Carnival Cruises 2014 Annual Report Download - page 35

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fuel price increases. We designed our fuel derivatives program to maximize operational flexibility by utilizing
derivative markets with significant trading liquidity and our program currently consists of zero cost collars on
Brent.
All of our derivatives are based on Brent prices whereas the actual fuel used on our ships is marine fuel. Changes
in the Brent prices may not show a high degree of correlation with changes in our underlying marine fuel prices.
We will not realize any economic gain or loss upon the monthly maturities of our zero cost collars unless the
average monthly price of Brent is above the ceiling price or below the floor price. We believe that these
derivatives will act as economic hedges; however, hedge accounting is not applied. As part of our fuel derivatives
program, we will continue to evaluate various derivative products and strategies. In 2014, 2013 and 2012, our
unrealized (losses) gains, net on fuel derivatives were $(268) million, $36 million and $6 million, respectively,
and in 2014 and 2012, our realized losses, net were $(3) million and $(13) million, respectively. There were no
realized gains or losses in 2013.
At November 30, 2014, our outstanding fuel derivatives consisted of zero cost collars on Brent to cover a portion
of our estimated fuel consumption as follows:
Maturities (a)
Transaction
Dates
Barrels
(in thousands)
Weighted-Average
Floor Prices
Weighted-Average
Ceiling Prices
Percent of Estimated
Fuel Consumption
Covered
Fiscal 2015
November 2011 . . . 2,160 $80 $114
February 2012 .... 2,160 $80 $125
June 2012 ....... 1,236 $74 $110
April 2013 ....... 1,044 $80 $111
May 2013 ....... 1,884 $80 $110
October 2014 ..... 1,920 $79 $110
10,404 51%
Fiscal 2016
June 2012 ....... 3,564 $75 $108
February 2013 .... 2,160 $80 $120
April 2013 ....... 3,000 $75 $115
8,724 42%
Fiscal 2017
February 2013 .... 3,276 $80 $115
April 2013 ....... 2,028 $75 $110
January 2014 ..... 1,800 $75 $114
October 2014 ..... 1,020 $80 $113
8,124 39%
Fiscal 2018
January 2014 ..... 2,700 $75 $110
October 2014 ..... 3,000 $80 $114
5,700 28%
(a) Fuel derivatives mature evenly over each month within the above fiscal periods.
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