Carnival Cruises 2014 Annual Report Download - page 27

At November 30, 2014, there were 15.9 million shares of Carnival Corporation common stock reserved for
issuance under its employee benefit and dividend reinvestment plans. At November 30, 2014, there were
8.4 million ordinary shares of Carnival plc authorized for future issuance under its employee benefit plans.
On November 15, 2012, our Boards of Directors declared a special dividend to holders of Carnival Corporation
common stock and Carnival plc ordinary shares of $0.50 per share, or $0.4 billion, which was paid in December
2012. The special dividend was in addition to our $0.25 per share regular 2012 quarterly dividend.
Accumulated other comprehensive (loss) income was as follows (in millions):
November 30,
2014 2013
Cumulative foreign currency translation adjustments, net .............................. $(512) $234
Unrecognized pension expenses .................................................. (90) (97)
Unrealized losses on marketable securities .......................................... (5) (7)
Net (losses) gains on cash flow derivative hedges .................................... (9) 31
$(616) $161
During 2014, $18 million of unrecognized pension expenses were reclassified out of accumulated other
comprehensive (loss) income, of which $12 million and $6 million were included in payroll and related expenses
and selling and administrative expenses, respectively.
NOTE 10 – Fair Value Measurements, Derivative Instruments and Hedging Activities
Fair Value Measurements
U.S. accounting standards establish a fair value hierarchy that prioritizes the inputs used to measure fair value.
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or
liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). This
hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs.
The three levels of inputs used to measure fair value are as follows:
• Level 1 measurements are based on unadjusted quoted prices in active markets for identical assets or
liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of
judgment.
• Level 2 measurements are based on quoted prices for similar assets or liabilities in active markets, quoted
prices for identical or similar assets or liabilities in markets that are not active or market data other than
quoted prices that are observable for the assets or liabilities.
• Level 3 measurements are based on unobservable data that are supported by little or no market activity and
are significant to the fair value of the assets or liabilities.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between independent and knowledgeable market participants at the measurement date. Therefore, even when
market assumptions are not readily available, our own assumptions are set to reflect those that we believe market
participants would use in pricing the asset or liability at the measurement date.
The fair value measurement of a financial asset or financial liability must reflect the nonperformance risk of the
counterparty and us. Therefore, the impact of our counterparty’s creditworthiness was considered when in an
asset position, and our creditworthiness was considered when in a liability position in the fair value measurement
of our financial instruments. Creditworthiness did not have a significant impact on the fair values of our financial
instruments at November 30, 2014 and 2013. Both the counterparties and we are expected to continue to perform
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