Carnival Corporation ($CCL) Stock Hub 2026: The Bermuda Redomiciliation, Twelve Straight Record Yield Quarters and the Fuel Bill Nobody Hedged

01 What The Second Quarter Actually Showed

Carnival’s fiscal year ends on 30 November, so its second quarter covers the three months to 31 May 2026. The results were released on the morning of 23 June 2026 in an 8-K, and the Form 10-Q followed three days later, on 26 June. That gap matters more than it sounds: almost everything a reader wants to know about demand, bookings and yields exists only in the press release. The 10-Q does not contain the words "net yields", "booked" or "advance booking" at all.

Revenue was $6.663 billion, up 5.3% from $6.328 billion. Passenger ticket revenue rose 4.1% to $4.273 billion and onboard and other revenue rose 7.5% to $2.390 billion. That split is the first thing worth noticing. Onboard spending — drinks packages, shore excursions, casino, wifi, speciality dining — grew almost twice as fast as the ticket, and it now accounts for 35.9% of total revenue. Onboard is the higher-margin half of a cruise line’s income statement and the part most sensitive to how confident the passenger feels once they are already on the ship.

Operating income was $851 million, down 8.9% from $934 million, for an operating margin of 12.8% against 14.8% a year earlier. Those margin percentages are our own arithmetic on published line items; Carnival does not state an operating margin. The decline is almost entirely a fuel story: the fuel line rose 27.1%, from $468 million to $595 million, an increase of $127 million against a revenue increase of $335 million. Depreciation rose $31 million, payroll $59 million and other operating $112 million.

Below the operating line, the deleveraging shows up. Net interest expense fell from $341 million to $285 million, a saving of $56 million in a single quarter, which is what happens when a company retires roughly $19 billion of expensive debt and replaces it with cheaper paper. Income before taxes was $555 million and the tax charge was $17 million.

Adjusted EBITDA was $1.582 billion, up 4.9% and a second-quarter record. Cash from operations in the quarter was $2.629 billion, and $3.893 billion for the first half against $3.317 billion in the prior-year half. Capital expenditure in the half was $1.441 billion, marginally below the $1.458 billion of a year earlier. A business generating $3.9 billion of operating cash against $1.4 billion of capex in six months is, by the standards of the post-pandemic cruise industry, an entirely different animal from what it was three years ago.

02 Executive Summary

Carnival is the largest cruise operator in the world by capacity, with 94 ships and 272,480 lower berths at 31 May 2026 across eight brands. Its own annual report puts the four largest operators — itself, Royal Caribbean, Norwegian and privately held MSC — at approximately 80% of global cruise capacity. Carnival alone is a little over a third of the industry.

The corporate structure changed this year

This is the single most common factual error in anything written about Carnival today. Until May 2026 the group was a dual-listed company: Carnival Corporation, incorporated in Panama and listed in New York as CCL, paired with Carnival plc, incorporated in England and Wales, listed in London and carrying an American depositary share under the ticker CUK. On 7 May 2026 that structure ended. Shareholders approved unification at meetings held on 17 April 2026; Carnival plc holders received one common share of the new entity for each plc share; Carnival plc was delisted, deregistered and became a wholly owned UK subsidiary; and the group is now a single Bermuda-incorporated company, Carnival Corporation Ltd., with one class of common stock listed only on the New York Stock Exchange. Carnival was removed from the FTSE 250, FTSE 350 and FTSE All-Share from the open on 6 May 2026. The ticker CUK no longer exists.

The financial position

Total debt of $24.889 billion against cash of $2.243 billion, with a $4.5 billion undrawn unsecured revolving facility running to June 2030 and a further $10.8 billion of undrawn export credit facilities committed against ship deliveries out to 2033. Net debt to adjusted EBITDA of 3.1x, improved from 3.7x a year earlier and 3.4x at the November year end. Two investment grade credit ratings as of 25 June 2026, which triggered the collateral fall-away on the last tranche of secured notes. A reinstated quarterly dividend of $0.15 and a $2.5 billion buyback authorisation of which more than $450 million had been used by the time the quarter was reported.

The demand picture

Customer deposits reached an all-time high of $9.0 billion, up over $450 million against the prior-year record, on essentially flat forward capacity. The company says it is 93% booked for the year, with less inventory remaining for sale than at the same point a year ago, and that its booking curve is the furthest out on record. It expects record net yields in the second half. For 2027, booking volumes and prices have been running ahead of prior-year levels since March, including a substantial increase for European deployments.

The exposure

No fuel hedging, 35% of 2026 capacity deployed in the Caribbean, roughly 31% in the Mediterranean and the rest of Europe, about 56% of revenue from United States guests, a structural working capital deficit of $8.9 billion created by the customer deposits themselves, an EU Emissions Trading System bill rising from $91 million in 2025 to an expected $170 million in 2026, and a Supreme Court ruling in May that revived a $114 million Helms-Burton judgment the company had already won on appeal.

03 The Guidance That Was Cut And Raised At The Same Time

The June guidance is the most interesting document Carnival published this year, because it moves in two directions at once.

Full-year currency assumptions are a euro at 1.16, sterling at 1.34, the Australian dollar at 0.70 and the Canadian dollar at 0.72.

How the full-year number moved through the year

Why the yield cut happened, in the company’s own words

Chief Executive Josh Weinstein attributed the moderation to "more than a full quarter of extreme geopolitical volatility that primarily impacted booking trends for our European deployments, particularly in the Mediterranean region, which were closest in proximity to the conflict in the Middle East". The important part of the sentence is what came next: "For those deployments, we leaned into the substantial occupancy advantage we had strategically built to deliberately prioritise pricing integrity." Carnival chose to protect price and let occupancy absorb the hit on the affected itineraries, rather than discount into weakness. Whether that was the right call will be visible in the third-quarter yield print, not before.

The sensitivities the company publishes

The medium-term targets

Carnival’s previous programme, SEA Change, set three 2026 goals in June 2023: a 50% increase in adjusted EBITDA per ALBD against the June 2023 guidance baseline, 12% adjusted return on invested capital, and a 20% reduction in carbon intensity against 2019. All three were declared achieved in June 2025, eighteen months early, with EBITDA per ALBD up 52% and adjusted ROIC above 12.5%. Note the baseline: the EBITDA target was measured against the company’s own 2023 guidance, not against 2019. Only the carbon target used a 2019 base.

On 27 March 2026 the successor programme was announced. PROPEL runs to 2029 and commits to return on invested capital above 16%, adjusted earnings per share growth of more than 50% from 2025, distribution of more than 40% of cash from operations to shareholders (approximately $14 billion), net debt to adjusted EBITDA of 2.75x and a greenhouse gas intensity reduction of more than 25% against 2019. There are no published intermediate targets for 2027 or 2028. On 6 August 2026 the emissions element was formalised separately: a 25% intensity reduction by 2029, after the original 2030 goal was reached five years early. The company put the economic value of the associated efficiency gains at approximately $650 million of savings in 2026 alone relative to 2019 levels.

04 Eight Brands, Two Segments And Where The Money Comes From

Carnival reports in two cruise segments, North America and Europe, plus Cruise Support and a small Tour and Other segment that houses the Holland America Princess Alaska land tours. The eight brands, as listed in the results release, are AIDA Cruises, Carnival Cruise Line, Costa Cruises, Cunard, Holland America Line, P&O Cruises, Princess Cruises and Seabourn.

Brand capacity is at 30 November 2025, the last date for which the split is published. One brand that used to be on this list is gone: P&O Cruises Australia closed in March 2025 and was absorbed into Carnival Cruise Line, with Pacific Adventure and Pacific Encounter renamed Carnival Adventure and Carnival Encounter and Pacific Explorer sold. The reporting segment was renamed from "North America and Australia" to "North America" accordingly.

Where the guests come from

In fiscal 2025 the United States produced $14.847 billion of revenue, 55.8% of the total, followed by Germany at $3.348 billion (12.6%) and the United Kingdom at $3.054 billion (11.5%). No other single country exceeded 10%. In the second quarter of fiscal 2026 the United States share was 53.9%. By passenger numbers, the United States and Canada accounted for 8.092 million of 13.627 million guests in fiscal 2025, or 59.4%, with continental Europe at 20.2%, the United Kingdom at 8.1% and Australia and New Zealand at 6.9%.

Where the ships go

Roughly 31% of 2026 capacity sits in the Mediterranean and the rest of Europe. That is precisely the pool that the second-quarter geopolitical disruption hit, and it explains why a regional problem was large enough to move a full-year yield assumption by a whole point.

05 Unit Economics

A cruise line is measured per available lower berth day, abbreviated ALBD: one berth available for one day. Carnival ran 24.7 million ALBDs in the quarter, up 2.0%. Everything else divides into that.

The gap between the two cost lines is the whole story. Cruise costs per ALBD rose 6.0%, but adjusted cruise costs excluding fuel per ALBD were flat. Everything in between is bunker fuel and emission allowances. Carnival held its controllable cost base still in an inflationary year, which is a genuine operating achievement, and then handed the benefit to the fuel market.

Segment occupancy moved in opposite directions. North America was down 1.1 percentage points, worth $27 million of revenue, while Europe was up 1.1 points, worth $17 million. That is not the pattern you would expect from a Mediterranean disruption, and it is a reminder that the European segment brands — AIDA, Costa, P&O UK, Cunard — sell to European guests who did not all react the same way.

The company does not publish a fuel mix. The proportions of heavy fuel oil, marine gas oil and liquefied natural gas do not appear in the filings, and neither does a count of LNG-capable ships in service. Given that the entire order book is LNG-powered, that omission will matter more over time.

06 Balance Sheet, Deleveraging And The Return Of Cash

At 31 May 2026 the face value of Carnival’s debt was $25.570 billion, carried on the balance sheet at $24.889 billion after unamortised issuance costs and discounts of $681 million. Of that, $1.471 billion is current. Cash and equivalents were $2.243 billion, giving net debt of approximately $22.646 billion.

Leverage

Net debt to twelve-month adjusted EBITDA was 3.1x at the quarter end, against 3.7x a year earlier and 3.4x at the fiscal year end. Chief Financial Officer David Bernstein described it as "more than half a point improvement from just one year ago". The PROPEL target is 2.75x by 2029. On the published numbers — $22.646 billion of net debt against roughly $7.34 billion of trailing adjusted EBITDA — the arithmetic checks out at 3.09x.

The debt maturity wall

The next three years are manageable at roughly $8 to $9 billion combined; the concentration is 2028 and 2029. By currency the book splits into $13.337 billion of fixed-rate dollars, $1.311 billion of floating-rate dollars, $8.285 billion of fixed-rate euros and $2.636 billion of floating-rate euros.

What was refinanced

During fiscal 2025 Carnival executed what the chief financial officer described as roughly $19 billion of refinancing in under a year, prepaying $11.6 billion and taking $409 million of extinguishment and modification costs, of which $271 million were call premiums. The highlights: $2.0 billion of 6.125% notes due 2033 issued in February to retire $2.03 billion of 10.375% secured notes, saving over $80 million a year; $1.0 billion of 5.750% notes due 2030 replacing 10.500% paper; $1.0 billion of 5.875% notes due 2031; a €1.0 billion 4.125% issue due 2031; an upsized $3.0 billion 5.750% issue due 2032; $1.25 billion of 5.125% notes due 2029; and a new $4.5 billion unsecured multicurrency revolving facility agreed in June 2025, 50% larger than its predecessor, maturing June 2030 with a $1.0 billion accordion.

In December 2025 the 5.75% convertible notes due 2027 were settled with 69.1 million shares plus $500 million of cash, eighteen million fewer shares than an all-share settlement would have required. There have been no new bond issues in the first half of fiscal 2026.

The investment grade moment

On 25 June 2026 the collateral securing the last tranche of secured paper, the 7.000% first-priority senior secured notes due 2029, fell away automatically on receipt of a second investment grade credit rating. On 5 August 2026 Carnival gave notice that it would redeem those $500 million of notes in full on 15 August at 103.50%. The 8-K confirming the fall-away does not name the rating agencies. Fitch assigned BBB− on 1 October 2025 and S&P Global assigned BBB− on 25 June 2026; Moody’s remains one notch below investment grade at Ba1 with a positive outlook, and the company referred in June to "Moody’s with a credit rating upgrade and a continued positive outlook".

Dividend, buyback and share count

The board reinstated a dividend on 19 December 2025 at $0.15 per share per quarter, first paid on 27 February 2026. Payments of $208 million and $207 million were made in the first two quarters, and the company expects more than $800 million of total distributions in the year. A $2.5 billion buyback authorisation with no expiry was approved on 27 March 2026, but could not begin until after the unification vote on 17 April. By 31 May the company had repurchased 15.1 million shares at an average of $25.85 for $390 million, and by the 23 June release it described "surpassing $450 million in stock repurchases".

Shares issued stood at 1,514 million with 142 million in treasury, and the diluted average for the quarter was 1,388 million. Basic average shares rose 5.3% year on year, from 1,312 million to 1,382 million, almost entirely because of the convertible settlement. The buyback is, at present, running against that dilution rather than on top of it.

Covenants

The revolving facility, unsecured loans and export credit facilities require minimum interest coverage of 3.0 to 1.0, minimum issued capital and consolidated reserves of $5.0 billion, a debt-to-capital ratio not above 65%, and minimum liquidity of $1.5 billion. The interest coverage threshold stepped up from 2.5x at the November 2025 test date to 3.0x from the February 2026 test date. The company states it was in compliance at 31 May 2026, and there is no going concern language anywhere in the filings.

07 Fleet, Order Book And The Private Destinations

Carnival operated 94 ships with 272,480 lower berths at 31 May 2026. There are no ship deliveries in calendar 2026 at all; the most recent was Star Princess, a Sphere-class LNG ship of 4,310 lower berths delivered by Fincantieri at Monfalcone on 26 September 2025. Costa Fortuna, sold to Margaritaville at Sea, is scheduled to leave the fleet in September 2026, which would take the count to 92.

The seven ships under contract at the fiscal year end represent 37,760 lower berths. On 15 April 2026 Carnival added three Voyager class ships for Princess, ordered from Fincantieri at Monfalcone at a stated value of more than €2 billion, each of 183,000 gross tons and around 4,700 guests, dual-fuel and predominantly LNG. They will be the nineteenth, twentieth and twenty-first LNG ships in the group. Carnival Festivale is a 182,015 gross ton LNG ship for Port Canaveral running six and eight day Caribbean itineraries; Carnival Tropicale will be homeported at Galveston.

Capital commitments

The "thereafter" line jumped by $6.6 billion between the fiscal 2025 annual report and the second-quarter filing. That is the Voyager class order arriving on the balance sheet. For the remainder of fiscal 2026 the company guides newbuild capital expenditure of $0.6 billion and non-newbuild of $1.3 billion, the latter cut from $1.8 billion in March and $2.5 billion in the December full-year guidance. Carnival does not publish a non-newbuild capex figure for 2027 or beyond.

The Paradise Collection

Carnival owns or operates seven exclusive destinations: Amber Cove in the Dominican Republic, Celebration Key in the Bahamas, Grand Turk Cruise Center, Isla Tropicale at Roatan, Princess Cays, Puerta Maya at Cozumel and RelaxAway at Half Moon Cay. Together they received 7.4 million guests in 2025 against 6.5 million in 2024, with more than 8 million expected in 2026 and more than 9 million in 2027.

Celebration Key is the centrepiece. It opened on 19 July 2025 on Grand Bahama at a cost of $600 million — approximately $500 million for the original project plus $100 million for a pier extension — across 379 acres, described by the company as the largest project of its kind it has ever undertaken. The pier extension was completed on 29 June 2026, taking simultaneous berthing from two ships to four, all Excel-class compatible, and daily capacity to more than 13,000 guests. That adds roughly 200 ship calls and 700,000 guest arrivals a year. The destination had received more than two million guests by the end of the quarter and 2.4 million by its first anniversary on 19 July 2026, with roughly 3.5 million expected in its second year. Twenty Carnival Cruise Line ships call from ten United States homeports; three and four ship days become routine from September 2026; Princess and AIDA begin calling by the end of 2026, with AIDAluna from November 2027.

RelaxAway, Half Moon Cay completed a new pier on 1 June 2026, allowing two ships alongside for the first time including Excel class, alongside continued tender operations, with capacity up to 12,000 visitors a day and 22 ships calling. Carnival expects approximately 25% of its 2027 Caribbean sailings to visit both Celebration Key and RelaxAway. Isla Tropicale at Roatan opened a 48,000 square foot pool area, Mangrove Bay, on 20 May 2026. A new joint project with ITM Group and Hutchison Ports, Ensenada Bay Village in Mexico, was announced in December 2025 with a combined investment of over $26 million, a build time of around 24 months and capacity for up to 9,000 visitors a day; it is not classified as part of the Paradise Collection and will be open to other lines’ guests.

08 How Carnival Compares With Royal Caribbean And Norwegian

Before the table, one warning. Carnival’s fiscal year ends on 30 November, so its second quarter closed on 31 May. Royal Caribbean and Norwegian close on 31 December, so their second quarters closed on 30 June. The periods are not the same. Carnival’s quarter sits a month earlier and catches a different slice of the summer. On top of that, Carnival measures per ALBD, Royal Caribbean per APCD and Norwegian per Capacity Day, and each company defines adjusted EBITDA slightly differently. Percentage changes are broadly comparable; absolute per-unit levels are not.

Three conclusions come out of that table. Carnival is the biggest and the cheapest per berth, and it is the only one of the three with genuinely flat unit costs. Royal Caribbean is by some distance the most profitable, with an operating margin more than double Carnival’s, and it was the only one to raise full-year guidance. Norwegian is the outlier in the wrong direction, with negative yields, the lowest occupancy and a leverage ratio 2.2 turns above the other two, and it is the only one of the three that no longer publishes a multi-year financial target.

09 What Actually Drives A Cruise Line’s Earnings

Cruise accounting has its own vocabulary, and the vocabulary is where most of the misreading happens.

ALBD, occupancy and capacity

An available lower berth day is one lower berth available for one day. Multiply berths by days in service and you get the denominator for almost every operating metric. Capacity growth is therefore not the same as fleet growth: a ship in dry dock produces no ALBDs. Carnival guides 97.4 million ALBDs and 1.0% capacity growth for fiscal 2026, which is deliberately modest — no ships are being delivered this year.

Net yields

Net yield is adjusted gross margin divided by ALBD: what the company keeps per berth per day after the direct costs of carrying that passenger, principally travel agent commissions, air and other transportation, and the cost of onboard goods sold. It is the cruise industry’s equivalent of an airline’s PRASM, and it is the number that moves the share price. Carnival reported $208.69 in the quarter, or $204.57 in constant currency, up 2.2% and the twelfth consecutive quarterly record.

Net cruise costs excluding fuel per ALBD

Everything else the ship costs to run, per berth per day, with fuel taken out because fuel is not controllable. Holding this figure flat while wages, food and port fees inflate is the core operating discipline of the business, and it is what Carnival did this quarter.

Customer deposits and the booking curve

Cruises are sold far in advance and paid for in stages, so a cruise line collects cash long before it recognises revenue. That produces two things: a large customer deposit balance on the liability side of the balance sheet — $9.0 billion here — and a structural working capital deficit, $8.9 billion in Carnival’s case, that would look alarming in almost any other industry and is entirely normal in this one. The booking curve is how far ahead the ships are sold. A longer curve means more revenue visibility and more pricing power, because the operator is not forced to discount into a near-term hole. Carnival says its curve is the furthest out on record and that it is 93% booked for the year.

Why fuel matters more here than almost anywhere

Fuel was $595 million against operating income of $851 million. A cruise ship is a floating hotel that also has to move, and the moving part is priced daily in a commodity market. An operator that hedges converts that volatility into a known cost. An operator that does not, as Carnival does not, keeps the upside when bunker falls and takes the full hit when it rises. In this quarter it rose 29.2%.

10 Risks And Red Flags

No fuel hedging at all

The 10-Q states the position plainly: "We manage our exposure to fuel price risk by managing our consumption of fuel." There is no derivative book. The term "fuel derivative" last appeared in a Carnival annual report for fiscal 2020. Consumption efficiency is genuinely improving — 28.2 tonnes per thousand ALBD against 29.9 — but that is a multi-year lever against a daily price. Combined fuel and currency cost six cents of earnings per share, or $73 million, in the quarter.

The emissions bill is now a real line item

The EU Emissions Trading System required allowances covering 40% of 2024 emissions in EU waters, 70% of 2025 emissions and 100% from 2026 onwards. Carnival puts the cost at $91 million in 2025 and approximately $170 million in 2026. The first half already carried a $28 million increase, $23 million of it in the Europe segment. The United Kingdom extends its own scheme to international voyages’ domestic legs and port calls from July 2026, which the company does not expect to be material this year. FuelEU Maritime imposes tightening greenhouse gas intensity limits and shore power obligations with financial penalties, and Carnival quantifies none of it. The IMO Net Zero Framework, drafted in April 2025, was postponed for adoption discussions to late 2026; the company says it "could result in increased compliance-related costs, which may have a material impact on our profitability".

Geopolitics moved a full-year number

The 10-Q never uses the words Mediterranean, Red Sea or Israel. The costs, however, are quantified: $30 million of higher crew travel in the quarter and $38 million in the half attributed to the Middle East conflict, plus over 30 basis points of elevated logistics costs. First-quarter 2026 Arabian Gulf voyages were redeployed in a close-in decision taken in summer 2025. With roughly 31% of capacity in Europe and the Mediterranean, this is not a peripheral exposure.

Litigation that got worse in the quarter

In the Havana Docks case under Title III of the Helms-Burton Act, judgment of $110 million plus $4 million in fees was entered against Carnival in December 2022, reversed in the company’s favour by the Eleventh Circuit in October 2024, and then, on 21 May 2026, vacated by the Supreme Court and remanded to the Eleventh Circuit for further proceedings. Carnival states it does not expect a material impact and discloses no provision. Separately, six purported class actions were filed in the Southern District of Florida in April 2026 over a data security incident of 14 April 2026 and consolidated in May. Two Covid-era class actions remain live in Australia and Italy, and a Department of Justice and Environmental Protection Agency matter over alleged Clean Water Act violations under the 2013 Vessel General Permit has been open since March 2022. No specific provision is disclosed for any of them.

Concentration and seasonality

Thirty-five percent of 2026 capacity is Caribbean, and the company’s own risk factors note that investing in Caribbean ports and private islands increases weather exposure. Around 56% of revenue comes from United States guests. Seasonality is extreme: on the June guidance, the third quarter alone carries approximately 40.5% of full-year adjusted EBITDA and roughly 61% of full-year adjusted earnings per share. One bad summer quarter is not one quarter of damage.

The tax rate is very low, and the reasons are changing

On published line items the effective tax rate was roughly 0.4% in fiscal 2025 and about 3.1% in the second quarter — our arithmetic, not a disclosed figure. Do not use the 15% that appears on one XBRL page of the annual report: the underlying tag is the OECD global minimum rate, not Carnival’s rate. The exemption structure is discussed in section 12.

Dilution has already happened

Basic average shares rose 5.3% year on year on the convertible settlement. The buyback so far has offset part of that rather than shrinking the count outright. Anyone modelling per-share growth off the PROPEL target needs to model the denominator too.

11 Management And Capital Allocation

Josh Weinstein has been chief executive since 1 August 2022, having previously been chief operations officer and, before that, president of Carnival UK. David Bernstein has been chief financial officer since July 2007 and additionally chief accounting officer since April 2016 — a nineteen-year tenure that is unusual anywhere and almost unheard of in a business that came within touching distance of insolvency in 2020. Micky Arison, a director since 1987, remains non-executive chair and was re-elected on 17 April 2026.

There have been no management changes. Across the whole of 2025 and 2026 there are only two 8-K filings containing an Item 5.02, and neither concerns the chief executive or the chief financial officer: one records a director choosing not to stand again in January 2025, taking the board from twelve to eleven, and the other records compensation protection and restrictive covenant agreements with senior executives in August 2025. There is no Item 5.02 at all in 2026. The unification documents confirmed that the board and executive team would carry over unchanged into the new entity.

On allocation, Bernstein’s formulation in June was that strong cash flow growth "enabled us to launch our current share buyback program… reinforcing our commitment to accelerate shareholder returns" while the company "continued to responsibly invest in return-generating programs across our fleet and exclusive destinations, while further strengthening our financial position". PROPEL puts numbers on the same three priorities: deleveraging to 2.75x by 2029, continued investment in ships and destinations, and more than 40% of cash from operations — approximately $14 billion cumulatively — returned to shareholders.

12 The Bermuda Redomiciliation And The Tax Question

The unification is not a cosmetic tidy-up. It changes the jurisdiction of the parent, the index membership of the stock, the shareholder register and, potentially, the basis on which the group’s shipping income escapes United States federal income tax.

The mechanics: an Unification Agreement dated 20 February 2026, a Form S-4 registration, a definitive merger proxy in February, shareholder meetings on 17 April 2026, and completion on 7 May 2026. Carnival plc holders received one common share of Carnival Corporation Ltd. per plc share; Carnival Corporation holders exchanged nothing. Carnival plc filed a Form 25 to delist in March and a Form 15-12G to deregister in May, and is now a wholly owned private UK subsidiary. Authorised capital of the new entity is 1.96 billion common shares and 40 million preference shares, each of one cent par value. The registered office is in Hamilton, Bermuda.

Why the tax position matters

Cruise operators have historically paid almost no United States federal income tax on their shipping income. Carnival’s route was Section 883 of the Internal Revenue Code, which exempts qualifying international shipping income where the operator is organised in a country that grants an equivalent exemption and meets a publicly-traded test. The fiscal 2025 annual report states it plainly: "We believe that Panama is an equivalent exemption jurisdiction and that Carnival Corporation currently satisfies the publicly-traded test… Accordingly, for fiscal 2025, substantially all of Carnival Corporation’s income is exempt from U.S. federal income and branch profit taxes."

The same document then flags the change: "Additionally, beginning in fiscal 2026, we believe the U.S. sourced transportation income earned by Carnival Corporation and our other North American cruise ship businesses will qualify for exemption from U.S. federal income tax under provisions of the U.S.-UK income tax treaty." The practical reading, and this is our inference rather than a company statement, is that with Panama out of the structure the exemption shifts from a jurisdiction-equivalence test to a bilateral treaty basis. Treaty-based exemptions come with limitation-on-benefits conditions and are subject to renegotiation in a way that a statutory equivalence test is not.

On the OECD 15% minimum tax, the annual report says the model rules provide an exclusion for international shipping income, that Carnival plc and its subsidiaries became subject from fiscal 2025 and qualify for the exclusion, that Carnival Corporation and its subsidiaries become subject from fiscal 2026, and that effective 1 December 2025 the two groups were aligned into a single tax jurisdiction, with the conclusion that the rules are not expected to have a material impact.

13 Scenarios

These are descriptive framings of what the published numbers would look like under different conditions, not forecasts and not recommendations.

The base case

The company’s own guidance is the base case, and it is unusually specific: approximately $1.35 of adjusted earnings per share in the third quarter and approximately $2.22 for the year, on 1.75% constant-currency yield growth, 2.4% cost growth ex fuel and $713 per tonne of fuel. The variables that would break it are all named in the sensitivity table, and the largest single one is the fuel price.

14 Bottom Line

Carnival spent the last three years doing two things at once: repairing a balance sheet that carried more than $35 billion of debt at the peak, and rebuilding a pricing structure that had been destroyed by a two-year shutdown. On the evidence of this quarter both worked. Twelve consecutive quarters of record net yields is not a statistical fluke, and going from junk to two investment grade ratings while retiring the last of the secured paper is not a presentational achievement.

What the quarter also shows is where the remaining fragility sits, and it is not in demand. Customer deposits are at an all-time high on flat forward capacity, the booking curve is the longest the company has ever had, and 2027 is pricing ahead of 2026. The fragility is in two inputs the company does not control and has chosen not to insure: the bunker price, which it hedges not at all, and the regulatory cost of emissions, which is on a published escalator from $91 million to $170 million and then to a number nobody has quantified.

The June guidance is the clearest statement of the balance. A full point came off the revenue assumption because of a regional conflict, and the earnings number went up by a cent, because cost discipline and a $99 million operating beat covered the gap. That is a business with more levers than it had in 2023. Whether it has enough levers to absorb a genuine fuel shock, in a third quarter that carries 61% of the year’s earnings per share, is the question the next release answers.

One practical note for anyone building a model: the company gives you almost everything you need except the two numbers that would settle the destinations debate. There is no published contribution from Celebration Key to yields, EBITDA or return on invested capital, and no published investment figure for RelaxAway. A $600 million asset with 13,000 daily capacity and 2.4 million visitors in year one is either the best capital allocation decision of this management team or an expensive way to own a beach, and the disclosure does not let you tell which.

15 What To Watch Every Quarter

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