Carnival Cruises 2015 Annual Report Download - page 29

stock or Carnival plc ordinary shares are trading at a price that is at a premium or discount to the price of
Carnival plc ordinary shares or Carnival Corporation common stock, as the case may be. Any realized economic
benefit under the Stock Swap programs is used for general corporate purposes, which could include repurchasing
additional stock under the Repurchase Program. Depending on market conditions and other factors, we may
repurchase shares of Carnival Corporation common stock and/or Carnival plc ordinary shares under the
Repurchase Program and the Stock Swap programs concurrently.
Carnival plc ordinary share repurchases under both the Repurchase Program and the Stock Swap programs
require annual shareholder approval. The existing shareholder approval is limited to a maximum of 21.5 million
ordinary shares and is valid until the earlier of the conclusion of the Carnival plc 2016 annual general meeting or
July 13, 2016. At January 22, 2016, the remaining availability under the Stock Swap programs was 18.1 million
Carnival plc ordinary shares and 26.9 million shares of Carnival Corporation common stock.
During 2015 and 2013, under the Stock Swap programs, Carnival Investments Limited (“CIL”), a subsidiary of
Carnival Corporation, sold 5.1 million and 0.9 million of Carnival plc ordinary shares for net proceeds of $264
million and $35 million, respectively. Substantially all of the net proceeds from these sales were used to purchase
5.1 million shares in 2015 and 0.9 million shares in 2013 of Carnival Corporation common stock. Carnival
Corporation sold these Carnival plc ordinary shares owned by CIL only to the extent it was able to repurchase
shares of Carnival Corporation common stock in the U.S. on at least an equivalent basis. During 2015 and 2013,
no Carnival Corporation common stock was sold or Carnival plc ordinary shares were repurchased under the
Stock Swap program. During 2014, no Carnival Corporation common stock or Carnival plc ordinary shares were
sold or repurchased under the Stock Swap programs.
At November 30, 2015, there were 14.7 million shares of Carnival Corporation common stock reserved for
issuance under its employee benefit and dividend reinvestment plans. At November 30, 2015, there were
8.2 million ordinary shares of Carnival plc authorized for future issuance under its employee benefit plans.
Accumulated other comprehensive loss was as follows (in millions):
November 30,
2015 2014
Cumulative foreign currency translation adjustments, net ............................ $(1,591) $(512)
Unrecognized pension expenses ................................................ (82) (90)
Unrealized losses on marketable securities ........................................ (3) (5)
Net losses on cash flow derivative hedges ........................................ (65) (9)
$(1,741) $(616)
During 2015 and 2014, $13 million and $18 million of unrecognized pension expenses were reclassified out of
accumulated other comprehensive loss, of which $8 million and $12 million were included in payroll and related
expenses and $5 million and $6 million were included in selling and administrative expenses, respectively.
NOTE 11 – 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.
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