Carnival Cruises 2011 Annual Report Download - page 25

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Financial Instruments that are not Measured at Fair Value on a Recurring Basis
The estimated carrying and fair values of our financial instrument assets and (liabilities) that are not measured at
fair value on a recurring basis were as follows (in millions):
November 30, 2011 November 30, 2010
Carrying
Value Fair Value
Carrying
Value Fair Value
Cash and cash equivalents (a) ................................ $ 358 $ 358 $ 404 $ 404
Long-term other assets (b) .................................. $ 96 $ 90 $ 191 $ 178
Fixed rate debt (c) ......................................... $(6,251) $(6,715) $(6,689) $(7,076)
Floating rate debt (c) ....................................... $(3,102) $(3,057) $(2,669) $(2,630)
Other ................................................... $ - $ - $ (6) $ (7)
(a) Cash and cash equivalents are comprised of cash on hand and time deposits and, due to their short
maturities, the carrying values approximate their fair values.
(b) At November 30, 2011 and 2010, substantially all of our long-term other assets were comprised of notes and
other receivables. The fair values of notes and other receivables were based on estimated future cash flows
discounted at appropriate market interest rates.
(c) The net difference between the fair value of our fixed rate debt and its carrying value was due to the market
interest rates in existence at November 30, 2011 and 2010 being lower than the fixed interest rates on these
debt obligations, including the impact of changes in our credit ratings, if any. The net difference between the
fair value of our floating rate debt and its carrying value was due to the market interest rates in existence at
November 30, 2011 and 2010 being higher than the floating interest rates on these debt obligations,
including the impact of changes in our credit ratings, if any. The fair values of our publicly-traded notes
were based on their unadjusted quoted market prices in active markets. The fair values of our other debt
were estimated based on appropriate market interest rates being applied to this debt.
Financial Instruments that are Measured at Fair Value on a Recurring Basis
The estimated fair value and basis of valuation of our financial instrument assets and (liabilities) that are
measured at fair value on a recurring basis were as follows (in millions):
November 30, 2011 November 30, 2010
Level 1 Level 2 Level 1 Level 2
Cash equivalents (a) ............................................ $92 $ - $ 25 $ -
Marketable securities held in rabbi trusts (b) ......................... $98 $18 $105 $21
Derivatives
Fuel (c) .................................................. $ - $ 1 $ - $ -
Ship foreign currency options (d) .............................. $ - $ - $ - $ 8
Net investment hedges (e) .................................... $ - $ 2 $ - $12
Interest rate swaps (f) ....................................... $ - $(9) $ - $ 1
(a) Cash equivalents are comprised of money market funds.
(b) Level 1 and 2 marketable securities are held in rabbi trusts and are primarily comprised of frequently-priced
mutual funds invested in common stocks and other investments, respectively. Their use is restricted to
funding certain deferred compensation and non-qualified U.S. pension plans.
(c) In fiscal 2011, we bought Brent crude oil (“Brent”) call options and sold Brent put options, collectively
referred to as zero costs collars that established ceiling and floor Brent prices. At November 30, 2011, we
had fuel derivatives for approximately 10% of our estimated fuel consumption for the second half of fiscal
2012 through fiscal 2015.
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