General

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

Basis of Presentation

The Consolidated Balance Sheet at February 28, 2015 and the Consolidated Statements of Operations, the Consolidated Statements of Comprehensive (Loss) Income and the Consolidated Statements of Cash Flows for the three months ended February 28, 2015 and 2014 are unaudited and, in the opinion of our management, contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation. Our interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in the Carnival Corporation & plc 2014 joint Annual Report on Form 10-K (“Form 10-K”) filed with the U.S. Securities and Exchange Commission on January 29, 2015. Our operations are seasonal and results for interim periods are not necessarily indicative of the results for the entire year.

Revision of Prior Period Financial Statements

In the first quarter of 2015, we revised and corrected the accounting for one of our brands' marine and technical spare parts in order to consistently expense and classify them fleetwide. We evaluated the materiality of this revision and concluded that it was not material to any of our previously issued financial statements. However, had we not revised, this accounting may have resulted in material inconsistencies to our financial statements in the future. Accordingly, we will revise all other previously reported results in future filings.

The effects of this revision on our Consolidated Statement of Operations were as follows (in millions, except per share data):



	Three Months Ended February 28, 2014
	As Previously Reported			Adjustment			As Revised
Other ship operating	$	590		$	4		$	594
Depreciation and amortization	$	404		$	1		$	405
Operating income	$	72		$	(5	)	$	67
Loss before income taxes	$	(14	)	$	(5	)	$	(19	)
Net loss	$	(15	)	$	(5	)	$	(20	)
Loss per share
Basic	$	(0.02	)	$	(0.01	)	$	(0.03	)
Diluted	$	(0.02	)	$	(0.01	)	$	(0.03	)

The effects of this revision on our Consolidated Statement of Comprehensive Income were as follows (in millions):



	Three Months Ended February 28, 2014
	As Previously Reported			Adjustment			As Revised
Net loss	$	(15	)	$	(5	)	$	(20	)
Total comprehensive income	$	97		$	(5	)	$	92

The effects of this revision on our Consolidated Balance Sheet were as follows (in millions):



	November 30, 2014
	As Previously Reported		Adjustment				As Revised
Inventories	$	364	$	(15	)		$	349
Total current assets	$	1,503	$	(15	)		$	1,488
Property and equipment, net	$	32,773	$	46			$	32,819
Other assets	$	859	$	(115	)		$	744
Total assets	$	39,532	$	(84	)		$	39,448
Retained earnings	$	19,242	$	(84	)	(a)	$	19,158
Total shareholders' equity	$	24,288	$	(84	)		$	24,204
Total liabilities and shareholders' equity	$	39,532	$	(84	)		$	39,448

(a) As of November 30, 2014, the cumulative impact of this revision was an $84 million reduction in retained earnings. The diluted earnings per share decreases for each of 2014 and 2013 were $0.03, and for 2012, pre-2010 and in the aggregate, they were $0.02, $0.03 and $0.11, respectively. There was no annual diluted earnings per share impact for 2011 and 2010. The notes to the consolidated financial statements for the three months ended February 28, 2014 have been revised, as applicable.

This non-cash revision did not impact our operating cash flows for any period. The effects of this revision on the individual line items within operating cash flows on our Consolidated Statement of Cash Flows were as follows (in millions):



	Three Months Ended February 28, 2014
	As Previously Reported			Adjustment			As Revised
Net loss	$	(15	)	$	(5	)	$	(20	)
Depreciation and amortization	$	404		$	1		$	405
Inventories	$	(5	)	$	(4	)	$	(9	)
Insurance recoverables, prepaid expenses and other	$	103		$	11		$	114
Claims reserves and accrued and other liabilities	$	(125	)	$	(3	)	$	(128	)

Other

Cruise passenger ticket revenues include fees, taxes and charges collected by us from our guests. The portion of these fees, taxes and charges included in passenger ticket revenues and commissions, transportation and other costs were $135 million and $137 million for the three months ended February 28, 2015 and 2014, respectively.

During the three months ended February 28, 2015 and 2014, repairs and maintenance expenses, including minor improvement costs and dry-dock expenses, were $250 million and $252 million, respectively, and are substantially all included in other ship operating expenses.