Carnival Cruises 2012 Annual Report Download - page 114
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Table of Contents
Fuel Price Risks
Our exposure to market risk for changes in fuel prices substantially all relates to the consumption of fuel on our ships. We expect to consume approximately
3.3 million metric tons of fuel in 2013. Based on a 10% hypothetical change in our December 20, 2012 guidances’ forecasted average fuel price, we estimate
that our 2013 fuel expense, excluding the effect of zero cost collar fuel derivatives, would change by $230 million.
We use our fuel derivatives program to mitigate a portion of our economic risk attributable to potential fuel price increases. See “Note 11 – Fair Value
Measurements, Derivative Instruments and Hedging Activities” in the accompanying consolidated financial statements for additional discussion of our fuel
derivatives program.
At November 30, 2012, we had fuel derivatives consisting of zero cost collars on Brent to cover a portion of our estimated fuel consumption through 2016.
Based on a 10% hypothetical change in the Brent spot price used in our December 20, 2012 guidance, there would be no impact to our 2013 cash flows from
realized gains and losses on our fuel derivatives as the resulting Brent price would remain within the ceiling and floor Brent prices established by these collars.
At November 30, 2012, the estimated fair value of our outstanding fuel derivative contracts was a net asset of $6 million. Based on a 10% hypothetical
increase or decrease in the November 30, 2012 Brent forward price curve, we estimate the fair value of our fuel derivatives would increase $120 million or
decrease $105 million, respectively.
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