Carnival Cruises 2012 Annual Report Download - page 93

Table of Contents
At November 30, 2012, 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 2013
November 2011 2,112 $74 $132
February 2012 2,112 $98 $ 127
March 2012 4,224 $100 $130
8,448 40%
Fiscal 2014
November 2011 2,112 $ 71 $ 128
February 2012 2,112 $ 88 $125
June 2012 2,376 $ 71 $116
6,600 32%
Fiscal 2015
November 2011 2,160 $ 71 $125
February 2012 2,160 $80 $125
June 2012 1,236 $74 $110
5,556 26%
Fiscal 2016 June 2012 3,564 $75 $108 17%
(a) Fuel derivatives mature evenly over each month within the above fiscal periods.
Concentrations of Credit Risk
As part of our ongoing control procedures, we monitor concentrations of credit risk associated with financial and other institutions with which we conduct
significant business. Our maximum exposure under foreign currency and fuel derivative contracts and interest rate swap agreements that are in-the-money,
which were not significant at November 30, 2012, is the replacement cost, net of any collateral received, in the event of nonperformance by the counterparties
to the contracts, all of which are currently our lending banks. We seek to minimize credit risk exposure, including counterparty nonperformance primarily
associated with our cash equivalents, investments, committed financing facilities, contingent obligations, derivative instruments, insurance contracts and new
ship progress payment guarantees, by normally conducting business with large, well-established financial institutions, insurance companies and export credit
agencies, and by diversifying our counterparties. In addition, we have guidelines regarding credit ratings and investment maturities that we follow to help
safeguard liquidity and minimize risk. We normally do require collateral and/or guarantees to support notes receivable on significant asset sales, long-term
ship charters and new ship progress payments to shipyards. We currently believe the risk of nonperformance by any of our significant counterparties is
remote.
We also monitor the creditworthiness of travel agencies and tour operators in Europe and credit card providers to which we extend credit in the normal course
of our business. Our credit exposure includes contingent obligations related to cash payments received directly by travel agents and tour operators for cash
collected by them on cruise sales in most of Europe where we are obligated to extend credit in a like amount to these guests even if we do not receive payment
from the travel agents or tour operators. Concentrations of credit risk associated with these receivables and contingent obligations are not considered to be
material, primarily due to the large number of unrelated accounts within our customer base, the amount of these contingent obligations and their short
maturities. We have experienced only minimal credit losses on our trade receivables and related contingent obligations. We do not normally require collateral or
other security to support normal credit sales.
NOTE 12 – Segment Information
We have three reportable cruise segments that are comprised of our (1) North America cruise brands, (2) EAA cruise brands and (3) Cruise Support. In
addition, we have a Tour and Other segment. Our segments are reported on the same basis as the internally reported information that is provided to our chief
operating decision maker (“CODM”), who is the Chairman of the Boards of Directors and Chief Executive Officer of Carnival Corporation and Carnival plc.
Decisions to allocate resources and assess performance for Carnival Corporation & plc are taken by the CODM upon review of the segment results across all
of our cruise brands and other segments.
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