Ocean Going Vessels

Passenger Capacity as of

December 31 (a) (b)

Calendar Year

Global Cruise

Industry (c)

Carnival

Corporation & plc

2019

..............................................

589,820

254,010

2020

..............................................

607,500

246,450

2021

..............................................

636,270

253,950

2022

..............................................

663,970

259,060

2023

..............................................

701,110

263,300

2024

..............................................

733,690

270,070

2025

..............................................

769,150

274,380

2026

..............................................

789,860

274,380

(a)

2024-2026 data is estimated based on announced newbuilds and ship retirements and does not include

an estimate for unannounced ship retirements.

(b)

In accordance with cruise industry practice, passenger capacity is calculated based on the assumption

of two passengers per cabin even though some cabins can accommodate three or more passengers.

(c)

Global cruise industry data was obtained from Cruise Industry News.

III.

Competition

We compete with land-based vacation alternatives throughout the world, such as hotels, resorts (including all-

inclusive resorts), theme parks, organized tours, casinos, vacation ownership properties, and other internet-

based alternative lodging sites. Based on 2023 Cruise Industry News statistics, as of December 31, 2023,

we, along with our principal cruise competitors Royal Caribbean Group, Norwegian Cruise Line Holdings,

Ltd. and MSC Cruises, represented approximately 80% of the cruise industry capacity.

Our Global Cruise Business

Segment and Brand Information

November 30, 2023

Passenger

Capacity

Percentage of

Total Capacity

Number of

Cruise Ships

North America and Australia (“NAA”) Segment

Carnival Cruise Line

........................

79,620 (a)

31%

Princess Cruises

...........................

46,270

Holland America Line

.......................

22,920

P&O Cruises (Australia)

.....................

7,230

Seabourn

................................

3,100

159,150

Europe Segment

Costa Cruises (“Costa”)

......................

35,380 (a)

AIDA Cruises (“AIDA”)

.....................

32,280

P&O Cruises (UK)

.........................

24,300

Cunard

.................................

6,820

98,780

257,930

100%

(a)

As of November 30, 2023 Costa includes

Costa Firenze,

passenger capacity of 4,240, which will be

transferred to Carnival Cruise Line in 2024.

We also have a Cruise Support segment that includes our portfolio of leading port destinations and

exclusive islands as well as other services, all of which are operated for the benefit of our cruise brands.

In addition to our cruise operations, we own Holland America Princess Alaska Tours, the leading tour

company in Alaska and the Canadian Yukon, which complements our Alaska cruise operations. Our tour

company owns and operates hotels, lodges, glass-domed railcars and motorcoaches which comprise our Tour

and Other segment.

II.

Ships Under Contract for Construction

As of November 30, 2023, we have a total of 4 cruise ships expected to be delivered through 2025. Our ship

construction contracts are with Fincantieri in Italy and Meyer Werft in Germany.

Expected

Delivery Date

Passenger Capacity

Lower Berth

Carnival Cruise Line

Carnival Jubilee

..................................

December 2023

5,360

Princess Cruises

Sun Princess

....................................

January 2024

4,310

Star Princess

....................................

July 2025

4,310

Cunard

Queen Anne

.....................................

April 2024

2,960

Strategic Report

III.

Descriptions of Cruise Brands

Carnival Cruise Line is “The World’s Most Popular Cruise Line

” and has provided multi-generational

family entertainment at exceptional value to its guests for over 50 years. Carnival Cruise Line creates an

environment where guests can be their most playful selves on ships that are designed to inspire the experience

of bringing people together, with limitless opportunities for guests to create their own fun. In the spring of

2023, Carnival Cruise Line introduced Carnival Fun Italian Style

, a new concept which marries the great

service, food and entertainment that Carnival’s guests enjoy with Italian design features.

Princess Cruises is The Love Boat

, the brand that introduced the world to the elegance and romance of

modern-day cruising and has delivered dream vacations to millions of guests for over 55 years in the most

sought-after destinations. Princess combines extraordinary large ship amenities with elite service

personalization and simplicity to create meaningful connections and unforgettable moments in the most

incredible settings across the globe.

Holland America Line has been exploring the world for over 150 years and pioneered cruising in Alaska

and Yukon. Its fleet offers an ideal mid-sized ship experience. Holland America Line’s ships feature a diverse

range of enriching experiences focused on destination exploration and personalized travel. Live music at

sea fills each evening at Music Walk, and dining venues feature exclusive selections from a Culinary Council

of world-famous chefs.

For over 90 years, P&O Cruises (Australia) has taken Australians & New Zealanders on dream holidays to

the most incredible destinations along the Australian coast as well as the idyllic South Pacific. The home-

grown cruise line delivers a holiday with great entertainment, world-class dining and unforgettable onboard

experiences. Delivered in the Aussie way, guests can choose to do everything, or nothing at all.

Seabourn, a leader in ultra-luxury cruising, sails to legendary cities and less-traveled ports. Intimate ships

with a yacht-like atmosphere, allow guests to discover the unexpected — about the world and about

themselves. Guests enjoy all ocean-front suites and world-class gourmet dining as they wish. Seabourn

creates moments of surprise and delight known as “Seabourn Moments”in an environment that fosters

building meaningful connections with fellow travelers, crew members and the communities they visit.

Seabourn’s fleet includes two purpose-built ultra-luxury expedition ships offering amenities such as

submarines, Zodiacs

and kayaks.

For 75 years, Costa’s ships have sailed the seas of the world, offering a diverse choice of cruise holidays.

Costa primarily serves guests from Continental Europe and South America, enriching them through the

exploration of destinations and unique experiences, both onboard and ashore. Its warm hospitality,

entertainment and gastronomy, featuring a true European touch and Italian passion makes Costa different

from any other cruise experience.

AIDA is the leading and most recognized brand in the German cruise market. AIDA delivers unique travel

experiences with modern comfort, where guests of all ages feel at home and enjoy consistently excellent service

accompanied by the AIDA smile. Guests across generations enjoy the German-inspired modern premium

lifestyle cruise experience with a wide variety of culinary delights, first-class entertainment, unforgettable

shore excursions, numerous sports activities, and spacious wellness areas to relax.

P&O Cruises (UK) is Britain’s largest cruise line, welcoming guests to extraordinary travel experiences

designed in a distinctively British way — through a blend of discovery, relaxation and exceptional service

catered towards British tastes. P&O Cruises (UK)’s fleet of premium ships deliver authentic travel experiences

around the globe, combining style, quality and innovation with a sense of occasion and attention to detail,

to create a truly memorable holiday.

For over 180 years, the iconic Cunard fleet has perfected the timeless art of luxury ocean travel. While

onboard, Cunard guests experience unique signature moments, from Cunard’s white gloved afternoon tea

service to its renowned Insights Speaker program. Guest expectations are exceeded through Cunard’s

exemplary White Star Service

. From the moment a guest steps onboard, every detail of their voyage is

curated to ensure they feel special and are inspired by unique events. Onboard Cunard, guests are free to do

as much or as little as they please.

Strategic Report

IV.

Trademarks and Other Intellectual Property

We own, use and/or have registered or licensed numerous trademarks, patents and patent pending designs

and technology, copyrights and domain names, which have considerable value and some of which are widely

recognized throughout the world. These intangible assets enable us to distinguish our cruise products and

services, ships and programs from those of our competitors. We own or license the trademarks for the trade

names of our cruise brands, each of which we believe is a widely-recognized brand in the cruise industry,

as well as our ship names and a wide variety of cruise products and services.

Passengers Carried and Principal Source Geographic Areas

In 2023, we carried 12.5 million passengers, consisting of 8.6 million carried by our NAA segment and

3.8 million carried by our Europe segment. In 2022, we carried 7.7 million passengers, consisting of 5.6 million

carried by our NAA segment and 2.1 million carried by our Europe segment, which was lower than our

historical levels as a result of the pause and subsequent resumption of our guest cruise operations.

Carnival Corporation & plc

Passengers Carried

Brands’ Main Source Market(s)

(in thousands)

2023

2022

2021

United States and Canada

7,410

5,140

660

Carnival Cruise Line, Cunard,

Holland America Line, Princess Cruises

and Seabourn

Continental Europe

.......

2,590

1,610

390

AIDA and Costa

United Kingdom

.........

970

660

170

Cunard and P&O Cruises (UK)

Australia and New Zealand . .

940

230

Carnival Cruise Line, P&O Cruises (Australia)

and Princess Cruises

Other

.................

550

Total

.................

12,460

7,730

1,220

Data for 2022 and 2021 is not representative of a full year of operations.

VI.

Cruise Programs

Carnival Corporation & plc

Percentage of Passenger Capacity by Itinerary

2024

2023

2022

Caribbean

..............................

33%

31%

34%

Europe without Mediterranean

...............

Mediterranean

...........................

Alaska

................................

Australia and New Zealand

..................

Other

.................................

100%

Data for 2022 is not representative of a full year of operations.

VII.

Cruise Pricing and Payment Terms

Each of our cruise brands establishes pricing for the upcoming seasons which are made available primarily

through the internet, although published materials and electronic communications are also used. Our brands

have multiple pricing levels that vary by source market, category of guest accommodation, ship, season,

duration and itinerary. Cruise prices frequently change in a dynamic pricing environment and are impacted

by a number of factors, including the number of available cabins for sale in the marketplace and the level

of guest demand. We offer a variety of special promotions, including early booking, past guest recognition

and travel agent programs.

Our bookings are generally taken several months in advance of the cruise departure date. Typically, the

longer the cruise itinerary, the further in advance the bookings are made. This lead time allows us to manage

our prices in relation to demand for available cabins through our revenue management capabilities and

other initiatives.

The cruise ticket price typically includes the following:

• Accommodations

• Most meals, including snacks at numerous venues

• Access to amenities such as swimming pools, water slides, water parks, whirlpools, a health club, and

sun decks

• Childcare and supervised youth programs

• Entertainment, such as theatrical and comedy shows, live music and nightclubs

• Visits to multiple destinations

We offer value added packages to induce ticket sales to guests and groups and to encourage the advance

purchase of certain onboard items. These packages are bundled with cruise tickets and sold to guests for a

single price rather than as a separate package and may include one or more of the following:

• Beverage packages

• Internet packages

• Shore excursions

• Photo packages

• Air packages

• Onboard spending credits

• Specialty restaurants

• Service charges

Our brands’payment terms generally require that a guest pay a deposit to confirm their reservation and

then pay the balance due before the departure date.

VIII.

Seasonality

Our passenger ticket revenues are seasonal. Demand for cruises has been greatest during our third quarter,

which includes the Northern Hemisphere summer months. This higher demand during the third quarter

results in higher ticket prices and occupancy levels and, accordingly, the largest share of our operating

income is typically earned during this period. Our results are also impacted by ships being taken out-of-

service for planned maintenance, which we schedule during non-peak seasons. In addition, substantially all

of Holland America Princess Alaska Tours’revenue and operating income is generated from May through

September in conjunction with Alaska’s cruise season.

IX.

Onboard and Other Revenues

Onboard and other activities are provided either directly by us or by independent concessionaires, from

which we receive either a percentage of their revenues or a fee. Concession revenues do not have direct

expenses because the costs and services incurred for concession revenues are borne by our concessionaires.

In 2023, we earned 34% of our cruise revenues from onboard and other revenue goods and services including:

• Beverage sales

• Internet and communication services

• Casino gaming

• Full-service spas

• Shore excursions

• Specialty restaurants

• Retail sales

• Art sales

• Photo sales

• Laundry and dry-cleaning services

Port Destinations and Exclusive Islands

We operate a portfolio of port destinations and exclusive islands enabling us to offer exceptional experiences

to 5.7 million guests by creating a wide variety of high-quality destinations that are uniquely tailored to

our guests’preferences. In addition, to secure preferential berth access to third-party ports, we enter into

berthing agreements and commitments.

Strategic Report

In May 2022, Carnival Cruise Line broke ground on its new exclusive cruise port destination, Celebration

Key, expected to open in 2025 and located on the south side of Grand Bahama Island. Celebration Key will

include a pier able to accommodate up to two of our largest ships simultaneously, welcoming guests to a

stunning beach and further expanding our experience offerings with an abundance of features and amenities

for our guests. Additionally, our investment in Celebration Key will support our efforts to design more

energy efficient itineraries based on its strategic location and will be an important addition to our current

portfolio of six corporate operated ports and destinations:

• Puerta Maya in Cozumel, Mexico

• Grand Turk Cruise Center in Turks & Caicos

• Mahogany Bay in Isla Roatan, Honduras

• Amber Cove in the Dominican Republic

• Half Moon Cay, an exclusive island in The Bahamas

• Princess Cays, an exclusive island in The Bahamas

XI.

Marketing Activities

Guest feedback and research support the development of our overall marketing and business strategies to

drive demand for cruises and increase the number of first-time cruisers. Our goal has always been to increase

consumer awareness for cruise vacations and further grow our share of their vacation spend. We measure

and evaluate key drivers of guest loyalty and their satisfaction with our products and services that provide

valuable insights about guests’cruise experiences. We closely monitor our net promoter scores, which reflect

the likelihood that our guests will recommend our brands’ cruise products and services to friends and

family, including those new-to-cruise.

During 2023, we continued our increased marketing and advertising programs after significantly reducing

both during the pause and initial resumption of guest cruise operations. Our brands have comprehensive

marketing and advertising programs across diverse mediums to promote their products and services to

vacationers and our travel agent partners. Each brand’s marketing activities have generally been designed to

reach a local region in the local language. We are focused on driving further brand differentiation and

clarity around each of our brand’s optimal target segments, ensuring that our creative marketing speaks to

each brand’s target audience and launching more effective digital performance marketing and lead generation

approaches. Our marketing efforts historically have allowed us to attract new guests online by leveraging

the reach and impact of digital marketing and social media. Over time, we have invested in new marketing

technologies to deliver more engaging and personalized communications. This has helped us cultivate guests

as advocates of our brands, ships, itineraries and onboard products and services.

Substantially all of our cruise brands offer past guest recognition programs that reward repeat guests with

special incentives such as reduced fares, onboard activity discounts, complimentary laundry and internet

services, expedited ship embarkation and disembarkation and special onboard activities.

XII.

Sales Channels

We sell our cruises through travel agents, tour operators, company vacation planners, our websites and

onboard future cruise consultants. Our individual cruise brands’ relationships with their travel agent partners

are generally independent of each of our other brands. Our travel agents’relationships are generally not

exclusive and travel agents generally receive a base commission, plus the potential of additional commissions,

including discounts or complimentary tour conductor cabins, based on the achievement of pre-defined

sales volumes.

Travel agent partners are an integral part of our long-term cruise distribution network and are critical to

our success. We utilize local sales teams to motivate travel agents to support our products and services with

competitive pricing, promotional policies and joint marketing and advertising programs. During 2023, no

group of travel agencies under common control accounted for 10% or more of our revenues. We also

employ a wide variety of educational programs, including websites, seminars and videos, to train agents on

our cruise brands and their products and services. In 2023, we held a variety of virtual and in-person trainings

and educational programs to continue to support and develop our travel agent partners, including ship

visits to familiarize our travel agent partners with our products and services.

All of our brands have internet booking engines to allow travel agents to book our cruises. Additionally, all

of our cruise brands have their own consumer websites that provide access to information about their products

and services to users and enable their guests to quickly and easily book cruises and other products and

services online. These sites interface with our brands’social networks, blogs and other social media sites,

which allow them to develop greater contact and interaction with their guests before, during and after their

cruise. We also employ vacation planners and onboard future cruise consultants who support our sales

initiatives by offering our guests one-on-one cruise planning expertise and other services.

XIII.

Supply Chain

To provide an exceptional cruise experience for our guests, we source significant quantities of goods and

services from a global supply base. In addition, we incur significant capital expenditures for materials to

support the refurbishment and enhancements of our vessels as well as to build new ships. We approach our

spend strategically and look for suppliers who demonstrate the ability to help us leverage our scale in terms of

cost, quality, service, innovation and sustainability. Our supply base is diverse and many of our business

partners provide goods and services across our portfolio of brands. We have continued to map our supply

chains and evaluate risks, including the categories of products and services sourced and their geographic

locations. To support this effort, we are members of Supplier Ethical Data Exchange, a leading ethical trade

organization, which supports businesses to operate ethically and sustainably and fight modern slavery.

We strive to build strong relationships with our suppliers and business partners. Our Business Partner Code

of Conduct and Ethics outlines our expectations and requirements for all our business partners. It also

highlights our commitments related to human rights and forced labor, respectful treatment and equal

opportunity, anti-corruption, environmental protection and sustainability.

Global supply markets and supply chains have been impacted by certain global events, resulting in shortages,

extended lead times and increased inflation impacting our operations and profitability. While we are

experiencing stabilization in a number of supply markets and some easing of inflation, we continue to apply

a number of different strategies to mitigate the impact of these challenges on our operations, including

extending our demand planning, placing purchase orders earlier to secure supply, leveraging our enterprise

scale through corporate-wide agreements, utilizing short-term or long-term contracts as needed, seeking

alternative sources, utilizing substitute products and leveraging our supplier relationships.

XIV.

Human Capital Management and Employees

Our shipboard and shoreside employees are sourced from approximately 150 countries. In 2023, we had an

average of 92,000 employees onboard our ships, excluding employees on leave. Our shoreside operations had

an annual average of 12,000 full-time and 2,000 part-time/seasonal employees. Holland America Princess

Alaska Tours significantly increases its work force during the late spring and summer months in connection

with Alaska’s cruise season.

We have entered into agreements with unions covering certain employees on our ships and in our shoreside

hotel and transportation operations. The percentages of our shipboard and shoreside employees that are

represented by collective bargaining agreements are 56% and 23%, respectively. We consider our employee

and union relationships to be strong.

A team of highly motivated and engaged employees is key to providing extraordinary cruise vacations. To

facilitate the recruitment, development and retention of our valuable employees, we strive to make Carnival

Corporation & plc a diverse, inclusive and safe workplace, with opportunities for our employees to grow

and develop in their careers.

Strategic Report

Talent Development

We believe in investing in our team members through the training and development of both shoreside and

shipboard team members. We leverage a combination of virtual and in-person training to ensure that our

teams are well-prepared to carry out their individual and collective responsibilities. For our shipboard

team members, our goal is to be a leader in delivering high quality professional maritime training, as

evidenced by the Arison Maritime Center. The Center is home to the Center for Simulator Maritime Training

(“CSMART”). The leading-edge CSMART Academy features the most advanced bridge and engine room

simulator technology and equipment available, with the capacity to provide annual professional training for

all our bridge, engineering and environmental officers. CSMART participants receive a maritime training

experience that fosters advanced knowledge and skills development, critical thinking and problem solving; all

in a professional learning environment where our corporate culture is reinforced. CSMART also offers

training related to liquefied natural gas (“LNG”) technology as well as an environmental officer training

program and additional environmental courses for bridge and engineering officers to further enhance our

training on environmental awareness and protection.

Succession Planning

Our Boards of Directors believe that planning for succession is an important function. Our multi-brand

structure enhances our succession planning process. We continually strive to foster the professional

development of management and team members. As a result, we have developed a very experienced and

strong group of leaders, with their performance subject to ongoing monitoring and evaluation, as potential

successors to our senior management, including our CEO.

Gender Diversity

Approximate Average for 2023 (a)

Female

Male

Shoreside Employees

...................................

8,000

6,000

Shipboard Employees

..................................

17,000

75,000

Total Employees

......................................

25,000

81,000

As of November 30, 2023

Female

Male

Boards of Directors (b)

.................................

Non-Director Senior Management and Company Secretary

........

Non-Director Senior Management and Company Secretary Direct

Reports

...........................................

(a)

These amounts are approximations and at times, fluctuate significantly; for example, Holland America

Princess Alaska Tours significantly increases its work force during the late spring and summer months

in connection with Alaska’s cruise season.

(b)

One member of the Boards of Directors preferred not to disclose.

XV.

Ethics and Compliance

We believe a strong ethics and compliance culture is imperative for the success of any company. Our

compliance framework includes a Global Ethics and Compliance (“Global E&C”) department, which is led

by our Chief Risk and Compliance Officer who leads the effort to promote and monitor a strong ethics

and compliance culture throughout the company. The main responsibilities of the Global E&C department

are to collaboratively:

• Identify, assess, monitor, prevent, detect and report on compliance risk

• Ensure compliance accountabilities and responsibilities are clear across the company

• Promote a strong culture of ethics and compliance

• Drive ethics and compliance continuous improvements

To further heighten the focus on ethics and compliance, our Boards of Directors have Compliance

Committees, which oversee the Global E&C department and maintain regular communications with our

Chief Risk and Compliance Officer. Refer to Item 3. Internal Control and Risk Assessment on page 51 for

additional details.

XVI.

Information Technology and Data Privacy

With the increasing size and sophistication of cruise ships, the technologies employed to enhance guest

experiences and operate ships have grown ever more complex and integrated. All our brands actively

collaborate to maximize the business value of our information technology solutions, standards and processes

to eliminate redundancies and drive process efficiencies, while increasingly leveraging our scale and common

technologies. In order to achieve our goals, we are focusing on several key factors including applications,

innovation, connectivity, infrastructure, modernization, cloud migration, cybersecurity, data privacy and

compliance. Our global information technology model is designed to positively contribute to our guests, crew,

shoreside team members and other stakeholders.

In response to the increasing threat of continuously evolving cybersecurity risks, we continue to invest in

our information technology and operational technology cybersecurity programs. We manage risk and protect

our company’s business operations through targeted people, process and technology-focused improvements,

including the implementation of data privacy and security focused training for our shoreside and select

shipboard team members. We have a Chief Information Security Officer who reports to the Chief Information

Officer and is responsible for leading global cybersecurity risk reduction efforts and compliance.

Protecting data and the privacy of personal information is of critical importance to our business. As a

company, we are entrusted with personal data belonging to our guests, team members and business partners.

In light of this and the numerous jurisdictional data privacy and security laws/regulations, we have data

privacy and security standards across the corporation. Our Chief Privacy Officer and Data Protection

Officers oversee our focus on the proper processing of personal information in alignment with our privacy

policy and applicable privacy laws and regulations.

Our Chief Information Officer and Chief Privacy Officer are responsible for risk management with respect

to information technology operations, cybersecurity and data privacy. In addition, the Audit Committees are

responsible for oversight of our risk management with respect to information technology operations and

cybersecurity while the Compliance Committees oversee risk management in the area of data privacy. Despite

our efforts with respect to information technology operations, cybersecurity and data privacy, we have

been, and may continue to be, impacted by breaches in data security and lapses in data privacy, which occur

from time to time. In 2023, the penalties and settlements paid in connection with cyber incidents were not

material.

XVII.

Insurance

General

We maintain insurance to cover a number of risks associated with owning and operating our vessels and

other non-ship related risks. All such insurance policies are subject to coverage limits, exclusions and deductible

levels. Insurance premiums are dependent on our own loss experience and the general premium requirements

of our insurers. We maintain certain levels of deductibles for substantially all the below-mentioned

coverages. We may increase our deductibles to mitigate future premium increases. We do not carry coverage

related to loss of earnings or revenues from our ships or other operations.

Protection and Indemnity (“P&I”) Coverages

Liabilities, costs and expenses for illness and injury to crew, guest injury, pollution and other third-party

claims in connection with our cruise activities are covered by our P&I clubs, which are mutual indemnity

associations owned by ship owners.

We are members of three P&I clubs, Gard, Steamship Mutual and UK Club, which are part of a worldwide

group of 12 P&I clubs, known as the International Group of P&I Clubs (the “IG”). The IG insures

directly, and through broad and established reinsurance markets, a large portion of the world’s shipping

fleets. Coverage is subject to the P&I clubs’rules and the limits of coverage are determined by the IG.

Hull and Machinery Insurance

We maintain insurance on the hull and machinery of each of our ships for reasonable amounts as determined

by management. The coverage for hull and machinery is provided by large and well-established international

marine insurers. Insurers make it a condition for insurance coverage that a ship be certified as “in class”

by a classification society that is a member of the International Association of Classification Societies

(“IACS”). All of our ships are routinely inspected and certified to be in class by an IACS member.

Strategic Report

War Risk Insurance

We use a combination of insurance and self-insurance to cover war risk for legal liability to crew, guests and

other third parties as well as loss or damage to our vessels arising from war or war-like actions. Our

primary war risk insurance coverage is provided by international marine insurers and our excess war risk

insurance is provided by our three P&I clubs. Under the terms of our war risk insurance coverage, which are

typical for war risk policies in the marine industry, insurers can give us no less than three days’notice that

the insurance policies will be canceled. However, the policies may be reinstated at different premium rates.

Other Insurance

We maintain property insurance covering our shoreside assets and casualty insurance covering liabilities to

third parties arising from our hotel and transportation business, shore excursion operations and shoreside

operations, including our port and related commercial facilities. We also maintain workers’compensation,

director’s and officer’s liability and other insurance coverages.

XVIII.

Taxation

A summary of our principal taxes and exemptions in the jurisdictions where our significant operations are

located is as follows:

U.S. Income Tax

We are primarily foreign corporations engaged in the business of operating cruise ships in international

transportation. We also own and operate, among other businesses, the U.S. hotel and transportation business

of Holland America Princess Alaska Tours through U.S. corporations.

Our North American cruise ship businesses and certain ship-owning subsidiaries are engaged in a trade or

business within the U.S. Depending on its itinerary, any particular ship may generate income from sources

within the U.S. We believe that our U.S. source income and the income of our ship-owning subsidiaries,

to the extent derived from, or incidental to, the international operation of a ship or ships, is currently exempt

from U.S. federal income and branch profit taxes.

Our domestic U.S. operations, principally the hotel and transportation business of Holland America

Princess Alaska Tours, are subject to federal and state income taxation in the U.S.

Application of Section 883 of the Internal Revenue Code

In general, under Section 883 of the Internal Revenue Code, certain non-U.S. corporations (such as our

North American cruise ship businesses) are not subject to U.S. federal income tax or branch profits tax on

U.S. source income derived from, or incidental to, the international operation of a ship or ships. Applicable

U.S. Treasury regulations provide in general that a foreign corporation will qualify for the benefits of

Section 883 if, in relevant part, (i) the foreign country in which the foreign corporation is organized grants

an equivalent exemption to corporations organized in the U.S. in respect of each category of shipping income

for which an exemption is being claimed under Section 883 (an “equivalent exemption jurisdiction”) and

(ii) the foreign corporation meets a defined publicly-traded corporation stock ownership test (the “publicly-

traded test”). Subsidiaries of foreign corporations that are organized in an equivalent exemption

jurisdiction and meet the publicly-traded test also benefit from Section 883. We believe that Panama is an

equivalent exemption jurisdiction and that Carnival Corporation currently satisfies the publicly-traded test

under the regulations. Accordingly, substantially all of Carnival Corporation’s income is exempt from U.S.

federal income and branch profit taxes.

Regulations under Section 883 list certain activities that the Internal Revenue Service (“IRS”) does not

consider to be incidental to the international operation of ships and, therefore, the income attributable to

such activities, to the extent such income is U.S. source, does not qualify for the Section 883 exemption.

Among the activities identified as not incidental are income from the sale of air transportation, transfers,

shore excursions and pre- and post-cruise land packages to the extent earned from sources within the U.S.

Exemption Under Applicable Income Tax Treaties

We believe that the U.S. source transportation income earned by Carnival plc and its subsidiaries currently

qualifies for exemption from U.S. federal income tax under applicable bilateral U.S. income tax treaties.

U.S. State Income Tax

Carnival Corporation, Carnival plc and certain subsidiaries are subject to various U.S. state income taxes

generally imposed on each state’s portion of the U.S. source income subject to U.S. federal income taxes.

However, the state of Alaska imposes an income tax on its allocated portion of the total income of our

companies doing business in Alaska and certain of their subsidiaries.

UK and Australian Income Tax

Cunard, P&O Cruises (UK) and P&O Cruises (Australia) are divisions of Carnival plc and have elected to

enter UK tonnage tax regime under a rolling ten-year term and, accordingly, reapply every year. Companies

to which the tonnage tax regime applies pay corporation taxes on profits calculated by reference to the net

tonnage of qualifying ships. UK corporation tax is not chargeable under the normal UK tax rules on these

brands’relevant shipping income. Relevant shipping income includes income from the operation of

qualifying ships and from shipping related activities.

For a company to be eligible for the regime, it must be subject to UK corporation tax and, among other

matters, operate qualifying ships that are strategically and commercially managed in the UK. Companies

within UK tonnage tax are also subject to a seafarer training requirement.

Our UK non-shipping activities that do not qualify under the UK tonnage tax regime remain subject to

normal UK corporation tax.

P&O Cruises (Australia) and all of the other cruise ships operated internationally by Carnival plc for the

cruise segment of the Australian vacation region are exempt from Australian corporation tax by virtue of the

UK/Australian income tax treaty.

Italian and German Income Tax

In 2015, Costa and AIDA re-elected to enter the Italian tonnage tax regime through 2024 and can reapply

for an additional 10-year period beginning in early 2025. Companies to which the tonnage tax regime applies

pay corporation taxes on shipping profits calculated by reference to the net tonnage of qualifying ships.

Most of Costa’s and AIDA’s earnings that are not eligible for taxation under the Italian tonnage tax regime

will be taxed at an effective tax rate of 4.8% in 2023 and 2022.

Substantially all of AIDA’s earnings are exempt from German income taxes by virtue of the Germany/Italy

income tax treaty.

Global Minimum Tax

In December 2021, the Organization for Economic Co-operation and Development (“OECD”) issued

Model Rules for implementation of a 15% minimum tax for multinational enterprises as part of its initiative

intended to address the tax challenges arising from globalization. A number of countries, including the

UK and EU member states, have agreed to adopt the OECD’s minimum tax rules and several countries,

including the UK, have already implemented these rules. The phased implementation of these rules could

affect us in 2026 with the potential for a one-year deferral. Prior to any mitigating actions, we believe the

annual impact could be approximately $200 million. We do not expect the application of these rules to have a

material impact on the Carnival plc Group financial statements. The application of the rules continues to

evolve, and its outcome may alter our tax obligations in certain countries in which we operate. We continue

to evaluate the impact of these rules and are currently evaluating a variety of mitigating actions to minimize

the impact.

Other

In addition to or in place of income taxes, virtually all jurisdictions where our ships call impose taxes, fees

and other charges based on guest counts, ship tonnage, passenger capacity or some other measure.

Strategic Report

XIX.

Governmental Regulations

Maritime Regulations

General

Our ships are regulated by numerous international, national, state and local laws, regulations, treaties and

other legal requirements, as well as voluntary agreements, which govern health, environmental, safety and

security matters in relation to our guests, crew and ships. These requirements change frequently, depending on

the itineraries of our ships and the ports and countries visited. If we violate or fail to comply with any of

these laws, regulations, treaties and other requirements, we could be fined or otherwise sanctioned by

regulators. We are committed to complying with, or exceeding, all relevant requirements.

The primary regulatory bodies that establish maritime laws and requirements applicable to our ships

include:

The International Maritime Organization (“IMO”):

All of our ships, and the maritime industry as a

whole, are subject to the maritime safety, security and environmental regulations established by the IMO,

a specialized agency of the United Nations. The IMO’s principal sets of requirements are mandated

through its International Convention for the Safety of Life at Sea (“SOLAS”), its International

Convention for the Prevention of Pollution from Ships (“MARPOL”) and its International Convention

on Standards of Training, Certification and Watchkeeping for Seafarers (“STCW”).

Flag States:

Our ships are registered, or flagged, in The Bahamas, Bermuda, Italy, the Netherlands,

Panama and the UK, which are also referred to as Flag States. Our ships are regulated by these Flag

States through international conventions that govern, among other things, health, environmental, safety

and security matters in relation to our guests, crew and ships. Representatives of each Flag State

conduct periodic inspections, surveys and audits to verify compliance with these requirements.

Ship classification societies:

Class certification is one of the necessary documents required for our ships

to be flagged in a specific country, obtain liability insurance and legally operate as passenger cruise

ships. Our ships are subject to periodic class surveys, including dry-dock inspections, by ship classification

societies to verify that our ships have been maintained in accordance with the rules of the classification

societies and that recommended repairs have been satisfactorily completed. Dry-dock frequency is a

statutory requirement mandated by SOLAS.

National, regional, and other authorities:

We are subject to the decrees, directives, regulations, and

requirements of the European Union (“EU”), the UK, the U.S., other countries, and many other

authorities, including ports that our ships visit.

Port regulatory authorities (Port State Control):

Our ships are also subject to inspection by the port

regulatory authorities, which are also referred to as Port State Control, in the various countries that they

visit. Such inspections include verification of compliance with the maritime safety, security,

environmental, customs, immigration, health and labor requirements applicable to each port, as well as

with regional, national and international requirements. Many countries have joined together to form

regional Port State Control authorities.

Our Boards of Directors have Health, Environment, Safety and Security (“HESS”) Committees, which

were comprised of five independent directors as of November 30, 2023. The principal function of the HESS

Committees is to assist the boards in fulfilling their responsibility to supervise and monitor our health,

environmental, safety, security and sustainability policies, programs and initiatives at sea and ashore and

compliance with related legal and regulatory requirements. The HESS Committees and our management

team review significant HESS relevant risks or exposures and associated mitigating actions.

We are committed to implementing appropriate measures to manage identified risks effectively. We have a

Chief Maritime Officer to oversee our global maritime operations, including maritime policy, maritime affairs,

maritime standards, training, shipbuilding, asset management, health operations, and research and

development. In addition, we have a Chief Risk and Compliance Officer who leads the effort to promote

and monitor a strong ethics and compliance culture throughout the company, including all areas of HESS.

To help ensure that we are compliant with legal and regulatory requirements and that these areas of our

business operate in an efficient and effective manner, we have taken certain actions including, but not limited

to:

• Providing regular health, environmental, safety and security support, training, guidance and

information to guests, team members and others working on our behalf

• Performing regular shoreside and shipboard audits and taking appropriate action when deficiencies

are identified

• Developing, reviewing, and working to improve policies and procedures designed to prevent, detect,

respond and correct various regulatory violations and other misconduct

• Supporting a comprehensive HESS incident investigation program that is designed to prevent re-

occurrence, promote learning, and support continuous improvement

Maritime Safety Regulations

The IMO has safety standards as part of SOLAS. To help ensure guest and crew safety, SOLAS establishes

requirements for the following:

• Vessel design and structural features

• Life-saving and other equipment

• Construction and materials

• Fire protection and detection

• Refurbishment standards

• Safe management and operation

• Radio communications

• Musters

All of our crew undergo regular safety training that meets or exceeds all international maritime regulations,

including SOLAS requirements, which are periodically revised. Additionally, we have implemented and

continue to develop policies and procedures that we believe enhance our commitment to the safety of our

guests and crew.

SOLAS requires implementation of the International Safety Management Code (“ISM Code”), which

provides an international standard for the safe management and operation of ships and for pollution

prevention. The ISM Code is mandatory for passenger vessel operators. Under the ISM Code, vessel operators

are required to:

• Develop and implement a Safety Management System (“SMS”) that includes, among other things,

the adoption of safety and environmental protection policies setting forth instructions and procedures

for operating vessels safely and describing procedures for responding to emergencies and protecting

the environment. In addition, our SMS includes health and security procedures

• Obtain a Document of Compliance (“DOC”) for the vessel operator, as well as a Safety Management

Certificate (“SMC”) for each vessel they operate. These documents are issued by the vessel’s Flag

State and evidence compliance with the ISM Code and the SMS

• Verify or renew DOCs and SMCs periodically in accordance with the ISM Code

All our ships are regularly audited by our various national authorities and we are required to maintain the

relevant certificates of compliance with the ISM Code.

Maritime Security Regulations

Our ships are subject to numerous security requirements. These requirements include the International Ship

and Port Facility Security Code, which is part of SOLAS, the U.S. Maritime Transportation Security Act

of 2002, which addresses U.S. port and waterway security and the U.S. Cruise Vessel Security and Safety Act

of 2010, which applies to all of our ships that embark or disembark passengers in the U.S. These regulations

include requirements as to the following:

• Implementation of specific security measures, including onboard installation of a ship security alert

system

• Assessment of vessel security

• Efforts to identify and deter security threats

• Training, drills and exercises

• Security plans that may include guest, vehicle and baggage screening procedures, security patrols,

establishment of restricted areas, personnel identification procedures, access control measures and

installation of surveillance equipment

• Establishment of procedures and policies for reporting and managing allegations of crimes

Strategic Report

Maritime Environmental Regulations

We are subject to numerous international, multi-national, national, state and local environmental laws,

regulations and treaties that govern air emissions, waste management, and the storage, handling, use and

disposal of hazardous substances such as chemicals, solvents and paints.

As a means of managing and improving our environmental performance and compliance, we adhere to

standards set by the International Organization for Standardization (“ISO”), an international standard-

setting body, which produces worldwide industrial and commercial standards. The environmental management

system of our company and ships is certified in accordance with ISO 14001, the environmental management

standard that was developed to help organizations manage the environmental impacts of their processes,

products and services.

International Regulations

The principal international convention governing marine pollution prevention and response is MARPOL.

Preventing and Minimizing Pollution

MARPOL includes six annexes, four of which are applicable to our cruise ships, containing requirements

designed to prevent and minimize both accidental and operational pollution by oil, sewage, garbage and air

emissions and the provision of facilities at ports and terminals for the reception of sewage and sets forth

specific requirements related to vessel operations, equipment, recordkeeping and reporting that are designed

to prevent and minimize pollution. All our ships must carry an International Oil Pollution Prevention

Certificate, an International Sewage Pollution Prevention Certificate, an International Air Pollution

Prevention Certificate and a Garbage Management Plan. Administrative, civil and criminal penalties may

be assessed for violations. The ship’s Flag State issues these certificates, which evidence their compliance with

the MARPOL regulations regarding prevention of pollution by oil, sewage, garbage and air emissions.

Certain jurisdictions have not adopted all of these MARPOL annexes but have established various national,

regional or local laws and regulations that apply to these areas.

MARPOL requires that discharges of machinery space bilge water pass through pollution prevention

equipment that separates oil from the water and monitors the discharged water to ensure that the effluent

does not exceed 15 parts per million oil content. Our ships have oily water separators with oil content monitors

installed and maintain a record of certain engine room operations in an Oil Record Book. In addition, we

have voluntarily installed redundant systems on all our ships that monitor processed bilge water a second time

prior to discharge to help ensure that it contains no more than 15 parts per million oil content. This

system also provides additional controls to prevent improper bilge water discharges. MARPOL also requires

that our ships have Shipboard Oil Pollution Emergency Plans.

Furthermore, MARPOL addresses air emissions from vessels, establishes requirements for the prevention of

air pollution from ships to reduce emissions of sulfur oxides (“SOx”), nitrogen oxides (“NOx”), particulate

matter and greenhouse gases (“GHG”) emissions. It also contains restrictions on the use of ozone depleting

substances (“ODS”) and requires the recording of ODS use, equipment containing ODS and the emission

of ODS.

Sulfur Emissions

The IMO adopted a global 0.5% sulfur cap for marine fuel which began in January 2020. The EU Parliament

and Council also adopted 0.5% sulfur content fuel requirement (the “EU Sulfur Directive”). The options

to comply with both the global 0.5% sulfur cap and the EU Sulfur Directive include the installation and use

of Advanced Air Quality Systems, or the use of low sulfur or alternative fuels.

MARPOL addresses air emissions from both auxiliary and main propulsion diesel engines on ships and

further specifies requirements for Emission Control Areas (“ECAs”) with stricter limitations on sulfur

emissions content in these areas, requiring ships to use fuel with a sulfur content of no more than 0.1%, or

to use alternative emission reduction methods, such as Advanced Air Quality Systems.

We have Advanced Air Quality Systems on most of our ships, which are aiding in partially mitigating the

financial impact from the ECAs and global sulfur requirements. We use Advanced Air Quality Systems

wherever possible subject to local laws and regulations. Additionally, Advanced Air Quality Systems used with

heavy fuel oil (“HFO”) result in as good or better SOx, NOx and particulate emissions compared to

marine gasoil (“MGO”).

Greenhouse Gas Emissions

The IMO has established technical and operational measures for all ships that are intended to improve

energy efficiency and reduce GHG emissions from international shipping. The technical measures apply to

the design of new vessels and the operational measures apply to all vessels.

The IMO mandates a data collection system (“DCS”) for reporting fuel oil consumption. The DCS requires

ships of 5,000 gross tons and above to provide fuel consumption data to their respective Flag State at the

end of each calendar year. Flag States validate the data and transfer it to a database and the IMO produces

a summary annual report. In January 2023, MARPOL changes in support of the IMO’s GHG emission

reduction goals went into effect and include an operational measure called the Carbon Intensity Indicator

(“CII”), an annual ship-level CO

intensity emissions performance measure, and a technical measure called

the Energy Efficiency Existing Ship Index (“EEXI”), a one-off measure similar to the Energy Efficiency

Design Index (“EEDI”) for newbuilds, that confirms for a specific condition that a ship meets a target

emission intensity. The EEXI has not had a material impact and the impact for CII is uncertain as the

enforcement mechanism of the regulation is still to be defined. In 2023, the IMO adopted its 2023 Strategy on

Reduction of GHG Emissions from Ships (“IMO Strategy”) that would require international shipping to

reduce total GHG emissions on a well-to-wake basis to net zero by or around 2050. In addition, the framework

introduces checkpoints in 2030 and 2040 that seek reductions in the absolute GHG emissions from

international shipping by at least 20% and 70%, respectively, compared to 2008. The IMO Strategy includes

a range of measures planned for implementation in 2027, including fuel standards and market-based

measures that could result in changes to itineraries or increased compliance related costs for which the

impact is uncertain and may individually and collectively have a material impact on our profitability.

Ballast Water

Ballast water is water used to stabilize ships at sea and maintain safe operating conditions throughout a

voyage. Ballast water can carry a multitude of marine species. The IMO’s Ballast Water Management

Convention governs the discharge of ballast water from ships and requires the installation of ballast water

management systems for existing ships. The convention also sets forth requirements for ballast water exchange,

record keeping, and maintaining an approved Ballast Water Management Plan. The Convention is designed

to regulate the treatment of ballast water prior to discharging overboard in order to avoid the transfer of

marine species to new environments, as well as establishing other ballast water management practices for

monitoring and environmental protection.

ii.

U.S. Federal and State Regulations

The Oil Pollution Act of 1990 (“OPA 90”) established a comprehensive federal liability regime, as well as

prevention and response requirements, relating to discharges of oil in U.S. waters. The major requirements

include demonstrating financial responsibility up to the liability limits set by OPA 90 and having oil spill

response plans in place. We have Certificates of Financial Responsibility (“COFR”) that demonstrate our

ability to meet the liability limits of OPA 90 and covers releases of hazardous materials. It is possible, however,

for our liability limits to be broken, which could expose us to unlimited liability. As OPA 90 expressly

allows coastal states to impose liabilities and requirements beyond those imposed under federal law, many

U.S. states have enacted laws more stringent than OPA 90. Some of these state laws impose unlimited liability

for oil spills and contain more stringent financial responsibility and contingency planning requirements.

Most coastal states have also enacted environmental regulations that impose strict liability for removal costs

and damages resulting from a discharge of oil or a release of a hazardous substance, similar to OPA 90.

The Clean Water Act (“CWA”) provides the U.S. Environmental Protection Agency (“EPA”) with the

authority to regulate incidental discharges from commercial vessels, including discharges of ballast water,

bilge water, gray water, anti-fouling paints and other substances during normal operations within the U.S.

three mile territorial sea and inland waters. Pursuant to the CWA authority, the U.S. National Pollutant

Discharge Elimination System was designed to minimize pollution within U.S. territorial waters. For our

affected ships, the incidental discharge requirements are set forth in EPA’s Vessel General Permit (“VGP”) for

discharges incidental to the normal operations of vessels. The VGP establishes effluent limits for specific

discharges incidental to the normal operation of a vessel, many of which apply to our cruise ships. In addition

to the requirements associated with these discharges and more stringent vessel-specific requirements, the

VGP includes requirements for inspections, monitoring, reporting and record-keeping. In 2018, the Vessel

Incidental Discharge Act (“VIDA”) was signed into law and was intended to clarify and streamline discharge

requirements for the incidental discharges covered by the VGP and certain U.S. Coast Guard (“USCG”)

regulations for ballast water.

Strategic Report

The state of Alaska requires permitting for certain discharges from cruise ships in designated Alaskan

waters. Further, the state of Alaska requires that certain discharges be reported and monitored to verify

compliance with standards and repeat violators of the regulations could be prohibited from operating in

Alaskan waters. Environmental regimes in Alaska are more stringent than the U.S. federal requirements with

regard to discharges from vessels. The state of California also has environmental requirements significantly

more stringent than federal requirements for water discharges and air emissions.

iii.

EU Regulations

The EU has adopted a broad range of substantial environmental measures aimed at improving the quality

of the environment. To support the implementation and enforcement of European environmental legislation,

the EU has adopted directives on environmental liability and enforcement and a recommendation providing

for minimum criteria for environmental inspections.

The European Commission’s (“EC”) strategy is to reduce emissions from ships. The EC strategy seeks to

implement SOx Emission Control Areas set out in MARPOL, as discussed above via their own Sulfur

Directive.

The EC has also implemented regulations aimed at reducing GHG emissions from maritime shipping

through a Monitoring, Reporting and Verification regulation, which involves collecting emissions data from

ships over 5,000 gross tons to monitor and report GHG emissions on all voyages to, from and between

European Union ports.

The EU adopted a series of significant reforms as a part of its Fit for 55 package to meet its 2030 emissions

reduction goal. The main instruments for reducing emissions are the Emissions Trading System (“ETS”),

FuelEU Maritime initiative and the Energy Taxation Directive (“ETD”) as well as amendments to the

alternative fuels infrastructure and renewable energy directives.

The ETS regulates emissions through a “cap and trade”principle, where a cap is set on the total amount of

certain emissions that can be emitted. The maritime shipping sector is included in the scope of ETS effective

January 2024 and requires ships to procure emission allowances covering 40% of their emissions inside EU

waters to be surrendered in 2025, 70% of 2025 emissions to be surrendered in 2026 and 100% of annual

emissions thereafter, to be surrendered in the following year.

The FuelEU Maritime initiative, which will be effective in January 2025, is a long-term framework to reduce

maritime emissions by increasing the use of sustainable alternative fuels and, for the cruise industry, the

use of shore power. The initiative requires compliance with the maximum limits of GHG intensity of energy

used on board. The stringency of these limits increases over time, and there are financial penalties for

non-compliance. The initiative also includes requirements for ships to connect to shore power when at EU

ports.

The ETD is a framework for the taxation of energy products and sets minimum rates of excise duty to

encourage a low carbon economy. Proposed amendments to the ETD will introduce new tax rates based on

the energy content and environmental impact rather than volume. If adopted, these amendments will also

widen the directive to include maritime fuels, which were previously exempt. To date, there is no timeline for

adoption of these amendments.

We estimate the 2024 impact of the ETS regulations to be approximately $51 million, based on a European

Union Allowance cost of $75 per metric ton of emissions. The exact impact of the Fit for 55 regulations is

uncertain as elements of the proposals have not yet been finalized and enacted and will depend on future

deployments.

Maritime Health Regulations

We are committed to providing a healthy environment for all of our guests and crew. We collaborate with

public health inspection programs throughout the world, such as the Centers for Disease Control and

Prevention (“CDC”) in the U.S. and the SHIPSAN Project in the EU, to ensure that development of these

programs leads to enhanced health and hygiene onboard our ships. Through our collaborative efforts, we work

with the authorities to develop and revise guidelines, review plans and conduct on-site inspections for all

newbuilds and significant ship renovations. We work closely with governments and health authorities around

the world to ensure that our health and safety protocols comply with the requirements of each location. In

addition, we continue to maintain our ships by meeting, and often exceeding, applicable public health

guidelines and requirements, complying with inspections, reporting communicable illnesses and conducting

regular crew training and guest education programs.

Maritime Labor Regulations

The International Labor Organization develops and oversees international labor standards and includes a

broad range of requirements, such as the definition of a seafarer, minimum age of seafarers, medical

certificates, recruitment practices, training, repatriation, food, recreational facilities, health and welfare,

hours of work and rest, accommodations, wages and entitlements.

The STCW, as amended, establishes additional minimum standards relating to training, including security

training, certification and watchkeeping for our seafarers.

Other Governmental Regulations

Compliance with GHG regulations and the associated potential cost is complicated by the fact that various

countries and regions are following different approaches to climate-related regulations.

In most countries where we source the majority of our guests, we are required to establish financial

responsibility, such as obtaining a guarantee from stable financial institutions and insurance companies, to

satisfy liability in cases of our non-performance of obligations to our guests. The amount of financial

responsibility varies by jurisdiction based on the amount mandated by the applicable local legislation,

regulatory agency or association.

In Australia and most of Europe, we may be obligated to honor our guests’cruise payments made by them

to their travel agents and tour operators regardless of whether we receive these payments.

In addition, the UK plans to include domestic shipping under its national ETS beginning in January 2026.

To date, they have not defined if the domestic legs or port calls of ships engaged in international voyages will

be included.

We are, or may in the future become, subject to other laws and regulations which require our compliance,

including those addressing antitrust, anti-money laundering, bribery, corruption, data privacy, human rights,

securities and sanctions, reporting on sustainability matters, as well as human resources related matters.

XX.

Sustainability and Environmental Impact

We strive to be a company that people want to work for and to be an exemplary global corporate citizen.

Our commitment and actions to keep our guests and crew members safe and well, protect the environment,

develop and provide opportunities for our workforce, strengthen stakeholder relations and enhance both

the communities where we work as well as the port communities that our ships visit, are reflective of our

brands’ core values and vital to our success.

In 2021, we established goals for 2030 which incorporate six focus areas listed below that align with

elements of the United Nation’s Sustainable Development Goals and build on the momentum of our

successful achievement of our 2020 sustainability goals.

Strategic Report

Sustainability Goals Progress

The tables below represent our progress through November 30, 2023 in each of our six focus areas and

associated goals:

2030 Climate Action Goals

Status (a)

Our Progress

Achieve 20% GHG intensity reduction

relative to our 2019 baseline measured in

both grams of CO

e per ALB-km and

kilograms of CO

e per ALBD

Accelerated

• Accelerated the expected achievement of

this goal by four years to 2026

• Achieved 14.0% GHG intensity reduction

on an ALB-km basis relative to 2019 and

35.4% relative to 2008

• Achieved 14.1% GHG intensity reduction

on an ALBD basis relative to 2019 and

39.3% relative to 2008

Reduce absolute particulate matter air

emissions by 50% relative to our 2015

baseline

Achieved

Increase fleet shore power connection

capability to 60% of the fleet

Achieved

64% of the fleet has shore power connection

capability, up from 57% in 2022 and 46% in

2021

Expand our LNG program

Ongoing

Eight LNG ships in operation, representing

16% of fleet capacity, and three more on

order

Optimize the reach and performance of our

Advanced Air Quality System program

Ongoing

93% of the fleet has Advanced Air Quality

Systems installed (b)

Expand battery, fuel cell and biofuel

capabilities

Ongoing

Successfully piloted the use of biofuels as a

replacement for fossil fuel on one ship in

2023 and two ships in 2022

Reduce Scope 3 (indirect) emissions

associated with food procurement and waste

management

Ongoing

Food and waste management Scope 3

emission estimates were similar to the 2019

base year

Identify carbon offset options only when

energy efficiency options have been

exhausted

Ongoing

Continuing to monitor the carbon offset

market and other alternatives

2030 Circular Economy Goals

Status (a)

Our Progress

Achieve 50% single-use plastic item

reduction in 2021

Achieved

Removed hundreds of millions of single-

use plastic items from the fleet

Achieve 30% unit food waste reduction by

2022, 40% by 2025 and 50% by 2030

Achieved/

On Track

• Achieved our 2022 goal

• 2025 and 2030 goals on track, as we

delivered a 38% unit food waste

reduction in 2023

Increase Advanced Waste Water Treatment

System coverage to >75% of our fleet

capacity

On Track

Achieved 70% coverage of fleet capacity

and 70% of ships

Send a larger percentage of waste to

waste-to-energy facilities where practical

Ongoing

Partner with primary vendors to reduce

upstream packaging volumes

Ongoing

Achieved an approximately 50% reduction

in plastic-based packaging materials with

one primary vendor since 2022

2030 Good Health and Well-Being Goals

Status (a)

Our Progress

Committed to continued job creation

Ongoing

Continued to open and fill a number of

shoreside positions

Establish measurable Company Culture

metrics and set annual improvement targets

Ongoing

Completed annual culture survey for our

shipboard and shoreside employees and

began tracking associated metrics

Implement global well-being standards by

2023

Achieved

Implemented shipboard employee well-being

standards, including preventive health offers,

such as vaccination protection and the

prevention and detection of mental illnesses,

among other benefits

Reduce the number of guest and crew

work-related injuries

Ongoing

Continued to implement and monitor

impact of initiatives to prevent guest and

crew injuries

2030 Sustainable Tourism Goals

Status (a)

Our Progress

Animal Welfare – responsible sourcing

• Achieve 100% cage free eggs by the end of

2025

• Achieve 100% responsible chicken

sourcing by the end of 2025

• Achieve 100% gestation crate-free pork by

the end of 2025

On Track

Continued to work with our supply chain

and met our glidepath targets for fiscal year

2023 – sourced 55% cage free eggs, 34%

responsible chicken and 40% gestation

crate-free pork purchases

Establish partnerships with destinations

focused on sustainable economic

development, preservation of local

traditions, and capacity management

Ongoing

• Continued construction on a new cruise

port destination, Celebration Key, on

Grand Bahama Island which is expected

to open in 2025. Celebration Key will

provide business opportunities for the

residents of Grand Bahama with an

estimated 1,000 local jobs

• Continued to support the Alaskan region

through community projects and the

Alaska Green Corridor partnership to

explore methods to accelerate the

reduction of GHG emissions

• Continued to support our community

efforts in the Caribbean through

educational ship tour programs,

celebratory events and community

volunteerism

Continue to support disaster resilience,

relief, and recovery efforts

Ongoing

• Donated to Direct Relief to fund relief

efforts in Hawaii after the devastating

wildfires

• Supported disaster relief efforts in

Acapulco after hurricane Otis

Strategic Report

2030 Sustainable Tourism Goals

Status (a)

Our Progress

Build stronger community relationships in

our employment bases and destinations via

employee volunteering programs

Ongoing

• Conducted multiple coastal cleanups

involving shipboard- and shoreside

employees and partners in various

locations around the world

• Costa Cruises continued with its program

donating meals to those who need them

the most in local communities

• AIDA Cruises continued with its

initiatives to provide sustainable support

to local communities through the

construction of new school facilities,

providing numerous children with access

to education

2030 Biodiversity and Conservation Goals

Status (a)

Our Progress

Support biodiversity and conservation

initiatives through select NGO partnerships

Ongoing

• Completed efforts to support Giglio

Island’s marine biodiversity

• Engaged with several NGOs on potential

partnership opportunities

Conduct audits and monitor animal

encounter excursions regularly

Ongoing

Continued audit and monitoring program

2030 Diversity, Equity and Inclusion Goals

Status (a)

Our Progress

Ensure our overall shipboard and shoreside

employee base reflects the diversity of the

world

Ongoing

• Continued to employ shipboard crew

members from approximately 150

countries around the world

• Our CEO signed the CEO Action for

Diversity & Inclusion pledge

Expand shipboard and shoreside diversity,

equity, and inclusion across all ranks and

departments

Ongoing

• Our company was recognized with several

top employer awards more broadly for

advancing diversity, equity and inclusion

in the workplace

• Launched the employee resource group

Women Officer Network

• Re-joined the International LGBTQ+

Travel Association

(a)

Accelerated — Quantifiable/numerical goals whose timeline has been moved forward.

On Track — Quantifiable/numerical goals that are showing a positive trend towards achieving the goal.

Ongoing — Qualitative/non-numerical goals which are currently in progress.

(b)

Excluding LNG ships.

A key focus of our sustainability efforts is climate action, therefore, we have developed a four-part strategy

to help us achieve our GHG intensity goals:

• Fleet optimization: delivering larger, more efficient ships as part of our ongoing newbuild program,

some of which may replace existing ships in our fleet

• Energy efficiency: continuing to improve our existing fleet’s energy efficiency through investment in

projects such as service power packages, air lubrication systems and expanding shore power capabilities

• Itinerary efficiency: designing more energy-efficient itineraries, focusing on operational execution

and investing in port and destination projects in strategic locations

• New technologies and alternative fuels: investing in a first-of-its-kind lithium-ion battery storage

system and assessing carbon capture and storage. We also support the adaptation of alternative fuels

including biofuels such as methanol, which we are assessing as a future low GHG emission fuel

option for our ships

Refer to Note 2 — “Significant Accounting Policies”for additional information on how climate change has

been considered in our financial statements.

In addition to our 2030 sustainability goals, we are committed to continuing our reduction of GHG

emissions. Our absolute GHG emissions peaked in 2011 and since that time we have decreased our emissions

(on a tank-to-wake basis) by over 10%, despite capacity growth of 30% over the same period. Additionally,

we are pursuing net zero emissions by 2050, aligned with the revised IMO Strategy. Achieving this goal will

require energy sources and technologies that do not yet exist. While fossil fuels are currently the only

scalable and commercially viable option for our industry, we are closely monitoring technology developments

and pioneering important sustainability initiatives in the cruise industry. We have partnered with companies,

universities, research bodies, non-governmental organizations, and other key organizations to help identify

and scale new technologies not yet ready for the cruise industry. For example, we are piloting maritime scale

battery technology, working with classification societies and other stakeholders to assess lower GHG

emission fuel options for cruise ships and assessing carbon capture and storage technologies. We have

successfully piloted the use of biofuel as a replacement for fossil fuel on three ships. The certified biofuels

used in these pilots offer environmental benefits compared to using fossil fuels alone through their lifecycle

GHG reductions. These biofuels can be used in existing ship engines without modifications to the engine or

fuel infrastructure, including on ships already in service. To provide a path to net zero emissions, alternative

low GHG emission fuels will be necessary for the maritime industry; however, there are significant supply

challenges that must be resolved before viability is reached.

We continue to make progress on the implementation of Service Power Packages, a comprehensive set of

technology upgrades, which will be implemented over the next several years across a portion of the fleet.

These upgrades include the following elements designed to reduce both fuel usage and GHG emissions while

also contributing to cost savings:

• Comprehensive upgrades to each ship’s hotel HVAC systems

• Technical systems upgrades on each ship

• State-of-the-art LED lighting systems

• Remote monitoring and optimization of energy usage and performance

The Service Power Package upgrades are part of our ongoing energy efficiency investment program and are

expected to further improve energy savings and reduce fuel consumption. Upon completion, these upgrades

are expected to deliver an average of 5-10% fuel savings per ship.

We have nine Air Lubrication Systems (“ALS”) currently operating in our fleet and have additional

installations in progress and planned for the future. ALS cushion the flat bottom of a ship’s hull with air

bubbles, which reduces the ship’s frictional resistance and the propulsive power required to drive the ship

through the water, which generate approximately 5% savings in fuel consumption for propulsion and

reductions in GHG emissions on ALS equipped ships when operating in a specific speed range.

We have eight LNG powered cruise ships in operation as of November 30, 2023 and three that are expected

to join the fleet through 2025. In total, these 11 ships are expected to represent over 20% of our total

future capacity by summer 2025. All our LNG ships also have the capability to run on MGO and bio-LNG.

Strategic Report

While LNG is a fossil fuel and generates GHG emissions, its direct CO

emissions are lower than those of

conventional fuels and it emits effectively zero sulfur oxides (only the sulfur in the pilot fuel is present),

reducing nitrogen oxides by 85% and particulate matter by 95%-100%. Both on a tank-to-wake and well-to-

wake basis when measured using the scientifically accepted 100-year global warming potential (“GWP”)

time frame, LNG has lower overall GHG emissions than conventional fuels and in the absence of market-

ready zero-emission fuels, is currently the best readily available fuel to help reduce ship GHG emissions now.

The types of engines that we use are subject to small amounts of methane slip (the passage of un-

combusted methane through the engine). There are different views relating to the measurement of the

environmental impact of LNG, including the methane slip. Our disclosures report our emissions, including

methane slip, as part of our total GHG emissions (reported as CO

e) using the 100-year GWP and are

measured on a tank-to-wake basis. We are working closely with our engine manufacturers and other

technology providers to further mitigate methane slip and we are part of the Methane Abatement in Maritime

Innovation Initiative (“MAMII”), where we are partnering with other major maritime players to seek

solutions for this challenge. We are also evaluating options to remove unburnt methane from exhaust streams.

We pioneered the use of Advanced Air Quality Systems on board our ships to aid in the reduction of

sulfur and are promoting the use of shore power. Shore power enables our ships to use shoreside electric

power, where available, while in port rather than running their engines to power their onboard services,

resulting in reduced engine emissions and noise in port. We now lead the industry in ships capable of plugging

into shore power with twice as many ships ready to plug in as there are ports able to provide shore power.

Nearly two-thirds of our ships are equipped with this capability, and that number will increase over time as

more ports provide shore power. We have continued our work with several local port authorities to utilize

cruise ship shore power connections.

We have considered the above planned strategy in connection with the preparation of our financial statements

and any estimates used in the preparation of our financial statements.

We have voluntarily reported our GHG footprint via the CDP each year since 2006. The CDP rates

companies on the depth and scope of their disclosures and the quality of their reporting. Our submission

includes details of our most recently compiled emissions data and reduction efforts, along with the results of

an independent, third-party verification of our GHG emissions. We also disclose our holistic water

stewardship to use less, reuse more and clean as well as purify used water to return to nature through the

CDP water program.

Carnival Corporation & plc’s GHG emissions inventory management plan follows the guidance in The

Greenhouse Gas Protocol and ISO 14064-1:2018 and our environmental management system is certified in

accordance with the ISO 14001:2015 Environmental Management System standard.

We voluntarily publish Sustainability Reports that address governance, stakeholder engagement,

environmental, labor, human rights, society, product responsibility, economic and other sustainability-

related issues and performance indicators. These reports are not incorporated in this document and can be

viewed at www.carnivalcorp.com, www.carnivalplc.com and www.carnivalsustainability.com.

Summary of our Environmental Impact

Our direct (Scope 1), indirect (Scope 2) and indirect value chain (Scope 3) GHG emissions are quantified

and reported. Additionally, limited assurance is provided on our GHG emissions by an independent third

party. Our fiscal year 2023 direct GHG emissions, which are largely generated from our ships, represented

over 99% of our total Scope 1 and 2 emissions.

Unit

Global

Emissions

2023

Global

Emissions

2022

Global

Emissions

2021

Emissions

2023

Emissions

2022

Emissions

2021

GHG Emissions

(in thousands)

Scope 1 – Direct GHG

Emissions

..............

Metric Tons

9,610

8,539

4,409

1,179

1,027

480

Scope 2 – Indirect GHG

Emissions – Location based . .

Metric Tons

Total GHG Emissions

(Scope 1&2) – Location based

Metric Tons

9,648

8,582

4,438

1,180

1,028

481

Energy Consumption

(in millions)

Scope 1 – Energy

Consumption

...........

Kwh

34,961

30,853

15,752

4,383

3,733

1,721

Scope 2 – Energy

Consumption

...........

Kwh

107

Total Energy Consumption

(Scope 1&2)

............

Kwh

35,068

30,960

15,834

4,387

3,736

1,723

Intensity Ratio

...........

Grams of

ALB-Km

211

241

330

217

267

385

Intensity Ratio

...........

Kilograms of

ALBD

103

115

(a)

106

123

(a)

Intensity ratio measured in kilograms of CO

e per ALBD for 2021 is not meaningful due to the

resumption of guest cruise operations.

Data for 2022 and 2021 is not representative of a full year of operations.

Strategic Report

In 2022, we performed a baseline inventory of our 2019 Scope 3 GHG emissions following the Greenhouse

Gas Protocol and ISO 14064-1:2018 guidance. In 2023, we performed an inventory of our Scope 3 GHG

emissions for the 12-month period from June 1, 2022 to May 31, 2023. The period used for conducting our

annual Scope 3 GHG emissions inventory provides sufficient time to collect and consolidate the large amount

of activity-based data needed to complete the inventory and report the results in our Annual Report. Due

to the retirement of an emission factor database hosted by the Greenhouse Gas Protocol in August 2023 and

our desire to compare our Scope 3 GHG emission inventories over time, we needed to recalculate our 2019

baseline inventory using a consistent set of emission factors. We replaced the Greenhouse Gas Protocol

emission factor database with the U.S. EPA Supply Chain Greenhouse Gas emission factors v1.2. We

determined that our Scope 3 emissions were estimated to be around 40% of our total emissions. Our

recalculated baseline Scope 3 emissions inventory was 8% lower than the initial baseline calculations. It is

important to note that because Scope 3 emissions relate to other organizations’ emissions and there are a wide

range of emission factor databases to choose from, these estimates are subject to numerous uncertainties.

Global Greenhouse Gas (GHG) Scope 3 Emissions

In thousands

Unit

2023/2022(a)

2019

Total Scope 3 GHG emissions

.................

MTCO2e

7,562

9,738

Cat. 1 Purchased goods and services

.............

MTCO2e

3,942

5,225

Cat. 2 Capital goods

........................

MTCO2e

705

1,030

Cat. 3 Fuel- and energy-related activities

..........

MTCO2e

1,751

1,945

Cat. 4 Upstream transportation and distribution

.....

MTCO2e

179

165

Cat. 5 Waste generated in operations

.............

MTCO2e

Cat. 6 Business travel

........................

MTCO2e

Cat. 7 Employee commuting

...................

MTCO2e

650

885

Cat. 8 Upstream leased assets

..................

MTCO2e

N/A

Cat. 9 Downstream transportation and distribution

Cat. 10 Processing of sold products

Cat. 11 Use of sold products

..................

MTCO2e

186

283

Cat. 12 End-of-life treatment of sold products

......

MTCO2e

N/A

Cat. 13 Downstream leased assets

Cat. 14 Franchises

Cat. 15 Investments

.........................

MTCO2e

(a)

Our Scope 3 emissions were calculated using the 12-month period from June 1, 2022 – May 31, 2023.

GHG emissions data collection and calculations were performed in accordance with our GHG emissions

inventory management plan. Ship fuel emissions represent over 97% of our total Scope 1 and 2 emissions and

approximately 55% of our total emissions.

Scope 1 emissions include direct emissions from the combustion of ship fuel, inadvertent release of ship

refrigerants, and other direct emissions generated by sources owned or controlled by Carnival Corporation &

plc (global number as per above table) as well as ships operated and facilities owned and leased by our UK-

based and marketed brands — P&O Cruises (UK number as per above table) and Cunard (UK number

as per above table).

Scope 2 emissions include emissions from the consumption of electricity for facilities and ships as well as

heat or steam purchased by sources owned or controlled by Carnival Corporation & plc (global number as

per above table) as well as ships operated and facilities owned and leased by our UK-based and marketed

brands — P&O Cruises (UK) and Cunard (UK number as per above table).

Scope 3 emissions include emissions that occur in the value chain of Carnival Corporation & plc. Scope 3

emissions were estimated using supplier and activity-based data, where available (e.g., city-pair flight data,

food and beverage physical units purchased, waste volumes and fuel consumption and shipbuilder-reported

emissions). Several emission factor databases were used in the estimation, including DEFRA, Sphera Life

Cycle Inventory (LCI) factors, and the U.S. EPA Supply chain GHG Emission Factors v1.2 (with margins).

Spend-based emission factors were adjusted for inflation as needed. Our estimation is conducted at the

corporate, not country level. Given the number of assumptions required to estimate Scope 3 emissions, it is

reasonable to assume that the ratio of our UK Emissions to our Global Emissions is comparable.

We measure and report the ship fuel GHG emission rate in terms of grams of CO

e per ALB-Km and

kilograms of CO

e per ALBD. These indicators enable us to make meaningful GHG emission reduction

comparisons that take into account changes in fleet size, itineraries and passenger capacity during normal

operations. The CO

e/ALBD metric is a better indicator of our progress on absolute emissions reduction.

In addition to GHG emissions, we also monitor various other environmental metrics to assess our impact and

track our performance over time.

Other Environmental Impact Metrics

(in thousands, except percentages)

Unit

2023

2022

2021

Water Consumption

................................

Metric Tons

23,907

17,867

5,730

Wastewater

......................................

Metric Tons

23,687

17,395

5,437

Waste Disposal

...................................

Metric Tons

284

231

122

Percent of Waste Recycled

............................

Percent

29.0%

30.2%

35.8%

Data for 2022 and 2021 is not representative of a full year of operations.

Climate-Related Financial Disclosures

Under the UK Listing Rule LR 9.8.6R, which is mandatory for Carnival plc, we set out below our climate-

related financial disclosures fully consistent with the Task Force on Climate-Related Financial Disclosures

(“TCFD”) Recommendations and Recommended disclosures, taking into account guidance published by

the TCFD including the Guidance for All Sectors. Our consistency with the TCFD’s four pillars, Governance,

Strategy, Risk Management and Metrics and Targets, and the recommendations thereof, are represented in

the table below.

TCFD Pillar

Recommended disclosures

Section Reference

Governance

a) Describe the Boards’ oversight

of climate-related risks and

opportunities.

Governance

b) Describe management’s role in

assessing and managing climate-

related risks and opportunities.

Strategy

a) Describe the climate-related

risks and opportunities the

organisation has identified over

the short, medium, and long

term.

Strategy: Qualitative scenario

analysis

b) Describe the impact of

climate-related risks and

opportunities on the

organisation’s businesses,

strategy, and financial planning.

Strategy: Quantitative Scenario

Analysis

c) Describe the resilience of the

organisation’s strategy, taking

into consideration different

climate-related scenarios,

including a 2°C or lower

scenario.

Strategic Report

TCFD Pillar

Recommended disclosures

Section Reference

Risk Management

a) Describe the organisation’s

processes for identifying and

assessing climate-related risks.

Risk Management: Climate Risk

and Opportunity Identification,

Owner Assignment and

Assessment

b) Describe the organisation’s

processes for managing climate-

related risks.

Risk Management: Climate Risk

and Opportunity Monitoring,

Management and Reporting

c) Describe how processes for

identifying, assessing, and

managing climate-related risks

are integrated into the

organisation’s overall risk

management.

Risk Management: Integration

into our overall risk management

Metrics and Targets

a) Disclose the metrics used by

the organisation to assess

climate-related risks and

opportunities in line with its

strategy and risk management

process.

Metrics and Targets

b) Disclose Scope 1, Scope 2,

and, if appropriate, Scope 3

GHG emissions, and the related

risks.

c) Describe the targets used by

the organisation to manage

climate-related risks and

opportunities and performance

against targets.

Governance

The Chief Climate Officer (“CCO”) and the Boards of Directors are responsible for the oversight of climate-

related matters and are directly supported by members of executive management. In addition, the CCO

and the Boards of Directors set the tone at the top with regards to embedding a climate risk culture through

fulfilling their responsibilities as outlined in the climate risk management framework. The CCO leads the

identification of climate-related risks and opportunities and oversees how these are embedded in our strategic

decision-making and risk management processes (see page 36).

To further support our climate-related efforts, we created a Strategic Risk Evaluation (“SRE”) Committee

in 2022. The SRE Committee consists of members of executive management and an advisor and reports to

the CEO and CCO, who in turn, reports to the Boards of Directors. As of November 30, 2023, the SRE

Committee was comprised of the following:

• Josh Weinstein — President, Chief Executive Officer and Chief Climate Officer

• David Bernstein — Chief Financial Officer and Chief Accounting Officer (Chair of SRE Committee)

• William Burke — Chief Maritime Officer

• Richard Brilliant — Chief Risk and Compliance Officer

• Jan Swartz — Executive Vice President of Strategic Operations (appointed to the SRE Committee in

October 2023)

• Stein Kruse — Advisor to the CEO & Chair of the Boards

The primary responsibility of the SRE Committee is to assist the CCO in fulfilling his responsibility to

identify, monitor and review the management of climate-related risks and opportunities. The diagram below

sets out the function of the SRE Committee and illustrates the interaction between the Boards of Directors,

executive management and the SRE Committee. Common recurring activities of the SRE Committee include:

• Discussing climate considerations in the planning processes to further support its focus on reducing

GHG emissions

• Considering if any new climate risks or opportunities should be included in the list of identified

climate risks and opportunities

• Ensuring appropriate assignment of identified climate risks and opportunities to risk owners, who

are responsible for their day-to-day evaluation and management

• Obtaining at least annual reporting from the risk owners on the monitoring and management of

identified risks and opportunities and reviewing, scrutinizing and challenging management of climate-

related risks and opportunities

• Tracking of energy efficiency spend and progress on the installation of Service Power Packages

• Monitoring progress against our 2030 Climate Action Goals

• Reviewing and approving the climate risk management framework

• Reviewing and approving the SRE Committee charter

The SRE Committee meets at least once a quarter and in 2023, five SRE Committee meetings were held.

From these discussions, the SRE Committee has provided a quarterly update to the Boards of Directors on

climate-related matters such as:

• Additional costs that will be included in the strategic, capital, itinerary and other long-term Plans

• Updates from risk owners on the monitoring and management of identified risks and opportunities

for all of our monitored risks

• Updates on evolving regulations

• Results of our Scope 3 emissions quantification

Role

Boards of Directors

Compensation

Compliance

Health,

Environmental,

Safety & Security

Ultimate oversight of climate-related

risks and opportunities

Committees responsible for

oversight of relevant aspects

of risks and opportunities

which may include climate

related issues

Assist in identifying,

monitoring and reviewing

climate-related risks and

opportunities

Lead integration of

climate into key

business functions

Support integration of

climate-related oversight

and management

Audit

Nominating &

Governance

Strategic Risk Evaluation Committee (SRE)

Executive Management

Management

Climate Risk Owners

CEO and

CCO

Management

Boards

Climate-Related Function

Board Education Program

To enable the CCO and Boards of Directors to fulfil their responsibility to oversee climate-related risks and

opportunities, a Board sustainability and TCFD education program was established in 2022, with core

education components and optional self-study courses. This sustainability and TCFD education program

was developed with support from external advisors and the Senior Independent Director. The core education

components of the program were completed in November 2022. A refresher education program, including

updates to sustainability and TCFD considerations was performed in February 2023.

Strategic Report

Strategy

Risks and opportunities are reviewed and developed as part of our climate risk management framework

described below. In 2022, we performed a qualitative and quantitative scenario analysis to assess our climate-

related risks and opportunities over the short, medium and long-term. The qualitative and quantitative

scenario analysis were reviewed by the SRE Committee in 2023 and no changes were identified.

Qualitative scenario analysis

In 2022, we qualitatively applied two (and quantitatively applied three) distinct plausible climate scenarios,

global warming limited to below 1.5

C above pre-industrial levels by 2100 “Steady Path to Sustainability” and

global warming of 2.8

C above pre-industrial levels by 2100 “Regional Rivalry.” The scenarios were used

to generate the climate-related risks and opportunities listed in the table below.

As part of our qualitative scenario analysis, a series of workshops with the SRE Committee and a cross-

section of management was conducted to identify material climate-related risks and opportunities, based on

likelihood and degree of potential financial impact, over the following time horizons:

• Present – 2025 (short-term) — consistent with our internal forecasting

• 2025 – 2035 (medium-term) — aligns with our existing sustainability goals

• 2035 – 2050 (long-term) — consistent with the useful life of our ships

Following the workshops, the SRE Committee selected certain risks and opportunities for further assessment

and quantification. The process of selecting these risks and opportunities included an in-depth assessment

by each participant of the proposed risks and opportunities. The process incorporated the use of a feasibility

matrix and subsequent group discussion to arrive at consensus on which risks and opportunities were most

appropriate for quantification. Feasibility was evaluated on the availability of internal and external climate-

related data, the estimated number of assumptions required and the magnitude of impact and likelihood

of occurrence.

Climate-related risks identified through qualitative scenario analysis

Our initial selected risks and opportunities for quantification are in

bold

TCFD risk categories

Risk summary

Impact time horizon

Markets and Products / Shifting

Markets (1)

Cruising no longer aligns to

consumers’ climate values

Medium Term

Reduced availability and access to

fuel*

Medium Term

Unable to meet climate-related

requirements reduces access to

capital / insurance

Medium Term

Policy and Legal (1)

Increased costs driven by

climate-related regulations*

Short-Medium Term

Risk is that cruising (as a

high-GHG emissions industry) is

severely restricted or subject to

bans

Medium Term

Reputation (1)

Failure to attract and retain

talent due to climate credentials

Medium Term

Increased demand for reducing

GHG emission practices

Medium Term

Technology (1)

Lack of viable low GHG

emission technology to replace

fossil fuels

Medium Term

Physical

Chronic climate change impacting

supply chain availability and price

Medium Term with expected

increases in the Long Term

Itineraries are not viable due to

extreme weather and/or sea level

rise

Medium Term with expected

increases in the Long Term

(1)

Transition Risks

Due to the similar nature of these risks, we have combined them for the quantitative analysis into a

combined risk: “How does a transition to a low-GHG emissions future impact the price of the fuels needed

to power our ship engines?”

Strategic Report

Climate-related opportunities identified through qualitative scenario analysis

TCFD opportunity categories

Opportunity summary

Realisation time horizon

Energy Source

Support the adaptation of

sustainable technological

advances for the cruise industry

Medium Term

Market Access

Access to new financing options

available for organisations

working on a low-GHG emission

future

Short-Medium Term

Access to private destinations or

islands with infrastructure built

by us

Short-Medium Term

Attract and retain new customers

and improve reputation through

sustainable itineraries and

activities for changing climate-

induced preferences

Short-Medium Term

Positioning as a sustainability

leader

Short-Medium Term

Products & Services

Opportunities for the ship to be

the destination

Long Term

Resilience

Engage with more sustainable

and economically favourable

alternative suppliers

Short Term

Improve resilience to physical

climate risk through adaptation

of itinerary routes and

investment in port infrastructure

Short Term

Resource Efficiency

Improved operational efficiencies

arising from technological

advancements

Medium Term

Increased fuel efficiency through

alternative itinerary planning and

reduced energy use

Short-Medium Term

Increased resource efficiency

through reduced on-board energy

demand and consumption

Medium Term

We presently consider transition risks to be the most significant in terms of likelihood and impact. The

risks with the highest impact and likelihood of occurrence are associated with the transition to a low-GHG

emission future, in a scenario where low GHG emission technology does not exist, or where we have not

been able to access these technologies and where we have reduced availability and access to fuel.

The climate-related opportunities with the highest impact are a mix of mitigation and adaptation

opportunities. These include the positive impacts of supporting the adaptation of sustainable technological

advances for our business, improved operational efficiencies from technological advancements, and more

energy efficient itineraries from investing in port and destination projects.

Quantitative Scenario Analysis

In 2022, we quantitatively applied three distinct plausible climate scenarios to determine the potential

impacts of the risks and opportunities assessed. Using transition scenario assumptions from the International

Energy Agency (“IEA”) and climate and transition scenarios from the Intergovernmental Panel on Climate

Change (“IPCC”), we utilised two interlocking types of pathways, the Representative Concentration Pathways

(“RCPs”) and Shared Socioeconomic Pathways (“SSPs”) to create three sets of scenarios to understand

the relative materiality and possible range of impacts to the business from the selected climate-related risks

and opportunities under different potential futures.

Scenario 1: Steady Path to Sustainability (average temperature increase limited to 1.5°C above pre-industrial

levels by 2100) SSP1 / RCP1.9

Under this scenario, the world takes the rapid and strong policy measures required to meet the ambition

of the 2015 Paris Agreement (to keep the mean global annual temperature rise to well below 2°

warming above pre-industrial levels and pursue efforts to limit the temperature increase to 1.5°

above

pre-industrial levels). Under this scenario, low GHG emission technology takes over from fossil-fuels,

and reduced economic growth is also important for reaching net zero emissions by 2050.

We selected this scenario, as it provides us insight into a low-GHG emissions world that would benefit us

and our Climate Action Goals. Under this scenario, transition risks identified are material and our resilience

is dependent on our ability to effectively adopt low GHG emission technologies, refer to XX. Sustainability

for further details on ways we are monitoring and piloting technology developments. A transition to low

GHG emission technologies would help us adhere to increasing requirements to transition to a low-GHG

emissions future, including existing and emerging regulations, consumer preferences, and talent market

expectations. Our most impactful opportunity is the enhancement of our reputation and competitiveness,

by supporting the adaptation of sustainable technological advances for the cruise industry. This would also

further help us to mitigate our transition risks.

Scenario 2: Regional Rivalry (average temperature increase limited to below 2.8°C above pre-industrial levels

by 2100) SSP3 / RCP7.0

This scenario explores a possible route in which the world is seeing an emergence of tribalism and

nationalism. Low international priority for addressing environmental concerns leads to strong

environmental degradation in some regions. The combination of impeded development and limited

environmental concern results in poor progress toward climate sustainability. Growing resource

intensity and fossil fuel dependency along with difficulty in achieving international cooperation and

slow technological change imply high challenges to mitigation.

We selected this scenario, as it provides an indication of the world we would operate in if we do not achieve

the Paris Agreement target. This scenario presents a higher emissions future where physical risks are

material. Business resilience under this scenario is dependent on our ability to adapt to extreme weather

events and chronic physical risks. Under this scenario we can remain resilient by taking advantage of the

mobility of our cruise ships, which enables us to move our vessels between regions and adapt itineraries in

cases of extreme weather events. Additionally, based on a study performed, we are well placed to respond to

increased physical risks at our new port development projects, see Investment in Port and Destination

Projects on page 38.

Scenario 3: Fossil-fueled growth (average temperature increase limited to below 4°C above pre-industrial levels

by 2100) SSP5 / RCP8.5

The 4°C scenario explores a possible route in which as countries emerge from the coronavirus

pandemic, governments around the world focus on restoring growth through direct support to fossil

fuels and reverting to the tried and tested methods of the past.

Strategic Report

This scenario presents the highest emissions future where physical risks have the potential to be most

significant and would therefore allow us to model the impact of these extreme climate risks. Akin to

Scenario 2, business resilience under Scenario 3 will be dependent on our ability to adapt to extreme weather

events and chronic physical risks as well as the impacts to our supply chain across different geographical

areas. Our experience with previous supply chain disruptions suggests that under this scenario, we would be

resilient to supply chain risks given our ability to adapt to supply chain disruptions.

Key assumptions and limitations

The results of our quantitative scenario analysis have a high degree of uncertainty as there are assumptions

made for all modelling inputs. This means that results should be taken as an indicative “order of risk”.

Furthermore, the analysis assumes that the future conditions from climate change are shifted to today to

contextualize impacts in relation to the current business size. The analysis does not include:

• Forward-looking forecasting of our business operations; or

• Potential mitigation or adaptation measures that could be taken either by us, or by other parties over

the period considered (e.g., sustainable ship fuel development, governments building flood defenses).

Estimations and projections

In 2022, we completed several scenario analyses over three time horizons (2025, 2030, and 2050). Any

assumption made about fuel prices acknowledges the 2022 energy crisis and assumes that by 2025, oil prices

will stabilize in line with IEA price projections, at the time of analysis. We have also projected physical and

transition risks at a global level due to the high mobility of our assets.

The degree of potential impact was determined on a linear scale range of “Low”, having no material impact

or “High”having a material impact on Carnival Corporation & plc’s financial statements. Refer to

Note 2 — “Significant Accounting Policies, Climate Change”on page 81 in our Group financial statements

for our analysis of the impact of climate change on the Group financial statements.

Results of the Quantitative Scenario Analysis: Potential Impact on Operating Income

2025

2030

2050

Scenario 1

(

) How dose a low-GHG emissions future impact the price

of the fuels needed to power our ship engines?

(

) How would changing consumer sentiment drive changes

in demand for our offering?

(

) How are our profits affected by an increase in food

commodity prices?

(O)

What are the future savings associated with operational

efficiency improvements?

(O)

How could providing a service geared towards changing

consumer sentiment drive long-term growth for us?

Scenario 2

(

) How dose a low-GHG emissions future impact the price

of the fuels needed to power our ship engines?

(

) How would changing consumer sentiment drive changes

in demand for our offering?

(

) How are our profits affected by an increase in food

commodity prices?

(O)

What are the future savings associated with operational

efficiency improvements?

(O)

How could providing a service geared towards changing

consumer sentiment drive long-term growth for us?

Scenario 3

(

) How dose a low-GHG emissions future impact the price

of the fuels needed to power our ship engines?

(

) How would changing consumer sentiment drive changes

in demand for our offering?

(

) How are our profits affected by an increase in food

commodity prices?

(O)

What are the future savings associated with operational

efficiency improvements?

(O)

How could providing a service geared towards changing

consumer sentiment drive long-term growth for us?

Key

Transition Risk (

); Physical Risk (

); Opportunity (

)

Risk Financial Impact:

Low

Medium

High

Opportunity Financial Impact:

Low

Medium

High

How does a low-GHG emissions future impact the price of the fuels needed to power our ship engines?

There is an increased global regulatory focus on GHG and other emissions. Climate-change related regulatory

activity and developments that require us to reduce our emissions, which includes both the EU regulations

and the IMO Strategy, may require us to make capital investments in new equipment or technologies, pay for

emissions, purchase allowances and/or carbon offset credits, or otherwise incur additional costs or take

additional actions related to our emissions. Such activity may also impact us indirectly by increasing our

operating costs, including fuel costs. Additionally, fossil fuels are currently the only viable option for our

industry at present, we are closely monitoring technology developments and partnering with key organizations

to help identify and scale new technologies not yet ready for the cruise industry. Refer to XIX. Governmental

Regulations on page 16 and XX. Sustainability and Environmental Impact on pages 25 to 26.

Strategic Report

How would changing consumer sentiments drive changes in demand for our offering?

To mitigate the impact of this risk, our short and medium-term GHG emissions goals focus on GHG

intensity reduction, measured in both grams of CO

e per ALB-km and kilograms of CO

e per ALBD. In

addition, we are committed to our reduction of GHG emissions and pursuing net zero emissions by 2050,

aligned with the IMO Strategy and are at the early stages of developing our transition plan. While fossil fuels

are currently the only scalable and commercially viable option for our industry, we are closely monitoring

technology developments and pioneering important sustainability initiatives in the cruise industry. To provide

a path to net zero emissions, alternative low GHG emission fuels will be necessary for the maritime

industry; however, there are significant supply challenges that must be resolved before viability is reached.

Refer to XX. Sustainability and Environmental Impact on pages 21 to 26.

How are our profits affected by an increase in food commodity prices?

Under Scenarios 1 and 2, the impacts on food prices are indistinguishable from the historical commodity

market volatility. Under Scenario 3, we could face higher food costs which may impact our value chain and

operating profit. Our existing supply chain management strategies have remained resilient through the

more recent supply chain issues experienced globally, demonstrating our ability to mitigate global-scale

disruptions. In addition, our Circular Economy 2030 Goals include achieving a 50% unit food waste reduction

per person by 2030. Refer to XIII. Supply Chain on page 11 and XX. Sustainability and Environmental

Impact on page 22.

What are the future savings associated with operational efficiency improvements?

Under each scenario, the estimated total price of the fuel is the same, but the amount of fuel demanded

differs based on assumptions about operational efficiency improvements. To capture this potential upside,

we are investing in projects that improve the energy efficiency of our fleet. A premium for lowering our GHG

emissions, ranging between $75 and $100 per metric ton depending on the type of fuel, was added to the

cost of fuel during the strategic, capital, itinerary and other long-term planning processes and is used to

evaluate the payback period and return on investment for capital projects. We are also ensuring that our

brands design more energy efficient itineraries through our Corporate Itinerary Reviews. For further details

of our strategies in place to capture this opportunity, refer to XX. Sustainability and Environmental

Impact on pages 25 to 26.

How could providing a service geared towards changing consumer sentiment drive long-term growth for us?

Under scenarios 2 and 3, an immaterial number of consumers would align to low-GHG emissions services.

Under Scenario 1, from 2025 to 2050 across all countries, there is an increase in the expected price per

Passenger Cruise Days that we will be able to charge. By continuing to reduce our GHG emissions through

our strategies such as investing in energy efficiency projects, fleet changes, itinerary changes, and port

developments, we can remain resilient under Scenario 1. For further details of our strategies in place to

capture this opportunity, refer to XX. Sustainability and Environmental Impact on pages 25 to 26.

Investment in Port and Destination Projects

In addition, a climate study was undertaken in 2022 by a third party for two of our port development

projects at Celebration Key and Half Moon Cay Pier Project (The Bahamas), to enhance climate resilience.

Based on the results of this study, we are well placed to respond to the physical risks of climate change at the

two planned port locations and will have a number of measures in place to address physical climate

impacts. These results were reviewed by the SRE Committee and presented to the Boards of Directors in

2022 for an investment decision, which was approved. Furthermore, our investments in these ports and

destinations support our efforts to design more energy efficient itineraries based on their strategic locations.

Risk Management

We utilize a process for managing our climate risks and opportunities which begins with climate risk and

opportunity identification then follows with owner assignment, assessment, monitoring, management and

reporting. This process is ongoing and iterative.

Climate Risk and Opportunity Identification, Owner Assignment and Assessment

The qualitative scenario analysis is the foundation of our climate risk and opportunities identification and

assessment process and began with the evaluation of a long list of climate-related risks and opportunities we

may face, to generate an initial list of possible risks and opportunities. As discussed above, we considered a

high-GHG emissions and a low-GHG emissions scenario. Input from key stakeholders in the business was

obtained through facilitated workshops to identify additional climate risks and opportunities and refine

the list before prioritizing those identified. Assessment of these risks and opportunities was performed by

the SRE Committee and a cross section of management, who qualitatively evaluated the impact and likelihood

of these risks and opportunities. Certain financial, regulatory, reputational and physical risks and

opportunities, as described on pages 32-34, were then selected for more detailed quantitative scenario

analysis.

The SRE Committee reviews the selected risks and opportunities from our qualitative scenario analysis

quarterly and considers if any risks or opportunities no longer need monitoring, and if any new climate risks

or opportunities should be identified. Each climate risk has been assigned an owner who has responsibility

for the day-to-day evaluation and management of the risk. Following the climate risk identification process,

climate risks are assessed based on expected impact, likelihood, time horizon and speed of onset.

Risk summary (Ordered alphabetically)

Lack of viable low carbon technology to replace fossil fuels

Risk is that cruising (as a carbon-intensive industry) is severely restricted or subject to bans

Costs driven by climate-induced regulations significantly increase

Chronic climate change impacting supply chain availability and price

Itineraries are not viable due to extreme weather and/or sea level rise

Cruising no longer aligns to consumers climate values

Unable to meet climate-related requirements reduces access to capital / insurance

Reduced availability and access to fuel

Increased demand for reducing carbon-intensive practices

Failure to attract and retain talent due to climate credentials

Risks or opportunities that were selected for quantification

Key

Higher

likelihood

Lower

likelihood

Lower

impact

Higher

impact

Scenario key

Likelihood

Impact

S1 – Steady Path to Sustainability

S2 – Regional Rivalry

Opportunity summary (Ordered alphabetically)

Positioning as a sustainability leader

Opportunities for the ship to be the destination

Improved operational efficiencies arising from technological advancements

Increased fuel efficiency through alternative itinerary planning and reduced energy use

Access to new financing options available for organisations working on decarbonisation

Attract and retain new customers and improve reputation through sustainable itineraries and activities for changing

climate-induced preferences

Support the adaptation of sustainable technological advances for the cruise industry

Increased resource efficiency through reduced on-board energy demand and consumption

Engage with more sustainable and economically favourable alternative suppliers

Improve resilience to physical climate risk through adaptation of itinerary routes and investment in port

infrasrtucture

Access to private destinations or islands with infrastructure built by us

Risks or opportunities that were selected for quantification

Key

Harder

Easier

Lower

impact

Higher

impact

Scenario key

Ease of realisation

Impact

S1 – Steady Path to Sustainability

S2 – Regional Rivalry

Strategic Report

Climate Risk and Opportunity Monitoring, Management and Reporting

The primary method for review, scrutiny, and challenge of climate risks, involves the risk owners monitoring,

assessing and reporting how each risk and opportunity is changing over time based on climate risk indicators

and discussing options with the SRE Committee to reduce, accept, avoid or transfer risk.

Integration into our overall risk management

Overall, the Boards of Directors are responsible for determining the strategic direction of the company and

the nature and extent of the risk assumed by it. The Boards of Directors carry out a risk assessment to

ensure that principal and emerging risks, including those that would threaten our business model, future

performance, solvency or liquidity are effectively managed and/or mitigated. Within our risk management

framework, the Boards of Directors have ultimate oversight of climate-related risks, which have been identified

as a principal risk. Refer to the Governance pillar for a description of how climate-related risks are

overseen. In addition, refer to Item 3. Internal Control and Risk Assessment for a discussion on how we

identify and manage our principal risks.

Metrics and Targets

Our most material quantified risks are the transition risks

To mitigate the impact of these risks, we have

identified a four-part strategy, including fleet optimization, energy efficiency, itinerary efficiency, and new

technologies and alternative fuels. Refer to XX. Sustainability and Environmental Impact on pages 25 to 26.

The metrics and Climate Action Goals associated with these risks and opportunities, are outlined above

within XX. Sustainability and Environmental Impact on page 22. To demonstrate our commitment to

achieving our Climate Action Goals, our executive compensation targets are linked to our progress toward

achieving certain of our 2030 Sustainability Goals. Refer to Carnival plc Directors’ Remuneration Report on

pages 57-58 and 62 of the Proxy Statement for further details.

Our direct (Scope 1), indirect (Scope 2) and indirect value chain (Scope 3) GHG emissions are quantified

and reported. Additionally, limited assurance is provided on our GHG emissions by an independent third

party. In 2022, we stated that our climate disclosures were consistent with 10 of the 11 TCFD

recommendations. The one area where we were not consistent related to the disclosure of scope 3 emissions.

In 2023, we performed an inventory of our Scope 3 GHG emissions using the U.S. EPA Supply chain

GHG Emission Factors v1.2 and determined that our Scope 3 emissions were estimated to be approximately

40% of our total emissions. Our Scope 1, Scope 2 and Scope 3 emissions can be found in XX. Sustainability,

and Environmental Impact on page 27.

We have made progress over the past 15 years reducing our GHG emissions intensity and achieved our 2020

goal (to reduce the intensity of CO2e by 25% relative to a 2005 baseline, measured in grams CO2e / ALB-km)

three years early, in 2017. We have also made progress towards our 2030 GHG intensity reduction goal of 20%

from our 2019 baseline, measured in both grams of CO

e per ALB-km and kilograms of CO

e per ALBD.

In 2023, we reduced our GHG emission intensity on a lower berth distance basis by 14.0% and on an ALBD

basis by 14.1% relative to our 2019 baseline. Relative to 2008, our GHG emissions per ALBD have been

reduced by 39.3% while our capacity has grown by 55%. Refer to XX. Sustainability and Environmental

Impact on page 22.

Website Access to Carnival Corporation & plc SEC Reports

We use our websites as channels of distribution of company information. Our Form 10-K, Carnival plc

Annual Report, joint Quarterly Reports on Form 10-Q, joint Current Reports on Form 8-K, joint Proxy

Statement related to our annual shareholders meeting, Section 16 filings and all amendments to those reports

are available free of charge at www.carnivalcorp.com and www.carnivalplc.com and on the SEC’s website

at www.sec.gov as soon as reasonably practicable after we have electronically filed or furnished these reports

with the SEC. In addition, you may automatically receive email alerts and other information when you

enroll your email address by visiting the Investor Services section of our websites. The content of any website

referred to in this document is not incorporated by reference into this document.

Industry and Market Data

This document includes market share and industry data and forecasts that we obtained from industry

publications, other third-party information and internal company surveys. Industry publications, including

those from Cruise Industry News, and surveys and forecasts, generally state that the information contained

therein has been obtained from sources believed to be reliable. Cruise Industry News is a for profit magazine

company that covers all aspects of cruise operations. Their magazines and annual report cover all cruise lines

and shipyards and report on all aspects of cruise operations including relevant issues, financial results, ship

building, ship reviews, etc. All other references to third party information are publicly available at nominal or

no cost. We use the most currently available industry and market data to support statements as to our

market positions. Although we believe that the industry publications and third-party sources are reliable, we

have not independently verified any of the data. Similarly, while we believe our internal estimates with

respect to our industry are reliable, they have not been verified by any independent sources. While we are

not aware of any misstatements regarding any industry data presented herein, our estimates, in particular as

they relate to market share and our general expectations, involve risks and uncertainties and are subject to

change based on various factors, including those discussed under Item 4. Risk Management and/or Mitigation

of Principal and Emerging Risks within this Strategic Report.

Properties

As of November 30, 2023, the Carnival Corporation and Carnival plc headquarters and our larger shoreside

locations are as follows:

Location

Square Footage

(in thousands)

Own/Lease

Principal Operations

Miami, FL, U.S.A.

463/18

Own/Lease

Carnival Corporation & plc and Carnival

Cruise Line

Almere, Netherlands

253

Own

Arison Maritime Center

Rostock, Germany

224

Own

AIDA

Genoa, Italy

204/46

Own/Lease

Costa

Seattle, WA, U.S.A.

175

Lease

Holland America Line and Seabourn

Southampton, England

150

Lease

Carnival plc, Cunard and P&O Cruises

(UK)

Santa Clarita, CA, U.S.A.

113

Lease

Princess Cruises

Hamburg, Germany

Lease

AIDA

Fort Lauderdale, FL,

U.S.A.

Lease

Princess Cruises

Sydney, NSW, Australia

Lease

P&O Cruises (Australia)

Information about our cruise ships, including the number each of our cruise brands operate, as well as

information regarding our cruise ships under construction may be found under Part I, Item 1. Business. C.

“Our Global Cruise Business.”In addition, we own, lease or have controlling interests in port destinations,

exclusive islands, hotels, and lodges.

Legal Proceedings

The legal proceedings described in Note 6 — “Contingencies”of our DLC Financial Statements, including

those described under “COVID-19 Actions,” are shown in our IFRS Financial Statements in Note 23 —

“Contingencies”and are incorporated by reference into this Strategic Report.

On June 20, 2022, Princess Cruises notified the Australian Maritime Safety Authorization (“AMSA”) and

the flag state, Bermuda, regarding approximately six cubic meters of comminuted food waste (liquid

biodigester effluent) inadvertently released by

Coral Princess

inside the Great Barrier Reef Marine Park. On

June 23, 2022, the UK P&I Club N.V. provided a letter of undertaking for approximately $1.9 million

(being the estimated maximum combined penalty). On May 31, 2023, we received a summons from the

Australia Federal Prosecution Service indicating that formal charges are being pursued against Princess

Cruises and the Captain of the vessel. We believe the ultimate outcome will not have a material impact on

our consolidated financial statements.

Strategic Report

Executive Officers and Corporate Governance

Information About Our Executive Officers

The table below sets forth the name, age, years of service and title of each of our executive officers as of

January 26, 2024. Titles listed relate to positions within Carnival Corporation and Carnival plc unless

otherwise noted.

Age

Years of

Service (a)

Title

Micky Arison

Chair of the Boards of Directors

David Bernstein

Chief Financial Officer and Chief Accounting Officer

Vice Admiral William R.

Burke (Ret.)

Chief Maritime Officer

Bettina Deynes

Global Chief Human Resources Officer

Enrique Miguez

General Counsel

Josh Weinstein

President, Chief Executive Officer and Chief Climate

Officer

(a)

Years of service with us or Carnival plc predecessor companies.

Business Experience of Executive Officers

Micky Arison has been Chair of the Boards of Directors since 1990 and a Director since 1987. He was

Chief Executive Officer from 1979 to 2013.

David Bernstein has been Chief Financial Officer since 2007 and Chief Accounting Officer since 2016.

Bettina Deynes has been Global Chief Human Resources Officer since 2022 and she was Chief Human

Resources Officer at Carnival Cruise Line from 2019 to 2022. She was Managing Director at The Surrogate

CEO, a temporary executive placement and consulting company, where she served as a C-suite level

consultant from 2018 to 2019, and Chief Human Resources Officer and Strategy Officer at the Society for

Human Resource Management, a professional human resources membership association, where she led the

human resources organization including talent management, strategy and development from 2014 to

2018.

William R. Burke, retired Vice Admiral, has been Chief Maritime Officer since 2013.

Enrique Miguez has been General Counsel since 2021. He was Vice President and Deputy General Counsel

from 2003 to 2021.

Josh Weinstein has been President, Chief Executive Officer and Chief Climate Officer since 2022. He was

Chief Operations Officer from 2020 to 2022, President of Carnival UK from 2017 to 2022 and Treasurer from

2007 to 2017.

Corporate Governance

Our Code of Business Conduct and Ethics applies to all our team members and our Boards of Directors

and states our commitment to conduct business ethically, without the influence of bribes or acts of corruption.

We are committed to complying with the laws prohibiting bribery and other corrupt practices that apply

everywhere we operate. Additionally, we provide trainings on anti-corruption laws and regulations and how

to identify bribery to our team members. This Code of Business Conduct and Ethics is posted on our

website, which is located at www.carnivalcorp.com and www.carnivalplc.com. We intend to satisfy the

disclosure requirements regarding any amendments to, or waivers from, provisions of this Code of Business

Conduct and Ethics by posting such information on our website, at the addresses specified above. Refer to

Annex C — Carnival plc Corporate Governance Report of the Proxy Statement on page C-1.

Dividends

We do not expect to pay dividends on Carnival Corporation common stock and Carnival plc ordinary

shares for at least the next few years.

Repurchase Authorizations

Stock Swap Program

Our Stock Swap Program allows us to realize a net cash benefit when Carnival Corporation common stock

is trading at a premium to the price of Carnival plc ordinary shares. Under the Stock Swap Program, we may

elect to offer and sell shares of Carnival Corporation common stock at prevailing market prices in ordinary

brokers’transactions and repurchase an equivalent number of Carnival plc ordinary shares in the UK

market.

II.

Carnival plc Shareholder Approvals

Annual shareholder approval is required for Carnival plc to buy back its ordinary shares. The existing

shareholder approval is limited to a maximum of 18.6 million ordinary shares of Carnival plc and expires at

the conclusion of the Carnival plc 2024 Annual General Meeting or July 20, 2024, whichever is earlier. We

also treat purchases of Carnival plc ordinary shares by Carnival Corporation or Carnival Investments Limited

under the Stock Swap Program as if they were made by Carnival plc under the Carnival plc share buyback

authority.

Business Review.

The Directors consider that within the DLC arrangement, the most appropriate presentation of Carnival

plc’s Group Business Review is by reference to the DLC Financial Statements. Accordingly, the below presents

the required Business Review for Carnival Corporation & plc in order to satisfy reporting requirements of

the Companies Act 2006. Refer to Note 3 — “Segment Information”, for a reconciliation of the Carnival

Corporation & plc U.S. GAAP amounts to the corresponding Carnival plc Group IFRS amounts as of and

for the years ended November 30, 2023 and 2022.

Known Trends and Uncertainties

• We believe the volatility in the cost of fuel and increases in other related costs are reasonably likely to

continue to impact our profitability in both the short and long-term.

• We believe inflation and interest rates are reasonably likely to continue to impact our profitability.

• We believe a global minimum tax could affect us in 2026, with the potential for a one-year deferral.

Prior to any mitigating actions, we believe the annual impact could be approximately $200 million. We

continue to evaluate the impact of these rules and are currently evaluating a variety of mitigating

actions to minimize the impact. The application of the rules continues to evolve, and its outcome may

alter our tax obligations in certain countries in which we operate.

• We believe the increasing global focus on climate change, including the reduction of GHG emissions

and new and evolving regulatory requirements, is reasonably likely to have a material negative

impact on our future financial results. We became subject to the EU Emission Trading Scheme

(“ETS”) on January 1, 2024, which includes a three-year phase-in period. We estimate the impact in

2024 to be approximately $51 million based on a European Union Allowance cost of $75 per metric

ton of emissions. Refer to XIX. Governmental Regulations.

• We believe that the instability in the Red Sea region currently impacting shipping could have an

impact on our results of operations.

Results of Operations

We have historically earned substantially all of our cruise revenues from the following:

• Sales of passenger cruise tickets and, in some cases, the sale of air and other transportation to and from

airports near our ships’ home ports and cancellation fees. We also collect fees, taxes and other charges from

our guests. The cruise ticket price typically includes the following:

• Accommodations

• Most meals, including snacks at numerous venues

• Access to amenities such as swimming pools, water slides, water parks, whirlpools, a health club and

sun decks

• Child care and supervised youth programs

• Entertainment, such as theatrical and comedy shows, live music and nightclubs

• Visits to multiple destinations

Strategic Report

• Sales of onboard goods and services not included in the cruise ticket price. This generally includes the

following:

• Beverage sales

• Internet and communication services

• Casino gaming

• Full service spas

• Shore excursions

• Specialty restaurants

• Retail sales

• Art sales

• Photo sales

• Laundry and dry cleaning services

These goods and services are provided either directly by us or by independent concessionaires, from which

we receive either a percentage of their revenues or a fee. Concession revenues do not have direct expenses

because the costs and services incurred for concession revenues are borne by our concessionaires. In 2023,

we earned 34% of our cruise revenues from onboard and other revenue goods and services.

We earn our tour and other revenues from our hotel and transportation operations and other revenues.

We incur cruise operating expenses for the following:

• The costs of passenger cruise bookings, which include travel agent commissions, cost of air and other

transportation, port fees, taxes, and charges that directly vary with guest head counts and credit and debit

card fees

• Onboard and other cruise costs, which include the costs of beverage sales, costs of shore excursions, costs

of retail sales, internet and communication costs, credit and debit card fees, other onboard costs, costs

of cruise vacation protection programs and pre- and post-cruise land packages

• Payroll and related costs, which include the costs of officers and crew in bridge, engineering and hotel

operations. Substantially all costs associated with our shoreside personnel are included in selling and

administrative expenses

• Fuel costs, which include fuel delivery costs

• Food costs, which include both our guest and crew food costs

• Other ship operating expenses, which include port costs that do not vary with guest head counts; repairs

and maintenance, including minor improvements and dry-dock expenses; hotel costs; entertainment; gains

and losses on ship sales; ship impairments; freight and logistics; insurance premiums and all other ship

operating expenses

We incur tour and other costs and expenses for our hotel and transportation operations and other expenses.

Statistical Information

Years Ended

November 30,

2023

2022

Passenger Cruise Days (“PCDs”)

(in millions)

(a)

.......................

91.4

54.6

Available Lower Berth Days (“ALBDs”)

(in millions)

(b)

..................

91.3

72.5

Occupancy percentage (c)

.......................................

100%

75%

Passengers carried

(in millions)

...................................

12.5

7.7

Fuel consumption in metric tons

(in millions)

.........................

2.9

2.6

Fuel consumption in metric tons per thousand ALBDs

...................

32.1

36.1

Fuel cost per metric ton consumed

.................................

701

830

Currencies (USD to 1)

AUD

....................................................

0.66

0.70

CAD

....................................................

0.74

0.77

EUR

....................................................

1.08

1.06

GBP

....................................................

1.24

1.25

Notes to Statistical Information

(a)

PCD represents the number of cruise passengers on a voyage multiplied by the number of revenue-

producing ship operating days for that voyage.

(b)

ALBD is a standard measure of passenger capacity for the period that we use to approximate rate

and capacity variances, based on consistently applied formulas that we use to perform analyses

to determine the main non-capacity driven factors that cause our cruise revenues and expenses to

vary. ALBDs assume that each cabin we offer for sale accommodates two passengers and is computed

by multiplying passenger capacity by revenue-producing ship operating days in the period.

(c)

Occupancy, in accordance with cruise industry practice, is calculated using a numerator of PCDs

and 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.

2023 Compared to 2022

Carnival plc Group IFRS Key Measures

Years Ended November 30,

(in millions)

2023

2022

Revenue

..............................................

7,982

3,941

Operating income (loss)

...................................

753

(2,905)

Total assets

............................................

14,689

15,532

The Directors consider that within the DLC arrangement, the most appropriate presentation of Carnival

plc’s Group Business Review is by reference to the DLC Financial Statements. Accordingly, the below presents

the required Business Review for Carnival Corporation & plc in order to satisfy reporting requirements of

the Companies Act 2006.

Consolidated

Years Ended November 30,

(in millions)

2023

2022

Change

Revenues

Passenger ticket

...........................

14,067

7,022

7,045

Onboard and other

........................

7,526

5,147

2,380

21,593

12,168

9,425

Operating Expenses

Commissions, transportation and other

..........

2,761

1,630

1,131

Onboard and other

........................

2,375

1,528

847

Payroll and related

.........................

2,373

2,181

192

Fuel

...................................

2,047

2,157

(110)

Food

..................................

1,335

863

472

Ship and other impairments

..................

—

440

(440)

Other operating

...........................

3,426

2,958

467

Cruise and tour operating expenses

.............

14,317

11,757

2,560

Selling and administrative

....................

2,950

2,515

435

Depreciation and amortization

................

2,370

2,275

19,637

16,547

3,090

Operating Income (Loss)

......................

1,956

(4,379)

6,335

Nonoperating Income (Expense)

Interest income

...........................

233

159

Interest expense, net of capitalized interest

........

(2,066)

(1,609)

(457)

Gains (losses) on debt extinguishment, net

........

(111)

(1)

(110)

Other income (expense), net

..................

(75)

(165)

(2,018)

(1,701)

(317)

Income (Loss) Before Income Taxes

...............

(62)

(6,080)

6,018

Strategic Report

NAA

Years Ended November 30,

(in millions)

2023

2022

Change

Revenues

Passenger ticket

...........................

9,122

4,692

4,430

Onboard and other

........................

5,466

3,589

1,877

14,588

8,281

6,307

Operating Expenses

..........................

9,587

7,526

2,061

Selling and administrative

.....................

1,753

1,517

236

Depreciation and amortization

..................

1,495

1,408

12,836

10,451

2,385

Operating Income (Loss)

......................

1,752

(2,170)

3,922

Europe

Years Ended November 30,

(in millions)

2023

2022

Change

Revenues

Passenger ticket

...........................

5,004

2,660

2,344

Onboard and other

........................

1,531

872

659

6,535

3,531

3,003

Operating Expenses

..........................

4,398

3,925

474

Selling and administrative

.....................

876

745

131

Depreciation and amortization

..................

668

692

(24)

5,942

5,361

581

Operating Income (Loss)

......................

593

(1,830)

2,423

During the pause in our guest cruise operations, we incurred substantial debt and require a significant

amount of cash to service our debt. Our ability to generate cash will be affected by general macroeconomic,

financial, geopolitical, competitive, regulatory and other factors beyond our control. The full extent of

these impacts is uncertain and may be amplified by our substantial debt balance.

Revenues

Consolidated

Cruise passenger ticket revenues made up 65% of our total revenues in 2023 while onboard and other

revenues made up 35%. Revenues for the year ended November 30, 2023 increased by $9.4 billion to

$21.6 billion from $12.2 billion in 2022 due to the significant increase of ships in service and considerably

higher occupancy levels in 2023 as compared to 2022. ALBDs increased to 91.3 million in 2023 as compared

to 72.5 million in 2022. Occupancy for 2023 was 100%, compared to 75% in 2022.

NAA Segment

Cruise passenger ticket revenues made up 63% of our NAA segment’s total revenues in 2023 while onboard

and other cruise revenues made up 37%. NAA segment revenues for 2023 increased by $6.3 billion to

$14.6 billion from $8.3 billion in 2022 due to the significant increase of ships in service and considerably

higher occupancy levels in 2023 as compared to 2022. ALBDs increased to 56.4 million in 2023 as compared

to 44.3 million in 2022. Occupancy for 2023 was 103% compared to 82% in 2022.

Europe Segment

Cruise passenger ticket revenues made up 77% of our Europe segment’s total revenues in 2023 while

onboard and other cruise revenues made up 23%. Europe segment revenues for 2023 increased by $3.0 billion

to $6.5 billion from $3.5 billion in 2022 due to the significant increase of ships in service and considerably

higher occupancy levels in 2023 as compared to 2022. ALBDs increased to 34.9 million in 2023 as compared

to 28.2 million in 2022. Occupancy for 2023 was 95% compared to 65% in 2022.

Operating Expenses

Consolidated

Operating expenses increased by $2.6 billion to $14.3 billion in 2023 from $11.8 billion in 2022. These

increases were driven by our resumption of guest cruise operations, an increase of ships in service and

considerably higher occupancy levels.

Fuel costs decreased by $0.1 billion to $2.0 billion in 2023 from $2.2 billion in 2022. $0.4 billion of this

decrease was caused by lower fuel prices and changes in fuel mix of $129 per metric ton consumed in 2023

compared to 2022, partially offset by higher fuel consumption due to the resumption of guest cruise operations.

We did not recognize ship and other impairment charges in 2023 compared to $440 million recognized in

2022.

Selling and administrative expenses increased by $0.4 billion to $2.9 billion in 2023 from $2.5 billion in

2022. This increase was caused by increases in advertising costs and administrative expenses incurred as part

of our resumption of guest cruise operations, which includes an increase in incentive compensation

reflecting expected improvements in the company’s current and long-term performance.

The drivers in changes in costs and expenses for our NAA and Europe segments are the same as those

described for our consolidated results.

Nonoperating Income (Expense)

Interest expense, net of capitalized interest, increased by $0.5 billion to $2.1 billion in 2023 from $1.6 billion

in 2022. The increase was caused by a higher average interest rate in 2023 compared to 2022, partially

offset by a decrease in total debt.

Debt extinguishment and modification costs were $111 million in 2023 as a result of debt transactions

during the year compared to $1 million in 2022.

Liquidity, Financial Condition and Capital Resources

The Directors consider that within the DLC arrangement, the most appropriate presentation of Carnival

plc’s Group Liquidity, Financial Condition and Capital Resources is by reference to the DLC Financial

Statement. Accordingly, the below presents the required disclosures for Carnival Corporation & plc in order

to satisfy reporting requirements of the Companies Act 2006.

As of November 30, 2023, we had $5.4 billion of liquidity including $2.4 billion of cash and cash equivalents

and $3.0 billion of borrowings available under our Revolving Facility, which matures in August 2024. In

February 2023, Carnival Holdings II entered into the $2.1 billion New Revolving Facility, which may be

utilized beginning in August 2024, at which date it will replace our Revolving Facility. We will continue to

pursue various opportunities to refinance future debt maturities to extend maturity dates and reduce interest

expense by repaying some of our existing indebtedness. Refer to Note 5 — “Debt”of the DLC Financial

Statements, Note 14 — “Debt and Interest Expense”within the plc Group Financial Statements and “Funding

Sources” below for additional details.

Strategic Report

We had a working capital deficit of $6.2 billion as of November 30, 2023 compared to a working capital

deficit of $3.1 billion as of November 30, 2022. The increase in working capital deficit was caused by a

decrease in cash and cash equivalents and restricted cash and an increase in customer deposits, partially offset

by an increase in prepaid expenses and a decrease in short-term borrowings and the current portion of

long-term debt. We operate with a substantial working capital deficit. This deficit is mainly attributable to

the fact that, under our business model, substantially all of our passenger ticket receipts are collected in

advance of the applicable sailing date. These advance passenger receipts generally remain a current liability

on our balance sheet until the sailing date. The cash generated from these advance receipts is used

interchangeably with cash on hand from other sources, such as our borrowings and other cash from

operations. The cash received as advanced receipts can be used to fund operating expenses, pay down our

debt, make long-term investments or any other use of cash. Included within our working capital are $6.1 billion

and $4.9 billion of customer deposits as of November 30, 2023 and 2022, respectively. We have agreements

with a number of credit card processors that transact customer deposits related to our cruise vacations. Certain

of these agreements allow the credit card processors to request, under certain circumstances, that we

provide a reserve fund in cash. In addition, we have a relatively low level of accounts receivable and limited

investment in inventories.

Sources and Uses of Cash

Operating Activities

Our business provided $4.3 billion of net cash flows from operating activities during 2023, an increase of

$6.0 billion, compared to $1.7 billion used in 2022. This was caused by a decrease in the net loss compared

to the same period in 2022 and other working capital changes.

Investing Activities

During 2023, net cash used in investing activities was $2.8 billion. This was driven by:

• Capital expenditures of $1.9 billion for our ongoing new shipbuilding program

• Capital expenditures of $1.4 billion for ship improvements and replacements, information technology

and buildings and improvements

• Proceeds from sales of ships and other of $340 million

During 2022, net cash used in investing activities was $4.8 billion. This was driven by:

• Capital expenditures of $3.9 billion for our ongoing new shipbuilding program

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

and buildings and improvements

• Proceeds from sales of ships and other of $70 million

• Purchases of short-term investments of $315 million

• Proceeds from maturity of short-term investments of $515 million

Financing Activities

During 2023, net cash used in financing activities of $5.1 billion was driven by:

• Repayments of $200 million of short-term borrowings

• Repayments of $5.9 billion of long-term debt and refinancing of $1.8 billion of long-term debt to

extend maturities

• Issuances of $3.0 billion of long-term debt

• Debt issuance costs of $131 million

• Debt extinguishment costs of $79 million

• Proceeds from issuance of $22 million of Carnival Corporation common stock and purchases of

$20 million of Carnival plc ordinary shares under our Stock Swap Program

During 2022, net cash provided by financing activities of $3.6 billion was caused by:

• Net repayments of short-term borrowings of $2.6 billion

• Repayments of $2.1 billion of long-term debt

• Debt issuance costs of $153 million

• Issuances of $7.2 billion of long-term debt

• Net proceeds of $1.2 billion from the public offering of Carnival Corporation common stock

• Proceeds from issuance of $95 million of Carnival Corporation common stock and purchases of

$87 million of Carnival plc ordinary shares under our Stock Swap Program

Material Cash Requirements

The Directors consider that within the DLC arrangement, the most appropriate presentation of Carnival

plc’s Group Material Cash Requirements, Funding Sources and Quantitative and Qualitative Disclosures

About Market Risk is by reference to the DLC Financial Statements. Accordingly, the below presents the

required disclosures for Carnival Corporation & plc in order to satisfy reporting requirements of the

Companies Act 2006.

Payments Due by

(in millions)

2024

2025

2026

2027

2028

Total

Debt (a)

.....................

3,883

3,844

4,628

7,487

9,755

$ 29,597

Newbuild capital expenditures (b) . . .

2,437

958

—

3,395

Total

.......................

6,320

4,802

4,628

7,487

9,755

$ 32,992

(a)

Includes principal as well as estimated interest payments and does not include the impact of any future

possible refinancings. Excludes undrawn export credits.

(b)

As of November 30, 2023, we have committed undrawn export credit facilities of $3.0 billion which

fund a portion of our newbuild contractual commitments.

Funding Sources

As of November 30, 2023, we had $5.4 billion of liquidity including $2.4 billion of cash and cash equivalents

and $3.0 billion of borrowings available under our Revolving Facility, which matures in August 2024. In

February 2023, Carnival Holdings II, a subsidiary of Carnival Corporation, entered into the $2.1 billion New

Revolving Facility, which may be utilized beginning in August 2024, at which date it will replace our

Revolving Facility. Refer to Note 14 — “Debt and Interest Expense” of the consolidated financial statements

for additional discussion. In addition, we had $3.0 billion of undrawn export credit facilities to fund ship

deliveries planned through 2025. We plan to use existing liquidity and future cash flows from operations to

fund our cash requirements including capital expenditures not funded by our export credit facilities. We seek

to manage our credit risk exposures, including counterparty nonperformance associated with our cash and

cash equivalents, and future financing facilities by conducting business with well-established financial

institutions, and export credit agencies and diversifying our counterparties.

(in billions)

2024

2025

Future export credit facilities at November 30, 2023

......................

2.3

0.7

Our export credit facilities contain various financial covenants as described in Note 5 — “Debt” within the

DLC Financial Statements and Note 14 — “Debt and Interest Expense within the plc Group Financial

Statements. At November 30, 2023, we were in compliance with the applicable covenants under our debt

agreements.

Quantitative and Qualitative Disclosures About Market Risk

For a discussion of our hedging strategies and market risks, see the discussion below and the consolidated

financial statements.

Fuel Price Risks

Substantially all our exposure to market risk for changes in fuel prices relates to the consumption of fuel on

our ships.

Strategic Report

Foreign Currency Exchange Rate Risks

Operational Currency Risks

Our operations primarily utilize the U.S. dollar, Euro, Sterling or the Australian dollar as their functional

currencies. Our operations also have revenue and expenses denominated in non-functional currencies.

Movements in foreign currency exchange rates will affect our financial statements.

Investment Currency Risks

The foreign currency exchange rates were as follows:

November 30,

2023

2022

USD to 1:

AUD

......................................................

0.66

CAD

......................................................

0.74

EUR

......................................................

1.10

1.03

GBP

......................................................

1.27

1.20

If the November 30, 2022 currency exchange rates had been used to translate our November 30, 2023

non-U.S. dollar functional currency operations’assets and liabilities (instead of the November 30, 2023 U.S.

dollar exchange rates), our total assets would have been lower by $1.0 billion and our total liabilities would

have been lower by $0.5 billion.

As of November 30, 2023, we have a cross currency swap totaling $670 million which settles through 2024.

This cross-currency swap is designated as a hedge of our net investments in foreign operations, which has a

euro-denominated functional currency, thus partially offsetting the foreign currency exchange rate risk.

Based on a 10% change in the U.S. dollar to euro exchange rate as of November 30, 2023, we estimate that

the fair value of this cross-currency swap and offsetting change in U.S. dollar value of our net investments

would change by $66 million.

Newbuild Currency Risks

At November 30, 2023, our remaining newbuild currency exchange rate risk primarily relates to euro-

denominated newbuild contract payments, which represent a total unhedged commitment of $3.0 billion

and relate to newbuilds scheduled to be delivered through 2025 to non-euro functional currency brands. The

functional currency cost of each of these ships will increase or decrease based on changes in the exchange

rates until the unhedged payments are made under the shipbuilding contract. We may enter into additional

foreign currency derivatives to mitigate some of this foreign currency exchange rate risk. Based on a 1%

change in euro to U.S. dollar exchange rates as of November 30, 2023, the remaining unhedged cost of

these ships would have a corresponding change of $30 million.

Interest Rate Risks

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

November 30, 2023

Fixed rate

.....................................................

62%

EUR fixed rate

..................................................

18%

Floating rate

...................................................

EUR floating rate

................................................

15%

At November 30, 2023, we had interest rate swaps that have effectively changed $46 million of EURIBOR-

based floating rate euro debt to fixed rate euro debt. We also had interest rate swap agreements which effectively

changed $2.5 billion at November 30, 2023 of SOFR-based floating rate USD debt to fixed rate USD

debt. Based on a 100 basis point change in the market interest rates, our annual interest expense on floating

rate debt, including the effect of our interest rate swaps, will change by approximately $60 million.

Internal Control and Risk Assessment.

Management

Boards of Directors Committees

Oversee strategy and risk management

AUDIT COMMITTEES

Oversee risk management related to

financial, information technology,

cybersecurity and non-HESS related

operational risks, as well as monitoring

changes to and compliance with related

legal and regulatory requirements.

EXECUTIVE MANAGEMENT

Responsible for managing the business,

providing the Boards of Directors and

Committees with appropriate information

to enable them to carry out their

responsibilities. Performs remediation

actions resulting from investigations by

RAAS as well as the Global Ethics and

Compliance function.

GLOBAL ETHICS

AND COMPLIANCE

Responsible for supporting a high level of

ethics and integrity and helping

management maintain compliance with

applicable laws, regulations and standards.

RISK ADVISORY AND

ASSURANCE SERVICES

Responsible for providing independent

assurance that controls are well designed and

operating effectively.

HESS COMMITTEES

Oversee risk management related to HESS

and sustainability risks as well as

monitoring changes to and compliance

with related legal and regulatory

requirements.

COMPLIANCE COMMITTEES

Oversee risk management related to compliance

with applicable laws and regulations, including

our compliance monitoring activities, supporting

a high level of ethics and integrity.

Note: The Boards of Directors Compensation and Nominating & Governance Committees are also responsible

for some strategy and risk management activities.

Our Risk Management Framework

The Boards of Directors have overall responsibility for determining the strategic direction of our business

and have established a framework to manage risk and determine the nature and extent of the principal and

emerging risks acceptable to our business. Our framework is designed to identify and manage, rather than

eliminate, risk to the achievement of our strategic objectives. The Boards of Directors, through their

Committees and executive management, have carried out a robust assessment of our principal and emerging

risks, including to ensure that they are effectively managed and/or mitigated.

Risk management is embedded in all areas of our business and is reflected across our policies and procedures.

Our risk management framework includes an organization wide, multi-layered approach and consists of

the Boards of Directors, their Committees, Risk Advisory and Assurance Services (“RAAS”), Global Ethics

and Compliance and executive management.

The diagram above, illustrates the interaction between the Boards of Directors, their Committees and our

executive management to continuously assess, mitigate and manage risks. The Boards of Directors leverage

their Committees, principally the Audit Committees, the HESS Committees and the Compliance

Committees, to oversee our risk management activities. Each area of our business reports via executive

management to these Committees. The Committees of the Boards of Directors and the executive management

of each area of our business are supported by RAAS and Global Ethics and Compliance.

Refer to Annex C — Carnival plc Corporate Governance Report of the Proxy Statement on pages C-6 to

C-9 for additional information on the Committees of the Boards.

How we identify and manage risk

Risk assessment processes are integrated within our business operations at every level. Risks are identified

by individuals across all businesses and functions and at many layers of the organization by considering what

could prevent us from achieving our strategic, operational or compliance objectives or impact the

sustainability of our business model. In deciding which risks are principal and emerging risks, our executive

management considers the potential impact and probability of the related events or circumstances, and

the timescale over which they may occur. In addition, under the supervision of the Boards of Directors and

their Committees, executive management is responsible for ensuring that we have active plans and adequate

resources to manage and/or mitigate the principal and emerging risks, including HESS and compliance related

risks, identified by the business. As new risks arise, executive management seeks to ensure they are properly

reviewed and monitored.

Strategic Report

Internal Control

Internal control and risk management is an ongoing process embedded in each of our operations. It is

designed to identify, evaluate and manage the principal and emerging risks faced by the business units. A

system of internal controls designed to be capable of responding quickly to evolving risks in the business has

been established, comprising procedures for the prompt reporting of significant and material internal

control deficiencies together with the appropriate remedial actions. Carnival Corporation & plc has adopted

the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) guidance for

implementing its internal controls as part of its SOX compliance plan. COSO is considered to be the

leading internal control framework and references the same internal control objectives and components as

are used by the UK Corporate Governance Code in assessing the effectiveness of a company’s risk and control

processes.

Our system of internal control and risk management was in place throughout 2023 and has continued in

place up to the date of approval of this Strategic Report. The Boards of Directors have performed their

annual review of the effectiveness of the systems of internal control and risk management, including those

related to financial reporting and confirm that it is in compliance with the UK Corporate Governance Code.

The Boards of Directors review of the system of internal controls has not identified any significant

failings or weaknesses, and therefore, no remedial actions are required.

Emerging Risks

We continuously evaluate potential emerging risks that could significantly impact or challenge our strategy

and business model. Emerging risks identified are managed and monitored alongside our existing principal

risks. An example of this in practice are the direct and indirect risks arising from climate change which

continue to evolve. To further address the evolving and emerging risks associated with climate change, we

created a Strategic Risk Evaluation (“SRE”) Committee to assist in identifying, monitoring and reviewing the

management of climate-related risks and opportunities. Refer to subsection “b.” of section XX.

Sustainability and Environmental Impact on page 29 and Operational Risk Factor “e.”on page 56 for

additional details on how we manage risks arising from climate change.

Risk Management and/or Mitigation of Principal and Emerging Risks.

You should carefully consider the following discussion of material factors, events and uncertainties that

make an investment in the company’s securities risky and provide important information for the understanding

of the “forward-looking”statements discussed in this Annual Report and elsewhere. These risk factors

should be read in conjunction with other information in this Annual Report.

The events and consequences discussed in these risk factors could have a material adverse effect on the

company’s business, financial condition, operating results and stock price. These risk factors do not identify

all risks that the company faces; operations could also be affected by factors, events, or uncertainties that

are not presently known to the company or that the company currently does not consider to present material

risks to its operations. In addition to the risk factors below, additional or unforeseen effects from our

substantial debt balance incurred during the pause of our guest cruise operations could give rise to or amplify

many of the risks discussed below. Some of the statements in this item and elsewhere in this document are

“forward-looking statements.”For a discussion of those statements and of other factors to consider see the

“Cautionary Note Concerning Factors That May Affect Future Results”section.

The ordering and lettering of the risk factors set forth below is not intended to reflect any company

indication of priority or likelihood.

Operational Risk Factors

Events and conditions around the world, including geopolitical uncertainty, war and other military actions,

inflation, higher fuel prices, higher interest rates and other general concerns impacting the ability or

desire of people to travel have led, and may in the future lead, to a decline in demand for cruises as well as

negative impacts to our operating costs and profitability.

We have been, and may continue to be, impacted by the public’s concerns regarding the health, safety and

security of travel, including government travel advisories and travel restrictions, political instability and civil

unrest, terrorist attacks, war and military action and other general concerns. The resulting impacts of

these events, including supply chain disruptions, increased fuel prices, impact on demand for cruises to

neighboring regions and international sanctions and other measures that have been imposed, have adversely

affected, and may continue to adversely affect, our business. These factors may also have the effect of

heightening many other risks to our business, any of which could materially and adversely affect our business

and results of operations. Additionally, we have been, and may continue to be, impacted by heightened

regulations around customs and border control, travel bans to and from certain geographical areas, voluntary

changes to our itineraries in light of geopolitical events, government policies increasing the difficulty of

travel and limitations on issuing international travel visas. We may be impacted by adverse changes in the

perceived or actual economic climate, such as inflation, global or regional recessions, higher unemployment

and underemployment rates and declines in income levels.

Examples of how we manage and/or mitigate this risk:

• We coordinate with law enforcement and other government agencies around the globe and endeavor

to identify security-related threats at sea and ashore

• We have communications programs to help mitigate the adverse impacts of publicity

• We have put in place various strategies and initiatives, including increasing our marketing and

advertising programs in efforts to drive incremental demand for cruising

• We have extended our demand planning and are placing purchase orders earlier to compensate for

current extended lead times for supplies

• We optimize itineraries through our itinerary planning reviews and have the ability to change

itineraries to increase demand and/or to reduce fuel consumption

Key stakeholders considered:

• Communities we serve

• Guests and travel agent partners

• Investors and lenders

Pandemics have in the past and may in the future have a significant negative impact on our financial

condition and operations.

Pandemics have in the past and may in the future have a significant negative impact on our financial

condition and operations. We could:

• be forced to re-implement a pause of our guest cruise operations

• be negatively impacted by travel advisories, restrictions, recommendations and regulations set by

various governmental authorities, which could impact our occupancy levels

• be subject to enhanced health and hygiene requirements in attempts to counteract future outbreaks,

and these requirements may be costly, take a significant amount of time to implement across our global

cruise operations and may result in disruptions in guest cruise operations, incremental costs and

loss of revenue

• be subject to negative publicity, along with the cruise industry, which could have a long-term impact

on the appeal of our cruises

• be subject to lawsuits, other governmental investigations and other actions

• be required to reassess our ship deployment options and our fleet, which could lead to the removal

of additional ships from our fleet and may result in incremental ship impairment charges and losses on

ship sales

• be negatively impacted as a result of the adverse impact on our partners, counterparties and joint

ventures

• be negatively impacted by the inability to attract and retain the loyalty of our guests and hire and

retain our crew

Strategic Report

Examples of how we manage and/or mitigate this risk:

• We have insurance coverage for certain liabilities, costs and expenses through our participation in

Protection and Indemnity (“P&I”) clubs

• We have developed robust health and safety protocols and mitigation strategies designed to prevent

the spread of disease on our ships

• We report health, environmental, safety and security incidents and take appropriate action, including

conducting investigations, to reduce the risk of recurrence

• We manage our liquidity, including repaying and refinancing future debt maturities to extend

maturity dates and reduce interest expense, managing our costs and can reduce our capital expenditures

and operating expenses, as appropriate

Key stakeholders considered:

• Communities we serve

• Team members

• Guests and travel agent partners

• Investors and lenders

Incidents concerning our ships, guests or the cruise industry have in the past and may, in the future,

negatively impact the satisfaction of our guests and crew and lead to reputational damage.

Our operations involve the risk of incidents and media coverage thereof. Such incidents include, but are not

limited to, the improper operation or maintenance of ships, motorcoaches and trains; guest and crew

illnesses; mechanical failures, fires and collisions; repair delays, groundings and navigational errors; oil spills

and other maritime and environmental issues as well as other incidents at sea, while in port or on land

which may generate negative publicity or cause guest and crew discomfort, injury, or death. Although our

commitment to the safety and comfort of our guests and crew is paramount to the success of our business, our

ships have been involved in outbreaks, accidents and other incidents in the past and we may experience

similar or other incidents in the future. Our ability to attract and retain the loyalty of our guests, our ability

to hire and the amounts we must pay our crew depend, in part, upon the perception and reputation of

our company and our brands and the public’s concerns regarding the health and safety of travel generally,

as well as the cruising industry and our ships specifically. In addition, these and any other events which impact

the travel industry more generally may negatively impact our guests’ and/or crew’s ability or desire to travel

to or from our ships and/or interrupt the supply of critical goods and services.

Examples of how we manage and/or mitigate this risk:

• We provide training to team members related to their job responsibilities to ensure understanding of

and compliance with our policies and procedures

• We have developed robust health and safety protocols and mitigation strategies designed to prevent

the spread of disease on our ships

• We report health, environmental, safety and security incidents and take appropriate action, including

conducting investigations, to reduce the risk of recurrence

• We have appropriate policies that govern, encourage and reinforce the right behavior

• We have communications programs to help mitigate the adverse impacts of publicity

• We promote a culture that encourages team members to speak up about concerns and opportunities

which are addressed appropriately

Key stakeholders considered:

• Team members

• Guests and travel agent partners

• Investors and lenders

Changes in and non-compliance with laws and regulations under which we operate, such as those relating

to health, environment, safety and security, data privacy and protection, anti-money laundering, anti-

corruption, economic sanctions, trade protection, labor and employment, and tax may be costly and

have in the past and may, in the future, lead to litigation, enforcement actions, fines, penalties and

reputational damage.

We are subject to numerous international, national, state and local laws, regulations, treaties and other legal

requirements that govern health, environmental, safety and security matters in relation to our guests, crew

and ships. These requirements change regularly, depending on the itineraries of our ships and the ports and

countries visited. Implementing these and any subsequent requirements may be costly and take time to

implement across our global cruise operations. In addition, the accelerating pace of regulatory changes may

affect our ability to comply in the future. If we violate or fail to comply with any of these laws, regulations,

treaties and other requirements we could be, and have previously been, fined, placed on probation or otherwise

sanctioned by regulators. In addition, there is increased global focus on climate change, which may lead to

additional regulatory requirements. Refer to Operational Risk Factor “e.” below for additional discussion on

climate change regulation risks.

We are subject to laws and requirements related to the treatment and protection of personal, sensitive

and/or other regulated data in the jurisdictions where we operate. Various governments, agencies and

regulatory organizations have enacted or are considering new rules and regulations and we expect to continue

to incur costs to comply with these rules and regulations. In the course of doing business, we collect guest,

team member, company and other third-party data, including personal and other sensitive data.

Our operations subject us to potential liability under anti-money laundering and anti-corruption laws and

regulations. We may also be affected by economic sanctions, trade protection laws, policies and other

regulatory requirements affecting trade and investment.

We are subject to compliance with tax laws, regulations and treaties in the jurisdictions in which we are

incorporated or operate. These tax laws, regulations and treaties are subject to change at any time, which

may result in substantially higher tax expense. For example, the OECD’s multi-jurisdictional inclusive

framework is intended to address the tax challenges arising from globalization, which includes the

establishment of a minimum 15% tax rate for multinational enterprises. A number of countries, including

the UK and EU member states, have agreed to adopt the OECD’s minimum tax rules and several countries,

including the UK, have already implemented these rules. The phased implementation of these rules is

expected to begin for our fiscal year 2025, with limited impact for us before 2026. The application of these

rules continues to evolve, and its outcome may alter our tax obligations in certain countries in which we

operate. Other changes in domestic and international tax rules and regulations and their application

could also alter our tax obligations.

Examples of how we manage and/or mitigate this risk:

• We monitor for changes in laws and regulations and changes in interpretation of these laws and

regulations relating to our business. Where necessary, we obtain specialist advice to implement

programs to help ensure compliance

• We have appropriate policies, standards and procedures that encourage and reinforce the right

behavior

• We provide training to team members to ensure understanding of and compliance with our policies,

standards and procedures

• We have a system of internal controls to prevent and/or detect risks and we perform audits and other

evaluations of our control design and performance

• We conduct compliance risk assessments and monitor our own compliance and where incidents

occur, take appropriate action, including conducting investigations, to prevent recurrence

• We promote a culture that encourages team members to speak up about concerns and opportunities

which are addressed appropriately

Key stakeholders considered:

• Communities we serve

• Investors and lenders

Strategic Report

Factors associated with climate change, including evolving and increasing regulations, increasing global

concern about climate change and the shift in climate conscious consumerism and stakeholder scrutiny, and

increasing frequency and/or severity of adverse weather conditions could adversely affect our business.

Growing concerns regarding climate change have resulted in increased global regulatory focus on GHG and

other emissions which may have material impacts on our business. Refer to XIX. Governmental Regulations

for additional discussion of recent developments related to Maritime Regulations, Greenhouse Gas Emissions

and EU Regulations. Fossil fuels are currently the only viable option for our industry and it is not clear

when alternative fuels or other technologies will be commercially viable. To provide a path to net zero

emissions, alternative low GHG emission fuels will be necessary for the maritime industry; however, there are

significant supply challenges that must be resolved before viability is reached. Climate change-related

regulatory activity and developments that require us to reduce our emissions, which includes both the EU

regulations and IMO Strategy (refer to XIX. Governmental Regulations), may individually or collectively

have a material impact on our business and financial results by requiring us to make capital investments in new

equipment or technologies, pay for emissions, purchase carbon offset credits, or otherwise incur additional

costs or take additional actions related to our emissions. Such activity may also impact us indirectly by

increasing our operating costs, including fuel costs. Regulatory developments may also result in the

inability to operate ships that do not meet certain standards, the acceleration of the removal of less

fuel-efficient ships from our fleet and impact the resale value of our ships in the future. In addition, regulatory

developments may restrict or limit our access to certain destinations and/or countries or impact our

freedom to operate. Regulatory efforts, both internationally and in the U.S., are evolving, including the

international alignment of such efforts, and we cannot determine what final regulations will be enacted or

their ultimate impact on our business.

Growing recognition among consumers globally of the negative effects of climate change and the impact of

GHG and other emissions may lead to material changes in consumer preferences. For instance, our guests

may choose a vacation option that they perceive as operating in a manner that is more sustainable for the

climate, seek alternative methods of travel, or reduce the amount and frequency of their travel. In addition,

some environmental focused groups have and may continue to generate negative publicity regarding the

environmental impact of the cruise industry and are advocating for more stringent oversight and regulation

of our industry, including of ship emissions while the ship is docked and at sea. Environmental scrutiny of

our operations and the industry from the investment community, other stakeholders, and the media have

impacted and may continue to impact how we are perceived, which may have a material impact on our

operations and financial results. Certain climate-related actions and investments we make today may not

lead us to our intended future emissions related goals or may not be favorably perceived in future years based

on continuing evolving regulations and perceptions around effective emissions mitigation strategies and

technologies.

Our cruise ships, hotels, land tours, port and related commercial facilities and shore excursions have been

and may continue to be impacted by adverse weather patterns or other natural disasters, such as hurricanes,

earthquakes, floods, fires, tornadoes, tsunamis, typhoons and volcanic eruptions. Climate change is

expected to increase the frequency and intensity of certain adverse weather patterns, possibly making

certain destinations less desirable or impacting our business in other ways. We have been forced to, and in

the future may be forced to, alter itineraries or cancel a cruise or a series of cruises or tours due to these or

other types of disruptions. The physical climate-related risks to our business include increased hurricane/

typhoon intensity and frequency, increases in global temperatures and rising sea levels which may adversely

impact our shoreside facilities, our investments in ports or the availability or desirability of ports and

destinations in which we operate. These effects may also disrupt the supply of critical goods and services to

our facilities and ships. Any of these events could have a material impact on our business and profitability.

Examples of how we manage and/or mitigate this risk:

• We continue to assess alternative lower GHG emission fuel options and technology and invest

strategically in energy efficiency improvements considering our financial modeling and analysis

• We monitor for changes in laws and regulations and changes in interpretation of these laws and

regulations relating to our business. Where necessary, we obtain specialist advice to implement

programs to help ensure compliance

• We provide training to team members related to their job responsibilities to ensure understanding of

and compliance with our policies and procedures

• We monitor weather conditions and have the ability to change our ship itineraries to avoid adverse

weather or regions impacted by adverse weather or in preparation of or response to significant climate

change impacts to particular regions

• We partner with key organizations and stakeholders on research and development to support GHG

emissions reduction efforts

• We have a CCO and CEO who is responsible for the oversight of climate-related matters and reports

to the Boards of Directors

Key stakeholders considered:

• Communities we serve

• Guests and travel agent partners

• Investors and lenders

Inability to meet or achieve our targets, goals, aspirations, initiatives, and our public statements and

disclosures regarding them, including those that are related to sustainability matters, may expose us to

risks that may adversely impact our business.

We have developed and will continue to establish targets, goals, aspirations, and other objectives, including

those related to sustainability matters (“sustainability objectives”). These statements reflect our current plans

and do not constitute a guarantee that they will be achieved. With respect to our sustainability objectives,

our efforts to research, establish, accomplish, and accurately report on these objectives expose us to numerous

operational, reputational, financial, legal, and other risks, any of which could have a negative impact on

our business. Our ability to achieve any of our stated sustainability objectives, particularly with respect to

our environmental emissions aspirations, is subject to numerous factors and conditions, many of which are

outside of our control. Examples of such factors include the availability and costs of low- or non-GHG

emission energy sources and technology, evolving regulatory requirements affecting sustainability standards

or disclosures, the availability of future financing and the availability of suppliers that can meet our

sustainability standards.

Our business may face increased scrutiny from our guests, our team members, the investment community,

governments, regulators, destinations and other stakeholders that we serve related to our sustainability

activities, including the sustainability objectives that we adopt, our methodologies and timelines for pursuing

them and our ability to document and support the achievement of those objectives. If our sustainability

practices do not meet, or are perceived to fall short of, the expectations of our guests, team members, investors

or other stakeholders, demand for cruising, our reputation, our ability to attract or retain team members,

and our attractiveness as an investment could be negatively impacted. In addition, governments may restrict

or limit our access to ports and destinations for which there is high guest demand. Similarly, our failure or

perceived failure to pursue, meet or fulfill our targets, goals, aspirations, and other objectives (including

sustainability objectives) within the timelines we announce, or at all, could have the same negative impacts

as well as expose us to government enforcement actions and private litigation.

Strategic Report

Examples of how we manage and/or mitigate this risk:

• We continue to make investments in technology related to our sustainability initiatives

• We provide training to team members related to their job responsibilities to ensure understanding of

and compliance with our policies and procedures

• We incentivize meeting our targets and goals (including our sustainability objectives) through

compensation

• We have HESS policies in place that govern our approach to sustainability

• We partner with key organizations and stakeholders on research and development to support GHG

emissions reduction efforts

• We develop financial forecasts and continuously monitor our financial performance in order to make

timely strategic decisions

• We promote a culture that encourages team members to speak up about concerns and opportunities

which are addressed appropriately

Key stakeholders considered:

• Communities we serve

• Guests and travel agent partners

• Investors and lenders

Breaches in data security and lapses in data privacy as well as disruptions and other damages to our

principal offices, information technology operations and system networks and failure to keep pace with

developments in technology may adversely impact our business operations, the satisfaction of our guests

and crew and may lead to reputational damage.

We have been and may continue to be impacted by breaches in data security and lapses in data privacy,

which occur from time to time. These can vary in scope and intent from motivated driven attacks to malicious

attacks intended to disrupt or compromise our shoreside and shipboard operations by targeting our key

operating systems. Breach or circumvention of our systems or the systems of third parties, including by

ransomware or malware, through vulnerabilities in licensed software or hardware, or as a result of other

attacks, has led to and may continue to lead to disruptions in our business operations; unauthorized access to

(or the loss of company access to) competitively sensitive, confidential or other critical data (including

sensitive financial, medical or other personal or business information) or systems; loss of customers; financial

losses; regulatory investigations, enforcement actions and fines; litigation; reputational damage; and

misuse or corruption of critical data and proprietary information, any of which could be material.

Additionally, we may rely on third parties in helping us to implement and manage our cyber security risk

management processes. Any measures that we take and such third parties take to avoid, detect, mitigate or

recover from material cyber security threats or incidents can be expensive, and may be insufficient,

circumvented, or may become ineffective.

Our offices, information technology operations, system networks and various remote work locations may be

impacted by actual or threatened natural disasters (for example, hurricanes, earthquakes, floods, fires,

tornadoes, tsunamis and typhoons) or other disruptive events. Our maritime and/or shoreside operations,

including our ability to manage our inventory of cabins held for sale and set pricing, control costs and serve

our guests, depends on the reliability of our information technology operations and system networks, as

well as our ability to refine and update to more advanced systems and technologies. In addition, we may be

unable to obtain appropriate technology in a timely manner or at all or we may incur significant costs in doing

so. A failure to adopt the appropriate technology, or a failure, disruption or obsolescence in the technology

that we do adopt, could have adverse effects on our business.

Examples of how we manage and/or mitigate this risk:

• We have policies, standards and procedures that govern data security, data privacy and disaster

recovery

• We provide training to team members to ensure understanding of and compliance with our policies,

standards and procedures related to data security, data privacy and disaster recovery

• We incorporate security and privacy-by-design in the development of new systems and infrastructure

• We actively, and will continue to, invest in cybersecurity, talent, new technologies and third party

service providers to enhance our data security and ensure our information technology is sufficient for

the operation of our business

• We monitor and test our own ability to detect and respond to an incident which could cause a

breach in data security, lapse in data privacy or natural disaster and where incidents occur, take

appropriate remedial action

• We continue to align our technology planning, infrastructure, security, data privacy and applications

to maximize the business value of our information technology investments

Key stakeholders considered:

• Team members

• Guests and travel agent partners

• Investors and lenders

The loss of key team members, our inability to recruit or retain qualified shoreside and shipboard team

members and increased labor costs could have an adverse effect on our business and results of operations.

Our success depends, in large part, on the skills and contributions of our team members, and on our ability

to recruit, develop and retain high quality, diverse team members. We may not be successful in recruiting,

developing or retaining key or other highly qualified team members. In addition, high-GHG emission

industries may become a less attractive employment opportunity. At times we have and may in the future

experience difficulty in hiring sufficient qualified team members, due to general macroeconomic factors

and/or increasingly competitive labor markets.

In addition, we hire a significant number of qualified shipboard team members each year and, thus, our

ability to adequately recruit, develop and retain these individuals is critical to our success. Incidents involving

cruise ships, including disease outbreaks on our ships and increasing demand as a result of the industry’s

projected growth could negatively impact our ability to recruit, develop and retain sufficient qualified

shipboard team members.

Examples of how we manage and/or mitigate this risk:

• We have programs to attract, develop and retain top talent and use team member feedback tools to

monitor team members’ perspectives and take appropriate actions

• We provide training to continue the development of our team members related to their job

responsibilities and to ensure understanding of and compliance with our policies and procedures

• We provide total compensation that allows us to be competitive in the labor markets in which we

operate

• We continue to expand the number of countries from which we recruit our team members

• We promote a culture that encourages team members to speak up about concerns and opportunities

which are addressed appropriately

Key stakeholders considered:

• Team members

• Guests and travel agent partners

• Investors and lenders

Strategic Report

Increases in fuel prices, changes in the types of fuel consumed and availability of fuel supply may adversely

impact our scheduled itineraries and costs.

We have been and may continue to be impacted, by economic, market and political conditions around the

world, regulatory requirements including climate-induced regulations, supply disruptions and related

infrastructure needs, which make it difficult to predict the future price and availability of fuel. The supply

and availability of different fuel types in various markets in which we operate have experienced increased

volatility and have led to increased fuel prices and reduced profitability. Future increases in the global price of

fuel would increase the cost of our cruise ship operations as well as some of our other expenses, such as

crew travel, freight and commodity prices. Increases in airfares, such as those resulting from increases in the

price of fuel, would increase our guests’overall vacation costs and could reduce demand for cruises, as

many of our guests depend on airlines to transport them to or from the airports near the ports where our

cruises embark and disembark. Refer to Operational Risk Factor “e.” for additional discussion on the impact

of climate change and regulation changes on fuel costs.

Examples of how we manage and/or mitigate this risk:

• We manage fuel consumption through ship maintenance and operating practices

• We optimize itineraries through our itinerary planning reviews and have the ability to change

itineraries to reduce fuel consumption

• We research and implement innovative technologies to reduce fuel consumption

• We are adding new, more fuel-efficient ships to our fleet and have removed smaller, less fuel-efficient

ships

• We enter into supply agreements to help ensure availability and seek alternative sources if necessary

• We are upgrading our fleet with more energy efficient technologies

• Our LNG ships are all dual fuel and can use MGO

• We have the ability to purchase fuel in different ports we visit

Key stakeholders considered:

• Communities we serve

• Guests and travel agent partners

• Investors and lenders

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

service providers may be unable to deliver on their commitments, which could negatively impact our business.

We rely on supply chain vendors to deliver key products to the operations of our businesses around the world.

Any event impacting a vendor’s ability to deliver quality goods at the location and time needed could

negatively impact our ability to operate our business. Events impacting our supply chain could be caused by

factors beyond the control of our suppliers or us, including labor actions, increased demand, problems in

production or distribution and/or disruptions in third-party logistics, information technology or

transportation systems. In addition, global events in recent years have resulted in widespread global supply

chain disruptions to vendors including critical supply chain shortages, labor shortages, significant material

cost inflation and extended lead times for items that are required for our operations. Any such interruptions

to our supply chain could increase our costs and could limit the availability of products critical to our

operations.

Examples of how we manage and/or mitigate this risk:

• We enter into supply agreements to help ensure availability and seek alternative sources if necessary

• We have extended our demand planning and are placing purchase orders earlier to compensate for

current extended lead times

• We utilize substitute products where appropriate

• We leverage our enterprise scale through corporate-wide agreements and our supplier relationships

• We source locally to mitigate logistics costs and delays

• We utilize short-term or long-term contracts as needed

Key stakeholders considered:

• Team members

• Guests and travel agent partners

• Investors and lenders

Fluctuations in foreign currency exchange rates may adversely impact our financial results.

We earn revenues, pay expenses, purchase and own assets and incur liabilities in currencies other than the

U.S. dollar. Additionally, our shipbuilding contracts are typically denominated in euros. Movements in foreign

currency exchange rates, which have recently been more volatile, will affect our financial results.

Examples of how we manage and/or mitigate this risk:

• We net certain exposures to take advantage of natural offsets with our business and continuously

evaluate the use of financial instruments

• We consider and may hedge certain of our ship commitments and net investments in foreign

operations

• We sell/buy foreign currencies throughout the year to manage the economic impact of foreign

currency exchange volatility

• We adjust our procurement activities

Key stakeholders considered:

• Investors and lenders

Overcapacity and competition in the cruise and land-based vacation industry may negatively impact our

cruise sales, pricing and destination options.

We may be impacted by increases in capacity in the cruise and land-based vacation industry, which may

result in capacity growth beyond demand, either globally or for a region, or for a particular itinerary. We face

competition from other cruise brands on the basis of overall experience, destinations, types and sizes of

ships and cabins, travel agent partner preferences and value. We also compete with land-based vacation

alternatives throughout the world on the basis of overall experience, destinations and value. In addition,

certain ports and destinations have faced a surge of both cruise and non-cruise tourism and in certain

destinations, countermeasures to limit the number of tourists have been contemplated and/or put into effect,

including proposed limits on cruise ships and cruise guests. Potential restrictions in ports and destinations

could limit the itinerary and destination options we can offer our guests going forward.

Examples of how we manage and/or mitigate this risk:

• We have the ability to change our itineraries to alternative regions of the world

• We offer a wide variety of brands, itineraries, products and services to our guests

• We work alongside government and local regulators to ensure compliance with limitations placed on

tourism

Key stakeholders considered:

• Communities we serve

• Guests and travel agent partners

• Investors and lenders

Strategic Report

Inability to implement our shipbuilding programs and ship repairs, maintenance and refurbishments may

adversely impact our business operations and the satisfaction of our guests.

There are a limited number of shipyards with the capability and capacity to build, repair, maintain and/or

upgrade our ships, which may limit our ability to meet our capacity growth objectives. In addition, we may be

impacted by unforeseen events, such as work stoppages, supply chain issues, insolvencies, “force majeure”

events or other financial difficulties experienced by shipyards, their subcontractors and our suppliers. This

may result in less shipyard availability resulting in delays or preventing the delivery of our ships under

construction and/or the completion of the repair, maintenance or refurbishment of our existing ships. This

may lead to potential delays or cancellations of cruises. Additionally, the prices of various commodities that

are used in the construction of ships and for repair, maintenance and refurbishment of existing ships, such

as steel, are subject to volatility which may increase our costs.

Examples of how we manage and/or mitigate this risk:

• Our newbuild contracts are fixed price and are not sensitive to cost fluctuations of materials,

including steel

• We ensure access and priority for ship repairs as part owners and part of the governance teams of

two shipyards

• We require shipyards to obtain insurance

• Shipbuilding contracts include a combination of refund and performance guarantees

• Pricing for ship repair yards, subcontractors and required materials are agreed in advance of

scheduled dry-docks

Key stakeholders considered:

• Guests and travel agent partners

• Investors and lenders

Financial Risk Factors

We require a significant amount of cash to service our debt and sustain our operations. Our ability to

generate cash depends on many factors, including those beyond our control, and we may not be able to

generate cash required to service our debt and sustain our operations.

Our ability to meet our debt service obligations, refinance our debt or sustain our business needs and

operations depends on our future operating and financial performance and our ability to generate cash.

This will be affected by our ability to successfully continue to execute on our business strategy, which if

unsuccessful, would negatively impact the occupancy levels and pricing of our cruises. Our future performance

is also impacted by general macroeconomic, financial, geopolitical, competitive, regulatory and other

factors beyond our control such as inflation, higher fuel prices, higher taxes and higher interest rates. If we

cannot generate sufficient cash to meet our debt service obligations or fund our other business needs, we may,

among other things, need to refinance our debt, obtain additional financing, delay planned capital

expenditures or sell assets. We cannot make assurances that we will be able to generate sufficient cash

through any of the foregoing. If we are not able to refinance our debt, obtain additional financing or sell

assets on commercially reasonable terms or at all, we may not be able to satisfy our obligations with respect

to our debt. Refer to Liquidity, Financial Condition and Capital Resources.

Examples of how we manage and/or mitigate this risk:

• We have put in place various strategies and initiatives, including increasing our marketing and

advertising programs in efforts to drive incremental demand for cruising

• We manage our liquidity, including repaying and refinancing future debt maturities to extend

maturity dates and reduce interest expense, managing our costs and can reduce our capital expenditures

and operating expenses, as appropriate

• We have suspended the payment of dividends on, and the repurchase of, Carnival Corporation

common stock and Carnival plc ordinary shares, except pursuant to the Stock Swap Program

Key stakeholders considered:

• Investors and lenders

Our substantial debt could adversely affect our financial health and operating flexibility.

We have a substantial amount of debt, significant debt service obligations and related covenant restrictions.

Despite our leverage, we may incur more debt, subject to certain restrictions, in the future. Our substantial

debt has had and could continue to have important negative consequences for us. Our substantial debt could,

among other things:

• require us to dedicate a large portion of our cash flow from operations to service debt and fund

repayments on our debt, thereby reducing the availability of our cash flow to fund working capital,

capital expenditures and other general corporate purposes;

• increase our vulnerability to adverse general economic or industry conditions;

• limit our flexibility in planning for, or reacting to, changes in our business or the industry in which

we operate;

• limit our ability to pay dividends or distributions on or redeem or repurchase capital stock and make

other restricted payments;

• place us at a disadvantage compared to others that have less debt;

• make us more vulnerable to downturns in our business, the economy or the industry in which we

operate;

• limit our ability to raise additional debt or equity capital in the future to satisfy our requirements

relating to working capital, capital expenditures, development projects, strategic initiatives or other

purposes;

• restrict us from introducing new technologies or exploiting business opportunities;

• make it difficult for us to satisfy our obligations with respect to our debt; and

• expose us to the risk of increased interest rates as certain of our borrowings are (and may be in the

future) at a variable rate of interest.

Certain of our indebtedness accrues interest at variable rates, which subjects us to interest rate volatility

with respect to such instruments and could cause our debt service obligations to increase significantly. If we

breach the covenants or restrictions in our debt instruments, we could be in default under the terms of

certain of our debt instruments and may be required to seek covenant amendments or the relevant creditors

could elect to declare the debt, together with accrued and unpaid interest and other fees, if any, immediately

due and payable (or cancel any unfunded commitments, if applicable) and proceed against the collateral, if

any, securing that debt. Borrowings under our other debt instruments that contain cross-default provisions

may also be accelerated or become payable on demand, and our assets may not be sufficient to repay such

indebtedness in full.

Examples of how we manage and/or mitigate this risk:

• We manage our liquidity, including repaying and refinancing future debt maturities to extend

maturity dates and reduce interest expense, managing our costs and can reduce our capital expenditures

and operating expenses, as appropriate

• In the past, we have accessed capital through various equity offerings

• We actively manage our debt portfolio and use interest rate swap agreements to manage the risk of

increasing interest rates

• We monitor our covenant compliance and would seek to obtain relevant financial covenant

amendments or waivers, if needed

Key stakeholders considered:

• Investors and lenders

Strategic Report

Going Concern Confirmation and Viability Statement.

The Boards of Directors consider that, within the DLC arrangement, the most appropriate presentation of

Carnival plc’s going concern and viability is by reference to the consolidated liquidity position of Carnival

Corporation & plc. Under the terms of the DLC arrangement, Carnival Corporation and Carnival plc are

permitted to transfer assets between the companies, make loans to or investments in each other and otherwise

enter into intercompany transactions. In addition, the cash flows and assets of one company are required

to be used to pay the obligations of the other company, if necessary. Amounts owed between Carnival

Corporation and Carnival plc do not have a stated maturity date, as the two companies operate as a single

economic enterprise. Accordingly, this going concern confirmation and viability statement presents

Carnival Corporation & plc.

Going Concern Assessment

The Boards of Directors have assessed the prospects of Carnival Corporation & plc over an assessment

period of at least the next twelve months from the date of approval of the financial statements as required

by the UK Corporate Governance Code.

During 2023, management and the Directors remained focused on the business’return to profitability and

the operating performance of its cruise brands. In addition, they continue to take appropriate actions to

manage Carnival Corporation & plc’s liquidity, including pursuing various opportunities to refinance

future debt maturities to extend maturity dates and reduce interest expense by repaying some of our existing

indebtedness.

In performing their going concern assessment, the Boards of Directors have considered the circumstances

likely to impact Carnival Corporation & plc during the coming year, current and expected operating

performance of its brands, current liquidity, projected compliance with financial covenants (refer to

Note 14 — “Debt and Interest Expense”for additional details on covenant compliance) and estimates of

future liquidity. The Directors have considered the following assumptions used to estimate Carnival

Corporation & plc’s future liquidity:

• Expected increases in revenue in 2024 as compared to 2023

• Expected continued prepayment of debt

• Fuel prices at or around November 2023 year-end prices

• Continued stabilization of inflationary pressures on costs compared to 2023

In addition, the Directors make certain assumptions about new ship deliveries, improvements and removals,

and consider the future export credit financings that are associated with the new ship deliveries.

The Directors do not consider going concern to be a critical judgement for the year ended November 30,

2023. In determining that going concern is not a critical judgement, the Directors have considered:

• As of November 30, 2023, $5.4 billion of liquidity including $2.4 billion of cash and cash equivalents

and $3.0 billion of borrowings available under our Revolving Facility, which matures in August 2024,

and $2.1 billion under the New Revolving Facility, which may be utilized beginning in August 2024,

at which date it will replace the existing Revolving Facility. Refer to Note 14 — “Debt and Interest

Expense” for additional discussion.

• The return of approximately $800 million of credit card reserves during the first quarter of 2024,

representing substantially all of the reserve funds as of November 30, 2023

• Continued positive trajectory of the business generating operating cash flows $4.3 billion in 2023

and expected continued growth in 2024

• $3.0 billion of undrawn export credit facilities to fund ship deliveries planned through 2025

• Known financial commitments including debt maturities of approximately $2.1 billion and other

material cash requirements and obligations over the assessment period

Management has considered a severe but plausible scenario which assessed the effects of lower than

expected revenues and adjusted EBITDA, as compared to the base case. In this downside case, management

modeled a 5.5% decrease in cruise revenues (less its most variable costs and on a per unit basis) during the

period under review as compared to the base case. Even in this scenario, the assessment still demonstrated

Carnival Corporation & plc’s ability to meet its obligations over the going concern period and remain in

compliance with its financial covenants. As a result of this assessment, management along with the Boards

of Directors have concluded that it remains appropriate to adopt the going concern basis of accounting in

preparing the Carnival plc consolidated financial statements without any material uncertainty.

Going Concern Statement

In adopting the going concern basis for preparing these financial statements, the Directors have considered

Carnival Corporation & plc’s business activities, together with factors likely to affect its future development

and performance. After reviewing the current liquidity position, the operating performance of the cruise

brands, financial forecasts, and considering the results of various downside scenarios, the Boards of Directors

have concluded that Carnival Corporation & plc has sufficient liquidity to satisfy its obligations and are

forecasted to be in compliance with its debt covenants for at least the next twelve months from the approval

of the financial statements. Accordingly, the Directors continue to adopt the going concern basis without

any material uncertainty in preparing the Carnival plc consolidated IFRS financial statements.

Viability Assessment

Whilst the Boards of Directors have no reason to believe Carnival Corporation & plc will not be viable over

a longer period, the period over which they considered viability is three years. The principal reasons why

this period was selected are as follows:

• It aligns with management’s typical strategic planning cycle

• Management typically plans its guest sourcing and ship itinerary strategies over a two-to-three-year

horizon

In performing their viability assessment, the Boards of Directors have considered that Carnival Corporation &

plc has a substantial debt balance incurred during the pause in guest cruise operations and requires a

significant amount of liquidity or cash provided by operating activities to service its debt. In addition, the

Directors considered the circumstances impacting Carnival Corporation & plc during the year, current and

expected operating performance of its brands, current liquidity and projected compliance with financial

covenants. The Directors also considered Carnival Corporation & plc’s access to capital markets (when or

if needed), including its ability to refinance future debt maturities and expected ability to obtain financial

covenant amendments or waivers (when or if needed).

In performing their assessments, the Boards of Directors highlighted forecast uncertainty during the

viability period. Uncertainty exists over future forecasts caused by the continued effects of inflation, volatile

fuel prices, higher environmental regulatory costs, higher taxes, higher interest rates, and fluctuations in

foreign currency. These items may be further amplified by Carnival Corporation & plc’s substantial debt

balance. Given the significant collective impacts of these items on the business, management has prepared

various planning scenarios using a range of potential outcomes and assumptions.

Management has identified the following critical assumptions and judgements as part of its viability

assessment (“base case”):

• Ability to obtain additional financial covenant waivers or amendments, when or if needed. Refer to

Note 14 — “Debt and Interest Expense”for additional details on covenant compliance

• Ability to access capital markets when or if needed including its ability to refinance future debt

maturities

• Continued improvement in its financial results

The base case also includes the following other assumptions used to estimate future liquidity:

• Expected increases in revenue as compared to 2023

• Expected continued prepayment of debt

• The return of approximately $800 million of credit card reserves during the first quarter of 2024,

representing substantially all of the reserve funds as of November 30, 2023

• Expected increases in fuel costs including the cost of EUAs (at the mid December price)

• Continued stabilization of inflationary pressures on costs compared to 2023

• Anticipated direct and indirect impacts of climate change including costs associated with related

regulations

• Expected impact of the OECD’s global minimum tax

In addition, the Directors make certain assumptions about new ship deliveries, improvements and removals

and consider the future export credit financings that are associated with the new ship deliveries.

Strategic Report

As part of their viability assessment, management along with the Boards of Directors, considered various

scenarios and sensitivity analyses. As a severe but plausible scenario, they considered the effects of lower than

expected revenues and adjusted EBITDA, as compared to the base case. In this downside case, management

modeled a 5.5% decrease in cruise revenues (less its most variable costs and on a per unit basis) during the

viability period as compared to the base case. Management also considered various other scenarios, which

were consistent with the principal risks identified in Item 4. “Risk Management and/or Mitigation of Principal

and Emerging Risks,”and assessed the impact on its liquidity and covenant headroom. In addition to

these scenarios, while making their final conclusion on viability, which is summarized below, the Boards of

Directors considered its $5.4 billion of liquidity including $2.4 billion of cash and cash equivalents and

$3.0 billion of borrowings available under our Revolving Facility at November 30, 2023, which matures in

August 2024, and $2.1 billion under a New Revolving Facility, which may be utilized beginning in August 2024,

at which date it will replace the existing Revolving Facility. The termination date of the New Revolving

Facility is August 6, 2025, subject to two, mutual one-year extension options. Refer to Note 14 — “Debt

and Interest Expense” for additional discussion.

Viability Statement

Having undertaken their robust assessment as described above, including a review of their principal risks,

risk appetite and how these risks are managed or mitigated, the Boards of Directors have a reasonable

expectation that Carnival Corporation & plc will be able to continue in operation and satisfy its obligations as

they fall due over the three-year period of their assessment. In making this statement, the Boards of

Directors highlight forecasting uncertainty concerning the impact of the continued effects of inflation,

volatile fuel prices, higher environmental regulatory costs, higher taxes, higher interest rates, and fluctuations

in foreign currency in the three-year plan. The full extent of the collective impact of these items is uncertain

and may be amplified by Carnival Corporation & plc’s substantial debt balance.

In addition, the Directors have identified the critical assumptions and judgements they have exercised in

performing their assessment: ability to obtain additional financial covenant waivers or amendments, when

or if needed, ability to access capital markets when or if needed including its ability to refinance future debt

maturities as well as the continued improvement in its financial results.

The Boards of Directors believes they have made reasonable estimates, assumptions and judgements in

determining its liquidity requirements and cannot make assurances that assumptions used may not change

in future periods. Refer to Carnival Corporation & plc’s Liquidity, Financial Condition and Capital Resources

section for further discussion.

Non-Financial and Sustainability Information Statement.

Refer to the sections below for more information relating to non-financial and sustainability matters, as

required by sections 414CA and 414CB of the Companies Act 2006.

Description of Business Model:

• II. Purpose & Mission, Vision, Values and Priorities on page 2

• C. Our Global Cruise Business on page 5

Environmental Matters:

• XX. Sustainability and Environmental Impact on page 21 which includes:

• Sustainability goals progress

• Summary of our environmental impact

• Climate-related Financial Disclosures

• Annex A — Carnival plc Directors’ Report of the Proxy Statement: Corporate and Social

Responsibility on page A-8

Team members:

• XIV. Human Capital Management and Employees on page 11

• XX. Sustainability and Environmental Impact: 2030 Diversity, Equity and Inclusion goals on

page 24

• Annex C — Carnival plc Corporate Governance Report of the Proxy Statement: Workforce

Engagement on page C-15

Human Rights:

• II. Purpose & Mission, Vision, Values and Priorities on page 2

• XV. Ethics and Compliance on page 12

• XX. Sustainability and Environmental Impact: 2030 Good Health and Well-Being Goals on page 23

• Annex A — Carnival plc Directors’ Report of the Proxy Statement: Corporate and Social

Responsibility on page A-8

Anti-corruption and Anti-bribery:

• XIX. Governmental Regulations on page 16

• H. Executive Officers and Corporate Governance on page 42

• Item 4. Risk Management and/or Mitigation of Principal and Emerging Risks on page 52

• Annex C — Carnival plc Corporate Governance Report of the Proxy Statement: Hotline for

Reporting Concerns on page C-20

Social and Community Matters:

• II. Purpose & Mission, Vision, Values and Priorities on page 2

• XX. Sustainability and Environmental Impact: 2030 Sustainable Tourism Goals on page 23

• XX. Sustainability and Environmental Impact: 2030 Biodiversity and Conservation Goals on

page 24

• Annex A — Carnival plc Directors’ Report of the Proxy Statement: Corporate and Social

Responsibility on page A-8

Policy Embedding, Due Diligence and Outcomes:

• Item 3. Internal Control and Risk Assessment on page 51

• Item 5. Going Concern Confirmation and Viability Statement on page 64

• Annex C — Carnival plc Corporate Governance Report of the Proxy Statement: Committees of the

Board on page C-6

Principal Risks and Impact of Business Activity:

• Item 4. Risk Management and/or Mitigation of Principal and Emerging Risks on page 52

Non-Financial Key Performance Indicators:

• XX. Sustainability and Environmental Impact: Summary of our Environmental Impact on page 27

• Item 2. Business Review Statistical Information on page 44

Section 172(1) Statement.

This statement describes how the Directors have performed their duty in the way they consider, in good

faith, would most likely promote the success of the company for the benefit of its members as a whole having

regard to the stakeholders and matters set out in section 172(1)(a)-(f) of the Companies Act 2006. This

statement sets out the Directors’approach to decision-making, stakeholder engagement and details the

matters considered as part of the decision-making process of some of the key decisions made during 2023.

To provide further insight, we have provided clear cross-referencing to where more detailed information can

be found in this Annual Report.

Discussions between management and the Directors regarding decisions relating to our business strategy,

including the potential impact of those decisions on our financial results, decisions relating to our capital

structure and other business-related activities also include careful consideration of potential risks associated

with those decisions. In addition, as part of our risk assessment framework, our key stakeholders are

considered as part of the evaluation of our principal and emerging risks. Refer to Item 4. Risk Management

and/or Mitigation of Principal and Emerging Risks on page 52 for additional discussion of our risks and

key stakeholder considerations.

Strategic Report

During 2023, the Directors’oversight of stakeholder relationships and other matters was informed by

regular briefings by management and its Committees on our liquidity, the operating performance of our

brands, compliance with laws and regulations, our sustainability performance, principal and emerging risks

including those related to climate change, cybersecurity and other critical matters.

Key Stakeholders

The Directors and their Committees recognize the strategic importance of building and maintaining strong

relationships with our stakeholders. We have identified the following key stakeholders considering their

impact on the success of our business model and strategy:

• Communities we serve

• Team members

• Guests and travel agent partners

• Investors and lenders

When making decisions, the Directors have regard to the interests of our key stakeholders and recognize

that effective engagement with our stakeholders is essential to the long-term success of our business. The

Directors consider many factors and balance competing interests in reaching strategic decisions. Refer to the

discussion within Key Decision Made by the Directors During the Year below for an example of the

Directors considerations.

While the Directors are able to engage directly with key stakeholders on some issues, the size and distribution

of our stakeholder group means that stakeholder engagement often happens through management. The

Directors regularly receive information and feedback from management to help understand how our

operations and decisions affect our stakeholders’interests and in turn, how those interests should impact

future decisions.

a) the likely consequences of any decision in the long-term

The Directors recognize that the decisions made today will have an effect on both our short- and long-term

success. The Directors seek to balance meeting critical short-term objectives while also carefully ensuring

we are on course to achieve our long-term strategic vision. During 2023, the Directors and executive

management had particular regard to our long-term success and remained focused on our return to

profitability, the operating performance of our cruise brands, accelerating our debt repayment and refinancing

efforts and managing our interest expense, while at the same time demonstrating prudent stewardship of

capital. The Directors believe that returning to strong profitability and strengthening our balance sheet will

help preserve and grow value for each of our key stakeholders.

The Directors also believe that planning for succession is an important function that will impact our

long-term success. We continually strive to foster the professional development of management and our

team members. As a result, we have developed a very experienced and strong group of leaders, with their

performance subject to ongoing monitoring and evaluation, as potential successors to our senior management,

including our CEO.

Refer to:

• II. Purpose & Mission, Vision, Values and Priorities on page 2

• XIV. Human Capital Management and Employees on page 11

• XX. Sustainability and Environmental Impact on page 21

• Item 5. Going Concern Confirmation and Viability Statement on page 64

b) the interests of our team members

We celebrate our diverse team and are committed to providing a welcoming and inclusive environment

where people from different backgrounds, experiences and walks of life can succeed. We care deeply for our

team members and must always cultivate an atmosphere of openness, respect and trust. We continue to

focus on our Culture Essentials, which are the key actions and behaviors we encourage and reinforce to further

strengthen our culture. We have pulse surveys, which we use to track company culture, measure change

over time and obtain team member feedback. The results of the surveys are communicated to management

and the Directors. Further, in 2023 with the full support of the Directors, we continued our initiatives

designed to engage with and care for our workforce. Key areas of focus include Outreach & Wellness, Culture

and Staffing. The Directors consider and assess the implications of their decisions on our people.

Refer to:

• II. Purpose & Mission, Vision, Values and Priorities on page 2

• XIV. Human Capital Management and Employees on page 11

• XV. Ethics and Compliance on page 12

• Workforce Engagement on page C-15 in Annex C — Carnival plc Corporate Governance Report of

the Proxy Statement

• Key Decision Made by the Directors During the Year on page 71

c) the need to foster our business relationships with guests and travel agent partners, suppliers and others

Guests and Travel Agent Partners

Guest feedback and research supports the development of our overall strategies to exceed our guests’

expectations and at the same time, drive demand for cruises and increase the number of first-time cruisers.

We measure and evaluate guest satisfaction with our products and services through our net promoter scores

(“NPS”), which provides valuable insight into our guests’cruise experiences and drivers of guest loyalty.

Our NPS take into account a number of products and services our brands offer including; embarkation and

disembarkation experiences, shipboard team member service, dining options, entertainment and onboard

activities. NPS reflects the likelihood that our guests will recommend our brands’ cruise products and services

to friends and family, including those who have not cruised before. Evaluating our NPS results provides

our management with invaluable information necessary to inform important strategic decisions regarding

our product offerings. To reward loyal and repeat guests, substantially all of our cruise brands offer past

recognition programs with various special incentives.

Strong relationships with our travel agent partners are also an integral part of our long-term cruise

distribution network and are critical to our success. We utilize local sales teams to motivate travel agents to

support our products and services with competitive pricing, promotional policies and joint marketing and

advertising programs. All of our brands have internet booking engines to allow travel agents to book our

cruises.

Suppliers

Our relationships with suppliers are key to our business in providing critical goods and services, which are

paramount in our ability to deliver exceptional cruise experiences to our guests. Our suppliers provide a range

of goods from materials to support the refurbishment and enhancements of our ships and to build new

and innovative ships to the reliable and consistent supply of fuel as well as food and beverage globally. All

while maintaining our quality standards. We aim to engage with suppliers to build mutually beneficial

relationships and to create strategic partnerships across our global organization, utilizing preferred supplier

agreements to underpin such relationships.

We strive to build strong relationships with our suppliers and business partners. Our Business Partner Code

of Conduct and Ethics outlines our expectations and requirements for all our business partners. It also

highlights our commitments related to human rights and forced labor, respectful treatment and equal

opportunity, anti-corruption, environmental protection and sustainability.

Global supply markets and supply chains have been and may continue to be impacted by recent global

events, resulting in shortages, extended lead times and increased inflation impacting our operations and

profitability. While we are experiencing stabilization in a number of supply markets, we continue to apply a

number of different strategies to mitigate the impact of these challenges on our operations, including extending

our demand planning, placing purchase orders earlier to secure supply, leveraging our enterprise scale

through corporate-wide agreements, utilizing short-term or long-term contracts as needed, developing

alternative sources, utilizing substitute products and leveraging our supplier relationships.

Others

Our ships and operations are subject to numerous international, national, state and local laws, regulations,

treaties and other legal requirements, as well as voluntary agreements, which govern health, environmental,

safety and security matters in relation to our guests, crew and ships. We are committed to complying with

all relevant requirements.

Strategic Report

We continue to work closely with governments and regulators, including those of the communities we serve,

as we resume guest cruise operations. We maintain our commitment to seek excellence in compliance,

environmental protection and in looking after the safety, health and well-being of every life we touch.

Refer to:

• II. Purpose & Mission, Vision, Values and Priorities on page 2

• XI. Marketing Activities on page 10

• XII. Sales Channels on page 10

• XIII. Supply Chain on page 11

• XIX. Government Regulations on page 16

• Key Decision Made by the Directors During the Year on page 71

(d) the impact of our operations on the community and the environment

Achieving our purpose & mission depends on being good corporate citizens and stewards of the environment.

Safeguarding the planet we call home, our guests, the communities we serve, and our Carnival family, and

complying with the laws and regulations that govern our business, is vital to our success.

In 2021, with the support of the Directors, we established goals which focused on advancing six critical

sustainability areas — climate action; circular economy; sustainable tourism; good health and well-being;

diversity, equity and inclusion; and biodiversity and conservation. We have made significant progress towards

our 2030 GHG intensity reduction goals of 20% from a 2019 baseline, measured in both grams of CO

per ALB-km and kilograms of CO

e per ALBD. During 2023, we introduced the SEA Change Program, a

set of key performance targets designed to reflect the achievement of important strategic goals over a three-

year period ending in 2026 which includes improving upon the company’s industry leading fuel-efficiency

and pulling forward its stated 2030 GHG intensity reduction by several years. Refer to Key Decision Made

by the Directors During the Year below for additional discussion.