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Contingencies and Commitments | 3 Months Ended
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Feb. 28, 2021
Commitments and Contingencies Disclosure [Abstract] |
Contingencies and Commitments | Contingencies and Commitments Litigation We are routinely involved in legal proceedings, claims, disputes, regulatory matters and governmental inspections or investigations arising in the ordinary course of or incidental to our business, including those noted below. Additionally, as a result of the impact of COVID-19, litigation claims, enforcement actions, regulatory actions and investigations, including, but not limited to, those arising from personal injury and loss of life, have been and may, in the future, be asserted against us. We expect many of these claims and actions, or any settlement of these claims and actions, to be covered by insurance and historically the maximum amount of our liability, net of any insurance recoverables, has been limited to our self-insurance retention levels. We record provisions in the consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. Legal proceedings and government investigations are subject to inherent uncertainties, and unfavorable rulings or other events could occur. Unfavorable resolutions could involve substantial monetary damages. In addition, in matters for which conduct remedies are sought, unfavorable resolutions could include an injunction or other order prohibiting us from selling one or more products at all or in particular ways, precluding particular business practices or requiring other remedies. An unfavorable outcome might result in a material adverse impact on our business, results of operations, financial position or liquidity. As previously disclosed, on May 2, 2019, two lawsuits were filed against Carnival Corporation in the U.S. District Court for the Southern District of Florida under Title III of the Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton Act, alleging that Carnival “trafficked” in confiscated Cuban property when certain ships docked at certain ports in Cuba, and that this alleged “trafficking” entitles the plaintiffs to treble damages. On January 21, 2021, the court continued the trial date in the Havana Docks matter to October 25, 2021. We continue to believe we have a meritorious defense to these actions and we believe that any liability which may arise as a result of these actions will not have a material impact on our consolidated financial statements. Contingent Obligations – Indemnifications Some of the debt contracts we enter into include indemnification provisions obligating us to make payments to the counterparty if certain events occur. These contingencies generally relate to changes in taxes or changes in laws which increase the lender’s costs. There are no stated or notional amounts included in the indemnification clauses, and we are not able to estimate the maximum potential amount of future payments, if any, under these indemnification clauses. Other Contingencies We have agreements with a number of credit card processors that transact customer deposits related to our cruise vacations. Certain of these agreements allow the credit card processors to request under certain circumstances that we provide a reserve fund in cash. Although the agreements vary, these requirements may generally be satisfied either through a withheld percentage of customer payments or providing cash funds directly to the card processor. As of February 28, 2021, we had $629 million in reserve funds relating to our customer deposits to satisfy these requirements which are included within other assets. We expect a portion of new customer deposits to be withheld under these agreements. Additionally, as of February 28, 2021, we placed $172 million of cash collateral in escrow, of which $142 million is included within prepaid expenses and other. We detected ransomware attacks in August 2020 and December 2020, which resulted in unauthorized access to our information technology systems. We engaged a major cybersecurity firm to investigate these matters and notified law enforcement and applicable regulators of these incidents. For the August 2020 event, the investigation phase is complete, as are the communication and reporting phases. We determined that the unauthorized third-party gained access to certain personal information relating to some guests, employees and crew for some of our operations. For the December 2020 event, the investigation and remediation phases are in process and regulators have been notified. There is currently no indication of any misuse of information potentially accessed or acquired and we continue to work with regulators to bring these matters and other reportable incidents to conclusion. We have incurred legal and other costs in connection with these and other cyber incidents, and while at this time we do not believe that these incidents will have a material adverse effect on our business, operations or financial results, no assurances can be given and we may be subject to future attacks or incidents that could have such a material adverse effect. COVID-19 Actions Private Actions We have been named in a number of individual actions related to COVID-19. Private parties have brought approximately 70 lawsuits as of April 1, 2021 in several U.S. federal courts as well as in France, Italy and Brazil. These actions include tort claims based on a variety of theories, including negligence and failure to warn. The plaintiffs in these actions allege a variety of injuries: some plaintiffs allege only emotional distress, while others allege injuries arising from testing positive for COVID-19. A smaller number of actions include wrongful death claims. All individual actions seek monetary and punitive damages but do not specify exact amounts. Additionally, as of April 1, 2021, ten purported class actions have been brought by former guests from Ruby Princess, Diamond Princess, Grand Princess, Coral Princess, Costa Luminosa or Zaandam in several U.S. federal courts and in the Federal Court of Australia. These actions seek compensation based on a variety of tort claims, including, but not limited to, negligence, gross negligence and failure to warn, physical injuries and severe emotional distress associated with being exposed and/or contracting COVID-19 onboard. As previously disclosed, on April 8, 2020, numerous former guests from Grand Princess filed a purported class action against Carnival Corporation and Carnival plc and two of our subsidiaries, Princess Cruise Lines, Ltd. and Fairline Shipping International Corporation, Ltd. (“Fairline Shipping”). On May 5, 2020, this case was transferred to the U.S. District Court for the Central District of California and on June 2, 2020, the plaintiffs removed Fairline Shipping from the case. On October 20, 2020, the court denied the plaintiffs’ motion for class certification, and the plaintiffs filed a petition for leave to appeal this ruling to the U.S. Court of Appeals for the Ninth Circuit on November 3, 2020. On February 17, 2021, the Ninth Circuit Court of Appeals denied that petition. As previously disclosed, on July 23, 2020, Susan Karpik, a former guest from Ruby Princess filed a purported class action against Carnival plc and Princess Cruises in the Federal Court of Australia. On March 24, 2021 the plaintiffs filed a second amended complaint. As previously disclosed, two purported class actions were filed on behalf of certain purchasers of Carnival Corporation securities alleging violations of Sections 10(b) and 20(a) of the U.S. Securities and Exchange Act of 1934. Following the filing of a third purported class action on behalf of certain options investors, alleging the same set of factual theories, the three actions were consolidated with new lead plaintiffs, the New England Carpenters Pension and Guaranteed Annuity Fund and the Massachusetts Laborers’ Pension and Annuity Fund. A consolidated class action complaint was filed on December 15, 2020 on behalf of all purchasers of Carnival Corporation common stock and/or Carnival plc American Depositary Shares, and sellers of put options and purchasers of call options on those securities, between September 16, 2019 and March 31, 2020. The consolidated complaint alleges that defendants Carnival Corporation, Carnival plc, and Arnold W. Donald violated Sections 10(b) and 20(a) of the U.S. Securities and Exchange Act of 1934 by making misrepresentations and omissions related to Carnival Corporation’s COVID-19 knowledge and response. Plaintiffs seek to recover unspecified damages and equitable relief for the alleged misstatements and omissions. A motion to dismiss was filed on January 18, 2021 and was fully briefed as of March 8, 2021. We continue to take proper actions to defend against the above claims. Governmental Inquiries and Investigations Federal and non-U.S. governmental agencies and officials are investigating or otherwise seeking information, testimony and/or documents, regarding COVID-19 incidents and related matters. We are investigating these matters internally and are cooperating with all requests. The investigations could result in the imposition of civil and criminal penalties in the future. Ship Commitments As of February 28, 2021, we expect the timing of our new ship growth capital commitments to be as follows:
(in millions) Year |  |
Remainder of 2021 |  | $ | 1,449 |
2022 |  | 4,734 |
2023 |  | 2,328 |
2024 |  | 1,874 |
2025 |  | 1,073 |
Thereafter |  | — |
|  | $ | 11,459 |

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- Definition The entire disclosure for loss and gain contingencies. Describes any existing condition, situation, or set of circumstances involving uncertainty as of the balance sheet date (or prior to issuance of the financial statements) as to a probable or reasonably possible loss incurred by an entity that will ultimately be resolved when one or more future events occur or fail to occur, and typically discloses the amount of loss recorded or a range of possible loss, or an assertion that no reasonable estimate can be made. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 450 -SubTopic 30 -URI http://asc.fasb.org/subtopic&trid=2127197 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 450 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2127163 + Details
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