Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Feb. 28, 2019 | Apr. 01, 2019 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Feb. 28, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --11-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Registrant Name | CARNIVAL CORP | |
Entity Central Index Key | 0000815097 | |
Entity Common Stock, Shares Outstanding | 526,957,537 | |
CARNIVAL PLC | ||
Entity Registrant Name | CARNIVAL PLC | |
Entity Central Index Key | 0001125259 | |
Entity Common Stock, Shares Outstanding | 190,024,517 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Revenues | ||
Revenues | $ 4,673 | $ 4,232 |
Cruise | ||
Selling and administrative | 629 | 616 |
Depreciation and amortization | 516 | 488 |
Operating costs and expenses | 4,287 | 3,813 |
Operating Income | 386 | 419 |
Nonoperating Income (Expense) | ||
Interest income | 4 | 3 |
Interest expense, net of capitalized interest | (51) | (48) |
Gains on fuel derivatives, net | 0 | 16 |
Other (expense) income, net | (2) | 1 |
Nonoperating Income (Expense) | (49) | (28) |
Income Before Income Taxes | 338 | 390 |
Income Tax Expense, Net | (2) | 0 |
Net Income | $ 336 | $ 391 |
Earnings Per Share | ||
Earnings per share, basic (in dollars per share) | $ 0.48 | $ 0.54 |
Earnings per share, diluted (in dollars per share) | $ 0.48 | $ 0.54 |
Cruise and tour | ||
Cruise | ||
Operating costs and expenses | $ 3,142 | $ 2,709 |
Cruise | ||
Cruise | ||
Commissions, transportation and other | 709 | 663 |
Onboard and other | 467 | 140 |
Payroll and related | 557 | 558 |
Fuel | 381 | 359 |
Food | 268 | 264 |
Other ship operating | 731 | 711 |
Cruise passenger ticket | ||
Revenues | ||
Revenues | 3,199 | 3,148 |
Cruise onboard and other | ||
Revenues | ||
Revenues | 1,446 | 1,071 |
Tour and other | ||
Revenues | ||
Revenues | 29 | 13 |
Cruise | ||
Operating costs and expenses | $ 29 | $ 14 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net Income | $ 336 | $ 391 |
Items Included in Other Comprehensive Income | ||
Change in foreign currency translation adjustment | 79 | 292 |
Other | 0 | 3 |
Other Comprehensive Income | 79 | 295 |
Total Comprehensive Income | $ 415 | $ 686 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Feb. 28, 2019 | Nov. 30, 2018 |
Current Assets | ||
Cash and cash equivalents | $ 649 | $ 982 |
Trade and other receivables, net | 406 | 358 |
Inventories | 444 | 450 |
Prepaid expenses and other | 603 | 436 |
Total current assets | 2,101 | 2,225 |
Property and Equipment, Net | 37,005 | 35,336 |
Goodwill | 2,943 | 2,925 |
Other Intangibles | 1,181 | 1,176 |
Other Assets | 700 | 738 |
Total assets | 43,930 | 42,401 |
Current Liabilities | ||
Short-term borrowings | 768 | 848 |
Current portion of long-term debt | 1,684 | 1,578 |
Accounts payable | 798 | 730 |
Accrued liabilities and other | 1,637 | 1,654 |
Customer deposits | 4,755 | 4,395 |
Total current liabilities | 9,642 | 9,204 |
Long-Term Debt | 9,134 | 7,897 |
Other Long-Term Liabilities | 912 | 856 |
Contingencies | ||
Shareholders’ Equity | ||
Additional paid-in capital | 8,776 | 8,756 |
Retained earnings | 25,033 | 25,066 |
Accumulated other comprehensive income (loss) (“AOCI”) | (1,869) | (1,949) |
Treasury stock, 130 shares at 2019 and 129 shares at 2018 of Carnival Corporation and 53 shares at 2019 and 48 shares at 2018 of Carnival plc, at cost | (8,063) | (7,795) |
Total shareholders’ equity | 24,241 | 24,443 |
Total liabilities and shareholders' equity | 43,930 | 42,401 |
Common Stock | ||
Shareholders’ Equity | ||
Common stock | 7 | 7 |
Ordinary Shares | ||
Shareholders’ Equity | ||
Common stock | $ 358 | $ 358 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares shares in Millions | Feb. 28, 2019 | Nov. 30, 2018 |
Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,960 | 1,960 |
Common stock, shares issued (in shares) | 657 | 656 |
Treasury stock, shares (in shares) | 130 | 129 |
CARNIVAL PLC | Ordinary Shares | ||
Common stock, par value (in dollars per share) | $ 1.66 | $ 1.66 |
Common stock, shares issued (in shares) | 217 | 217 |
Treasury stock, shares (in shares) | 53 | 48 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
OPERATING ACTIVITIES | ||
Net income | $ 336 | $ 391 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation and amortization | 516 | 488 |
Gains on fuel derivatives, net | 0 | (16) |
Share-based compensation | 20 | 18 |
Other, net | 12 | 24 |
Adjustments to reconcile net income to net cash provided by operating activities | 884 | 904 |
Changes in operating assets and liabilities | ||
Receivables | (50) | (30) |
Inventories | 7 | 1 |
Prepaid expenses and other | (154) | 98 |
Accounts payable | 65 | 19 |
Accrued liabilities and other | 5 | (198) |
Customer deposits | 358 | 271 |
Net cash provided by operating activities | 1,116 | 1,064 |
INVESTING ACTIVITIES | ||
Purchases of property and equipment | (2,129) | (574) |
Payments of fuel derivative settlements | (6) | (21) |
Other, net | 76 | 6 |
Net cash used in investing activities | (2,059) | (588) |
FINANCING ACTIVITIES | ||
(Repayments of) proceeds from short-term borrowings, net | (81) | 611 |
Principal repayments of long-term debt | (95) | (963) |
Proceeds from issuance of long-term debt | 1,439 | 469 |
Dividends paid | (348) | (323) |
Purchases of treasury stock | (274) | (218) |
Other, net | (29) | (4) |
Net cash provided by (used in) financing activities | 612 | (428) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 1 | 12 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (331) | 60 |
Cash, cash equivalents and restricted cash at beginning of period | 996 | 422 |
Cash, cash equivalents and restricted cash at end of period | $ 665 | $ 482 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Millions | Total | Common stock | Ordinary shares | Additional paid-in capital | Retained earnings | AOCI | Treasury stock |
Beginning Balance at Nov. 30, 2017 | $ 24,216 | $ 7 | $ 358 | $ 8,690 | $ 23,292 | $ (1,782) | $ (6,349) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income | 391 | 391 | |||||
Other comprehensive income (loss) | 295 | 295 | |||||
Cash dividends declared | (322) | (322) | |||||
Purchases of treasury stock under the Repurchase Program and other | (198) | 18 | (216) | ||||
Ending Balance at Feb. 28, 2018 | 24,382 | 7 | 358 | 8,708 | 23,360 | (1,486) | (6,565) |
Beginning Balance at Nov. 30, 2018 | 24,443 | 7 | 358 | 8,756 | 25,066 | (1,949) | (7,795) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income | 336 | 336 | |||||
Other comprehensive income (loss) | 79 | 79 | |||||
Cash dividends declared | (345) | (345) | |||||
Purchases of treasury stock under the Repurchase Program and other | (248) | 20 | (268) | ||||
Ending Balance at Feb. 28, 2019 | $ 24,241 | $ 7 | $ 358 | $ 8,776 | $ 25,033 | $ (1,869) | $ (8,063) |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared per share (in dollars per share) | $ 0.50 | $ 0.45 |
General
General | 3 Months Ended |
Feb. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General The consolidated financial statements include the accounts of Carnival Corporation and Carnival plc and their respective subsidiaries. Together with their consolidated subsidiaries, they are referred to collectively in these consolidated financial statements and elsewhere in this joint Quarterly Report on Form 10-Q as “Carnival Corporation & plc,” “our,” “us” and “we.” Basis of Presentation The Consolidated Statements of Income, the Consolidated Statements of Comprehensive Income, the Consolidated Statements of Cash Flows and the Consolidated Statements of Shareholders’ Equity for the three months ended February 28, 2019 and 2018 , and the Consolidated Balance Sheet at February 28, 2019 are unaudited and, in the opinion of our management, contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement. Our interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in the Carnival Corporation & plc 2018 joint Annual Report on Form 10-K (“Form 10-K”) filed with the U.S. Securities and Exchange Commission on January 28, 2019 . Our operations are seasonal and results for interim periods are not necessarily indicative of the results for the entire year. Accounting Pronouncements The Financial Accounting Standards Board (the “FASB”) issued guidance, Revenue from Contracts with Customers (“ASC 606”) , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. On December 1, 2018, we adopted this guidance using the modified retrospective method to all contracts as of the adoption date. Results for reporting periods beginning after December 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historical accounting under ASC 605. The impact of the adoption of ASC 606 on our consolidated financial statements primarily relates to the gross presentation of prepaid travel agent commissions (Consolidated Balance Sheet), shore excursions and other onboard revenues and costs (Consolidated Statement of Income) which were historically presented net. As of December 1, 2018, we recorded a cumulative effect adjustment of $24 million to retained earnings related to the accounting for our loyalty programs. The following table summarizes the impacts of ASC 606 adoption on our consolidated financial statements as of and for the three months ended February 28, 2019 : (in millions) Prior to adoption of ASC 606 Adjustments As Reported Consolidated Balance Sheet Prepaid expenses and other $ 461 $ 142 $ 603 Total current assets $ 1,959 $ 142 $ 2,101 Customer deposits $ 4,613 $ 142 $ 4,755 Total current liabilities $ 9,501 $ 142 $ 9,642 Consolidated Statement of Income Onboard and other (Revenues) $ 1,123 $ 323 $ 1,446 Revenues (Total) $ 4,350 $ 323 $ 4,673 Onboard and other (Operating Costs and Expenses) $ 145 $ 323 $ 467 Operating Costs and Expenses (Total) $ 3,964 $ 323 $ 4,287 Operating Income $ 386 $ — $ 386 Net Income $ 336 $ — $ 336 Consolidated Statement of Cash Flows Prepaid expenses and other $ (12 ) $ (142 ) $ (154 ) Customer deposits $ 216 $ 142 $ 358 Net cash provided by operating activities $ 1,116 $ — $ 1,116 The FASB issued amended guidance, Business Combinations - Clarifying the Definition of a Business , which assists entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. On December 1, 2018, we adopted this guidance using the prospective transition method. The adoption of this guidance had no impact on our consolidated financial statements. The FASB issued amended guidance, Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments , which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments are aimed at reducing the existing diversity in practice. On December 1, 2018, we adopted this guidance using the retrospective method for each period presented. The adoption of this guidance had no impact on our consolidated financial statements. The FASB issued amended guidance, Statement of Cash Flows - Restricted Cash. On December 1, 2018, we adopted this guidance using the retrospective method for each period presented. As a result, we now present restricted cash with cash and cash equivalents in the statement of cash flows. The reclassified restricted cash balances from investing activities to changes in cash, cash equivalents and restricted cash was not material for the period presented. The FASB issued amended guidance, Service Concession Arrangements, which clarifies that the grantor in a service arrangement should be considered the customer of the operating entity in all cases. On December 1, 2018, we adopted this guidance using the modified retrospective method. The adoption of this guidance had no impact on our consolidated financial statements. The FASB issued amended guidance, Derivatives and Hedging , which targeted improvements to accounting for hedging activities such as hedging strategies, effectiveness assessments, and recognition of derivative gains or losses. On December 1, 2018, we early adopted this guidance using the modified retrospective approach, which did not have a material impact on our financial statements. At the time of adoption, we changed the method by which we assess effectiveness for outstanding net investment hedges from the forward method to the spot method. Under the spot method, the change in fair value of the hedging instrument attributable to hedge effectiveness remains in AOCI until the net investment is sold or liquidated, while the impact attributable to components excluded from the assessment of hedge effectiveness is recorded in interest expense, net of capitalized interest, on a systematic and rational basis. Previous gains or losses incurred under the forward method related to net investment hedges will remain in AOCI within the foreign currency translation adjustments component and will be reclassified to earnings when the net investment is sold or liquidated. As required by this guidance, we have also added certain disclosures about hedging activities and their effect on our consolidated financial statements. The FASB issued guidance, Leases , which requires an entity to recognize both assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. This guidance is required to be adopted by us in the first quarter of 2020 and must be applied using a modified retrospective approach which allows entities to either apply the new lease standard to the beginning of the earliest period presented or only to the current period consolidated financial statements. The initial adoption of this guidance is expected to increase both our total assets and total liabilities, reflecting the lease rights and obligations arising from our lease arrangements, and will require additional disclosures. We are evaluating certain contractual arrangements to determine if they contain an implicit right to use an asset that would qualify as a leasing arrangement under the new guidance. The FASB issued amended guidance, Intangibles - Goodwill and Other - Internal-Use Software, which requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance to determine which implementation costs to capitalize as assets or expense as incurred. The expense related to deferred implementation costs is required to be presented in the same income statement line item as the related hosting fees. Additionally, the payments for deferred implementation costs are required to be presented in the same line item in the statement of cash flows as payments for the related hosting fees. This guidance is required to be adopted by us in the first quarter of 2021 and must be applied using either a prospective or a retrospective approach. Early adoption is permitted. We are currently evaluating the impact this guidance will have on our consolidated financial statements. |
Revenue and Expense Recognition
Revenue and Expense Recognition | 3 Months Ended |
Feb. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue and Expense Recognition | Revenue and Expense Recognition Guest cruise deposits represent unearned revenues, and are initially included in customer deposit liabilities when received. Customer deposits are subsequently recognized as cruise revenues, together with revenues from onboard and other activities, and all associated direct costs and expenses of a voyage are recognized as cruise costs and expenses, upon completion of voyages, with durations of ten nights or less and on a pro rata basis for voyages in excess of ten nights. The impact of recognizing these shorter duration cruise revenues and costs and expenses on a completed voyage basis versus on a pro rata basis is not significant. Certain of our product offerings are bundled and we allocate the value of the bundled services and goods between passenger ticket revenues, onboard and other revenues and tour and other revenues based upon the estimated standalone selling prices of those goods and services. Future travel discount vouchers are included as a reduction of cruise passenger ticket revenues when such vouchers are utilized. Guest cancellation fees are recognized in cruise passenger ticket revenues at the time of cancellation. Our sale to guests of air and other transportation to and from airports near the home ports of our ships are included in cruise passenger ticket revenues, and the related cost of purchasing these services are included in cruise transportation costs. The proceeds that we collect from the sales of third-party shore excursions are included in onboard and other revenues and the related costs are included in onboard and other costs. The amounts collected on behalf of our onboard concessionaires, net of the amounts remitted to them, are included in onboard and other cruise revenues as concession revenues. All of these amounts are recognized on a completed voyage or pro rata basis as discussed above. Cruise passenger ticket revenues include fees, taxes and charges collected by us from our guests. A portion of these fees, taxes and charges vary with guest head counts and are directly imposed on a revenue-producing arrangement. This portion of the fees, taxes and charges is expensed in commissions, transportation and other costs when the corresponding revenues are recognized. For the three months ended February 28, the fees, taxes and charges included in passenger ticket revenues and commissions, transportation and other costs were $163 million in 2019 and $148 million in 2018 . The remaining portion of fees, taxes and charges are also included in cruise passenger ticket revenues and are expensed in other ship operating expenses when the corresponding revenues are recognized. Revenues and expenses from our hotel and transportation operations, which are included in our Tour and Other segment, are recognized at the time the services are performed or expenses are incurred. Revenues from the long-term leasing of ships, which are also included in our Tour and Other segment, are recognized ratably over the term of the agreement. Customer Deposits Our payment terms generally require an initial deposit to confirm a reservation, and the balance is received prior to the voyage. Cash received from guests in advance of the cruise is recorded in customer deposits and in other long-term liabilities on our Consolidated Balance Sheets. These amounts include refundable deposits. We had customer deposits of $4.9 billion and $4.7 billion as of February 28, 2019 and December 1, 2018. During the three months ended February 28, 2019, we recognized revenues of $3.0 billion related to our customer deposits as of December 1, 2018. Our customer deposits balance changes due to the seasonal nature of cash collections, the recognition of revenue and foreign currency translation. Contract Receivables Although we generally require full payment from our customers prior to or concurrently with their cruise, we grant credit terms to a relatively small portion of our revenue source. We also have receivables from credit card merchants for cruise ticket purchases and onboard revenue. These receivables are included within trade and other receivables, net. Contract Assets Contract assets are amounts paid prior to the start of a voyage, which we record as an asset within prepaid expenses and other and are subsequently recognized as commissions, transportation, and other at the time of revenue recognition. We have contract assets of $142 million and $151 million as of February 28, 2019 and December 1, 2018. |
Unsecured Debt
Unsecured Debt | 3 Months Ended |
Feb. 28, 2019 | |
Debt Disclosure [Abstract] | |
Unsecured Debt | Unsecured Debt At February 28, 2019 , our short-term borrowings consisted of euro-denominated commercial paper of $768 million . For the three months ended February 28, 2019, there were no borrowings or repayments of commercial paper with original maturities greater than three months. For the three months ended February 28, 2018, we had borrowings of $2 million and repayments of $0 million of commercial paper with original maturities greater than three months. In December 2018, we borrowed $852 million under an export credit facility due in semi-annual installments through 2031. In February 2019, we borrowed $587 million under a euro-denominated export credit facility due in semi-annual installments through 2031. We also entered into an $899 million export credit facility, which may be drawn in euro or U.S. dollars in 2023 and will be due in semi-annual installments through 2035. The interest rate on this export credit facility can be fixed or floating, at our discretion. |
Contingencies
Contingencies | 3 Months Ended |
Feb. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Litigation In the normal course of our business, various claims and lawsuits have been filed or are pending against us. Most of these claims and lawsuits, or any settlement of claims and lawsuits, are covered by insurance and the maximum amount of our liability, net of any insurance recoverables, is typically limited to our self-insurance retention levels. We believe the ultimate outcome of these claims, lawsuits, and settlements, as applicable, each and in the aggregate, will not have a material impact on our consolidated financial statements. Contingent Obligations – Indemnifications Some of the debt contracts we enter into include indemnification provisions obligating us to make payments to the counterparty if certain events occur. These contingencies generally relate to changes in taxes or changes in laws which increase our lender’s costs. There are no stated or notional amounts included in the indemnification clauses, and we are not able to estimate the maximum potential amount of future payments, if any, under these indemnification clauses. |
Fair Value Measurements, Deriva
Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks | 3 Months Ended |
Feb. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks | Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks Fair Value Measurements Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and is measured using inputs in one of the following three categories: • 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. Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, certain estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized in a current or future market exchange. Financial Instruments that are not Measured at Fair Value on a Recurring Basis February 28, 2019 November 30, 2018 Carrying Fair Value Carrying Fair Value (in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Long-term other assets (a) $ 123 $ — $ 31 $ 91 $ 127 $ — $ 30 $ 95 Total $ 123 $ — $ 31 $ 91 $ 127 $ — $ 30 $ 95 Liabilities Fixed rate debt (b) $ 6,875 $ — $ 7,030 $ — $ 5,699 $ — $ 5,799 $ — Floating rate debt (b) 4,822 — 4,867 — 4,695 — 4,727 — Total $ 11,697 $ — $ 11,897 $ — $ 10,394 $ — $ 10,526 $ — (a) Long-term other assets are comprised of notes receivable. The fair values of our Level 2 notes receivable were based on estimated future cash flows discounted at appropriate market interest rates. The fair values of our Level 3 notes receivable were estimated using risk-adjusted discount rates. (b) The debt amounts above do not include the impact of interest rate swaps or debt issuance costs. The fair values of our publicly-traded notes were based on their unadjusted quoted market prices in markets that are not sufficiently active to be Level 1 and, accordingly, are considered Level 2. The fair values of our other debt were estimated based on current market interest rates being applied to this debt. Financial Instruments that are Measured at Fair Value on a Recurring Basis February 28, 2019 November 30, 2018 (in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 649 $ — $ — $ 982 $ — $ — Restricted cash 16 — — 14 — — Derivative financial instruments — 16 — — — — Total $ 665 $ 16 $ — $ 996 $ — $ — Liabilities Derivative financial instruments $ — $ 47 $ — $ — $ 29 $ — Total $ — $ 47 $ — $ — $ 29 $ — Nonfinancial Instruments that are Measured at Fair Value on a Nonrecurring Basis Valuation of Goodwill and Trademarks Goodwill (in millions) NAA (a) EA (b) Total At November 30, 2018 $ 1,898 $ 1,027 $ 2,925 Foreign currency translation adjustment — 18 18 At February 28, 2019 $ 1,898 $ 1,044 $ 2,943 (a) North America & Australia (“NAA”) (b) Europe & Asia (“EA”) Trademarks (in millions) NAA EA Total At November 30, 2018 $ 927 $ 242 $ 1,169 Foreign currency translation adjustment — 5 5 At February 28, 2019 $ 927 $ 247 $ 1,174 The determination of our reporting unit goodwill and trademark fair values includes numerous assumptions that are subject to various risks and uncertainties. We believe that we have made reasonable estimates and judgments. Changes in the conditions or circumstances may result in a need to recognize an impairment charge. Derivative Instruments and Hedging Activities (in millions) Balance Sheet Location February 28, 2019 November 30, 2018 Derivative assets Derivatives designated as hedging instruments Cross currency swaps (a) Prepaid expenses and other $ 16 $ — Total derivative assets $ 16 $ — Derivative liabilities Derivatives designated as hedging instruments Cross currency swaps (a) Accrued liabilities and other $ 6 $ 5 Other long-term liabilities 22 — Interest rate swaps (b) Accrued liabilities and other 7 8 Other long-term liabilities 11 11 47 23 Derivatives not designated as hedging instruments Fuel Accrued liabilities and other — 6 Total derivative liabilities $ 47 $ 29 (a) At February 28, 2019 and November 30, 2018 , we had cross currency swaps totaling $1.0 billion and $156 million , respectively, that are designated as hedges of our net investment in foreign operations with a euro-denominated functional currency. At February 28, 2019 , these cross currency swaps settle through December 2030. (b) We have interest rate swaps designated as cash flow hedges whereby we receive floating interest rate payments in exchange for making fixed interest rate payments. These interest rate swap agreements effectively changed $373 million at February 28, 2019 and $385 million at November 30, 2018 of EURIBOR-based floating rate euro debt to fixed rate euro debt. At February 28, 2019 , these interest rate swaps settle through March 2025. Our derivative contracts include rights of offset with our counterparties. We have elected to net certain of our derivative assets and liabilities within counterparties. February 28, 2019 (in millions) Gross Amounts Gross Amounts Offset in the Balance Sheet Total Net Amounts Presented in the Balance Sheet Gross Amounts not Offset in the Balance Sheet Net Amounts Assets $ 17 $ (1 ) $ 16 $ (6 ) $ 11 Liabilities $ 47 $ (1 ) $ 47 $ (6 ) $ 41 November 30, 2018 (in millions) Gross Amounts Gross Amounts Offset in the Balance Sheet Total Net Amounts Presented in the Balance Sheet Gross Amounts not Offset in the Balance Sheet Net Amounts Assets $ — $ — $ — $ $ — Liabilities $ 29 $ — $ 29 $ — $ 29 The effect of our derivatives qualifying and designated as hedging instruments recognized in other comprehensive income and in income was as follows: Three Months Ended (in millions) 2019 2018 (Losses) gains recognized in AOCI: Cross currency swaps – net investment hedges $ (10 ) $ (6 ) Foreign currency zero cost collars – cash flow hedges $ — $ 1 Interest rate swaps – cash flow hedges $ 1 $ 4 Losses reclassified from AOCI – cash flow hedges: Interest rate swaps – Interest expense, net of capitalized interest $ (2 ) $ (3 ) Gains recognized on derivative instruments (amount excluded from effectiveness testing – net investment hedges) Cross currency swaps – Interest expense, net of capitalized interest $ 4 $ — The amount of estimated cash flow hedges’ unrealized gains and losses that are expected to be reclassified to earnings in the next twelve months is not significant. Financial Risks Fuel Price Risks We manage our exposure to fuel price risk by managing our consumption of fuel. Substantially all of our exposure to market risk for changes in fuel prices relates to the consumption of fuel on our ships. We manage fuel consumption through ship maintenance practices, modifying our itineraries and implementing innovative technologies. We are also adding new, more fuel efficient ships to our fleet and are strategically disposing of smaller, less fuel efficient ships. Foreign Currency Exchange Rate Risks Overall Strategy We manage our exposure to fluctuations in foreign currency exchange rates through our normal operating and financing activities, including netting certain exposures to take advantage of any natural offsets and, when considered appropriate, through the use of derivative and non-derivative financial instruments. Our primary focus is to monitor our exposure to, and manage, the economic foreign currency exchange risks faced by our operations and realized if we exchange one currency for another. We currently only hedge certain of our ship commitments and net investments in foreign operations. The financial impacts of the hedging instruments we do employ generally offset the changes in the underlying exposures being hedged. Operational Currency Risks Our operations primarily utilize the U.S. dollar, Australian dollar, euro or sterling as their functional currencies. Our operations also have revenue and expenses denominated in non-functional currencies. Movements in foreign currency exchange rates will affect our financial statements. Investment Currency Risks We consider our investments in foreign operations to be denominated in stable currencies. Our investments in foreign operations are of a long-term nature. At February 28, 2019 , we had $7.3 billion and $876 million of euro- and sterling-denominated debt, respectively, including the effect of cross currency swaps, which provide an economic offset for our operations with euro and sterling functional currency. We also partially mitigate our net investment currency exposures by denominating a portion of our foreign currency intercompany payables in our foreign operations’ functional currencies. Newbuild Currency Risks Our shipbuilding contracts are typically denominated in euros. Our decision to hedge a non-functional currency ship commitment for our cruise brands is made on a case-by-case basis, considering the amount and duration of the exposure, market volatility, economic trends, our overall expected net cash flows by currency and other offsetting risks. We use foreign currency derivative contracts to manage foreign currency exchange rate risk for some of our ship construction payments. At February 28, 2019 , for the following newbuild, we had foreign currency zero cost collars for a portion of our euro-denominated shipyard payments. These collars are designated as cash flow hedges. Entered Into Matures in Weighted-Average Floor Rate Weighted- Average Ceiling Rate Carnival Panorama 2019 October 2019 $ 1.05 $ 1.28 If the spot rate is between the ceiling and floor rates on the date of maturity, then we would not owe or receive any payments under these collars. At February 28, 2019 , our remaining newbuild currency exchange rate risk primarily relates to euro-denominated newbuild contract payments to non-euro functional currency brands, which represent a total unhedged commitment of $9.3 billion for newbuilds scheduled to be delivered from 2019 through 2025. The cost of shipbuilding orders that we may place in the future that is denominated in a different currency than our cruise brands’ will be affected by foreign currency exchange rate fluctuations. These foreign currency exchange rate fluctuations may affect our decision to order new cruise ships. Interest Rate Risks We manage our exposure to fluctuations in interest rates through our debt portfolio management and investment strategies. We evaluate our debt portfolio to determine whether to make periodic adjustments to the mix of fixed and floating rate debt through the use of interest rate swaps, issuance of new debt, amendment of existing debt or early retirement of existing debt. 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. We seek to minimize these credit risk exposures, 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: • Conducting business with large, well-established financial institutions, insurance companies and export credit agencies • Diversifying our counterparties • Having guidelines regarding credit ratings and investment maturities that we follow to help safeguard liquidity and minimize risk • Generally requiring collateral and/or guarantees to support notes receivable on significant asset sales, long-term ship charters and new ship progress payments to shipyards We believe the risk of nonperformance by any of our significant counterparties is remote. At February 28, 2019 , our exposures under foreign currency contracts, cross currency swaps and interest rate swap agreements were not material. We also monitor the creditworthiness of travel agencies and tour operators in Asia, Australia and Europe, which includes charter-hire agreements in Asia and credit and debit card providers to which we extend credit in the normal course of our business. Our credit exposure also includes contingent obligations related to cash payments received directly by travel agents and tour operators for cash collected by them on cruise sales in Australia and most of Europe where we are obligated to honor our guests’ cruise payments made by them to their travel agents and tour operators regardless of whether we have received these payments. Concentrations of credit risk associated with these trade receivables, charter-hire agreements and contingent obligations are not considered to be material, principally due to the large number of unrelated accounts, the nature of these contingent obligations and their short maturities. We have not experienced significant credit losses on our trade receivables, charter-hire agreements and contingent obligations. We do not normally require collateral or other security to support normal credit sales. |
Segment Information
Segment Information | 3 Months Ended |
Feb. 28, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Our operating 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 President and Chief Executive Officer of Carnival Corporation and Carnival plc. The CODM assesses performance and makes decisions to allocate resources for Carnival Corporation & plc based upon review of the results across all of our segments. Our four reportable segments are comprised of (1) NAA cruise operations, (2) EA cruise operations, (3) Cruise Support and (4) Tour and Other. The operating segments within each of our NAA and EA reportable segments have been aggregated based on the similarity of their economic and other characteristics, including geographic guest sourcing. Our Cruise Support segment includes our portfolio of leading port destinations and other services, all of which are operated for the benefit of our cruise brands. Our Tour and Other segment represents the hotel and transportation operations of Holland America Princess Alaska Tours and other operations. Three Months Ended February 28, (in millions) Revenues Operating costs and Selling Depreciation Operating 2019 NAA $ 3,077 $ 2,010 $ 353 $ 328 $ 386 EA 1,526 1,075 205 152 93 Cruise Support 42 27 65 28 (78 ) Tour and Other 29 29 6 9 (15 ) $ 4,673 $ 3,142 $ 629 $ 516 $ 386 2018 NAA $ 2,684 $ 1,658 $ 367 $ 299 $ 360 EA 1,503 1,005 188 157 154 Cruise Support 32 33 55 23 (78 ) Tour and Other 13 14 6 10 (17 ) $ 4,232 $ 2,709 $ 616 $ 488 $ 419 Revenue by geographic areas, which are based on where our guests are sourced, were as follows: (in millions) Three Months Ended February 28, 2019 North America $ 2,520 Europe 1,399 Australia and Asia 584 Other 170 $ 4,673 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Feb. 28, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Three Months Ended (in millions, except per share data) 2019 2018 Net income for basic and diluted earnings per share $ 336 $ 391 Weighted-average shares outstanding 693 717 Dilutive effect of equity plans 2 2 Diluted weighted-average shares outstanding 695 719 Basic earnings per share $ 0.48 $ 0.54 Diluted earnings per share $ 0.48 $ 0.54 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Feb. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information (in millions) February 28, 2019 November 30, 2018 Cash and cash equivalents (Consolidated Balance Sheets) $ 649 $ 982 Restricted cash included in prepaid expenses and other and other assets 16 14 Total cash, cash equivalents and restricted cash (Consolidated Statements of Cash Flows) $ 665 $ 996 |
Subsequent Event
Subsequent Event | 3 Months Ended |
Feb. 28, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event We have a minority interest in Grand Bahama Shipyard Ltd. (“Grand Bahama”), a ship repair and maintenance facility. On April 1, 2019, there was an incident at Grand Bahama which caused damage to one of the docks of the shipyard. An assessment of the extent of the damage and impact to operations is ongoing. We are evaluating the impact to our consolidated financial statements. |
General (Policies)
General (Policies) | 3 Months Ended |
Feb. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The Consolidated Statements of Income, the Consolidated Statements of Comprehensive Income, the Consolidated Statements of Cash Flows and the Consolidated Statements of Shareholders’ Equity for the three months ended February 28, 2019 and 2018 , and the Consolidated Balance Sheet at February 28, 2019 are unaudited and, in the opinion of our management, contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement. Our interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in the Carnival Corporation & plc 2018 joint Annual Report on Form 10-K (“Form 10-K”) filed with the U.S. Securities and Exchange Commission on January 28, 2019 . Our operations are seasonal and results for interim periods are not necessarily indicative of the results for the entire year. |
Accounting Pronouncements | Accounting Pronouncements The Financial Accounting Standards Board (the “FASB”) issued guidance, Revenue from Contracts with Customers (“ASC 606”) , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. On December 1, 2018, we adopted this guidance using the modified retrospective method to all contracts as of the adoption date. Results for reporting periods beginning after December 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historical accounting under ASC 605. The impact of the adoption of ASC 606 on our consolidated financial statements primarily relates to the gross presentation of prepaid travel agent commissions (Consolidated Balance Sheet), shore excursions and other onboard revenues and costs (Consolidated Statement of Income) which were historically presented net. As of December 1, 2018, we recorded a cumulative effect adjustment of $24 million to retained earnings related to the accounting for our loyalty programs. The following table summarizes the impacts of ASC 606 adoption on our consolidated financial statements as of and for the three months ended February 28, 2019 : (in millions) Prior to adoption of ASC 606 Adjustments As Reported Consolidated Balance Sheet Prepaid expenses and other $ 461 $ 142 $ 603 Total current assets $ 1,959 $ 142 $ 2,101 Customer deposits $ 4,613 $ 142 $ 4,755 Total current liabilities $ 9,501 $ 142 $ 9,642 Consolidated Statement of Income Onboard and other (Revenues) $ 1,123 $ 323 $ 1,446 Revenues (Total) $ 4,350 $ 323 $ 4,673 Onboard and other (Operating Costs and Expenses) $ 145 $ 323 $ 467 Operating Costs and Expenses (Total) $ 3,964 $ 323 $ 4,287 Operating Income $ 386 $ — $ 386 Net Income $ 336 $ — $ 336 Consolidated Statement of Cash Flows Prepaid expenses and other $ (12 ) $ (142 ) $ (154 ) Customer deposits $ 216 $ 142 $ 358 Net cash provided by operating activities $ 1,116 $ — $ 1,116 The FASB issued amended guidance, Business Combinations - Clarifying the Definition of a Business , which assists entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. On December 1, 2018, we adopted this guidance using the prospective transition method. The adoption of this guidance had no impact on our consolidated financial statements. The FASB issued amended guidance, Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments , which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments are aimed at reducing the existing diversity in practice. On December 1, 2018, we adopted this guidance using the retrospective method for each period presented. The adoption of this guidance had no impact on our consolidated financial statements. The FASB issued amended guidance, Statement of Cash Flows - Restricted Cash. On December 1, 2018, we adopted this guidance using the retrospective method for each period presented. As a result, we now present restricted cash with cash and cash equivalents in the statement of cash flows. The reclassified restricted cash balances from investing activities to changes in cash, cash equivalents and restricted cash was not material for the period presented. The FASB issued amended guidance, Service Concession Arrangements, which clarifies that the grantor in a service arrangement should be considered the customer of the operating entity in all cases. On December 1, 2018, we adopted this guidance using the modified retrospective method. The adoption of this guidance had no impact on our consolidated financial statements. The FASB issued amended guidance, Derivatives and Hedging , which targeted improvements to accounting for hedging activities such as hedging strategies, effectiveness assessments, and recognition of derivative gains or losses. On December 1, 2018, we early adopted this guidance using the modified retrospective approach, which did not have a material impact on our financial statements. At the time of adoption, we changed the method by which we assess effectiveness for outstanding net investment hedges from the forward method to the spot method. Under the spot method, the change in fair value of the hedging instrument attributable to hedge effectiveness remains in AOCI until the net investment is sold or liquidated, while the impact attributable to components excluded from the assessment of hedge effectiveness is recorded in interest expense, net of capitalized interest, on a systematic and rational basis. Previous gains or losses incurred under the forward method related to net investment hedges will remain in AOCI within the foreign currency translation adjustments component and will be reclassified to earnings when the net investment is sold or liquidated. As required by this guidance, we have also added certain disclosures about hedging activities and their effect on our consolidated financial statements. The FASB issued guidance, Leases , which requires an entity to recognize both assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. This guidance is required to be adopted by us in the first quarter of 2020 and must be applied using a modified retrospective approach which allows entities to either apply the new lease standard to the beginning of the earliest period presented or only to the current period consolidated financial statements. The initial adoption of this guidance is expected to increase both our total assets and total liabilities, reflecting the lease rights and obligations arising from our lease arrangements, and will require additional disclosures. We are evaluating certain contractual arrangements to determine if they contain an implicit right to use an asset that would qualify as a leasing arrangement under the new guidance. The FASB issued amended guidance, Intangibles - Goodwill and Other - Internal-Use Software, which requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance to determine which implementation costs to capitalize as assets or expense as incurred. The expense related to deferred implementation costs is required to be presented in the same income statement line item as the related hosting fees. Additionally, the payments for deferred implementation costs are required to be presented in the same line item in the statement of cash flows as payments for the related hosting fees. This guidance is required to be adopted by us in the first quarter of 2021 and must be applied using either a prospective or a retrospective approach. Early adoption is permitted. We are currently evaluating the impact this guidance will have on our consolidated financial statements. |
General (Tables)
General (Tables) | 3 Months Ended |
Feb. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Impact ASC 606 Adoption | The following table summarizes the impacts of ASC 606 adoption on our consolidated financial statements as of and for the three months ended February 28, 2019 : (in millions) Prior to adoption of ASC 606 Adjustments As Reported Consolidated Balance Sheet Prepaid expenses and other $ 461 $ 142 $ 603 Total current assets $ 1,959 $ 142 $ 2,101 Customer deposits $ 4,613 $ 142 $ 4,755 Total current liabilities $ 9,501 $ 142 $ 9,642 Consolidated Statement of Income Onboard and other (Revenues) $ 1,123 $ 323 $ 1,446 Revenues (Total) $ 4,350 $ 323 $ 4,673 Onboard and other (Operating Costs and Expenses) $ 145 $ 323 $ 467 Operating Costs and Expenses (Total) $ 3,964 $ 323 $ 4,287 Operating Income $ 386 $ — $ 386 Net Income $ 336 $ — $ 336 Consolidated Statement of Cash Flows Prepaid expenses and other $ (12 ) $ (142 ) $ (154 ) Customer deposits $ 216 $ 142 $ 358 Net cash provided by operating activities $ 1,116 $ — $ 1,116 |
Fair Value Measurements, Deri_2
Fair Value Measurements, Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Feb. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Estimated Carrying and Fair Values of Financial Instrument Assets and Liabilities Not Measured at Fair Value on a Recurring Basis | Financial Instruments that are not Measured at Fair Value on a Recurring Basis February 28, 2019 November 30, 2018 Carrying Fair Value Carrying Fair Value (in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Long-term other assets (a) $ 123 $ — $ 31 $ 91 $ 127 $ — $ 30 $ 95 Total $ 123 $ — $ 31 $ 91 $ 127 $ — $ 30 $ 95 Liabilities Fixed rate debt (b) $ 6,875 $ — $ 7,030 $ — $ 5,699 $ — $ 5,799 $ — Floating rate debt (b) 4,822 — 4,867 — 4,695 — 4,727 — Total $ 11,697 $ — $ 11,897 $ — $ 10,394 $ — $ 10,526 $ — (a) Long-term other assets are comprised of notes receivable. The fair values of our Level 2 notes receivable were based on estimated future cash flows discounted at appropriate market interest rates. The fair values of our Level 3 notes receivable were estimated using risk-adjusted discount rates. (b) The debt amounts above do not include the impact of interest rate swaps or debt issuance costs. The fair values of our publicly-traded notes were based on their unadjusted quoted market prices in markets that are not sufficiently active to be Level 1 and, accordingly, are considered Level 2. The fair values of our other debt were estimated based on current market interest rates being applied to this debt. |
Estimated Fair Value and Basis of Valuation of Financial Instrument Assets and Liabilities Measured at Fair Value on Recurring Basis | Financial Instruments that are Measured at Fair Value on a Recurring Basis February 28, 2019 November 30, 2018 (in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 649 $ — $ — $ 982 $ — $ — Restricted cash 16 — — 14 — — Derivative financial instruments — 16 — — — — Total $ 665 $ 16 $ — $ 996 $ — $ — Liabilities Derivative financial instruments $ — $ 47 $ — $ — $ 29 $ — Total $ — $ 47 $ — $ — $ 29 $ — |
Reconciliation of Changes in Carrying Amounts of Goodwill | Valuation of Goodwill and Trademarks Goodwill (in millions) NAA (a) EA (b) Total At November 30, 2018 $ 1,898 $ 1,027 $ 2,925 Foreign currency translation adjustment — 18 18 At February 28, 2019 $ 1,898 $ 1,044 $ 2,943 (a) North America & Australia (“NAA”) (b) Europe & Asia (“EA”) |
Reconciliation of Changes in Carrying Amounts of Trademarks | Trademarks (in millions) NAA EA Total At November 30, 2018 $ 927 $ 242 $ 1,169 Foreign currency translation adjustment — 5 5 At February 28, 2019 $ 927 $ 247 $ 1,174 |
Estimated Fair Values of Derivative Financial Instruments and Location in the Consolidated Balance Sheets | Derivative Instruments and Hedging Activities (in millions) Balance Sheet Location February 28, 2019 November 30, 2018 Derivative assets Derivatives designated as hedging instruments Cross currency swaps (a) Prepaid expenses and other $ 16 $ — Total derivative assets $ 16 $ — Derivative liabilities Derivatives designated as hedging instruments Cross currency swaps (a) Accrued liabilities and other $ 6 $ 5 Other long-term liabilities 22 — Interest rate swaps (b) Accrued liabilities and other 7 8 Other long-term liabilities 11 11 47 23 Derivatives not designated as hedging instruments Fuel Accrued liabilities and other — 6 Total derivative liabilities $ 47 $ 29 (a) At February 28, 2019 and November 30, 2018 , we had cross currency swaps totaling $1.0 billion and $156 million , respectively, that are designated as hedges of our net investment in foreign operations with a euro-denominated functional currency. At February 28, 2019 , these cross currency swaps settle through December 2030. (b) We have interest rate swaps designated as cash flow hedges whereby we receive floating interest rate payments in exchange for making fixed interest rate payments. These interest rate swap agreements effectively changed $373 million at February 28, 2019 and $385 million at November 30, 2018 of EURIBOR-based floating rate euro debt to fixed rate euro debt. At February 28, 2019 , these interest rate swaps settle through March 2025. |
Offsetting Derivative Instruments | Our derivative contracts include rights of offset with our counterparties. We have elected to net certain of our derivative assets and liabilities within counterparties. February 28, 2019 (in millions) Gross Amounts Gross Amounts Offset in the Balance Sheet Total Net Amounts Presented in the Balance Sheet Gross Amounts not Offset in the Balance Sheet Net Amounts Assets $ 17 $ (1 ) $ 16 $ (6 ) $ 11 Liabilities $ 47 $ (1 ) $ 47 $ (6 ) $ 41 November 30, 2018 (in millions) Gross Amounts Gross Amounts Offset in the Balance Sheet Total Net Amounts Presented in the Balance Sheet Gross Amounts not Offset in the Balance Sheet Net Amounts Assets $ — $ — $ — $ $ — Liabilities $ 29 $ — $ 29 $ — $ 29 |
Derivatives Qualifying and Designated as Hedging Instruments Recognized in Other Comprehensive Income | The effect of our derivatives qualifying and designated as hedging instruments recognized in other comprehensive income and in income was as follows: Three Months Ended (in millions) 2019 2018 (Losses) gains recognized in AOCI: Cross currency swaps – net investment hedges $ (10 ) $ (6 ) Foreign currency zero cost collars – cash flow hedges $ — $ 1 Interest rate swaps – cash flow hedges $ 1 $ 4 Losses reclassified from AOCI – cash flow hedges: Interest rate swaps – Interest expense, net of capitalized interest $ (2 ) $ (3 ) Gains recognized on derivative instruments (amount excluded from effectiveness testing – net investment hedges) Cross currency swaps – Interest expense, net of capitalized interest $ 4 $ — |
Outstanding Fuel Derivatives | At February 28, 2019 , for the following newbuild, we had foreign currency zero cost collars for a portion of our euro-denominated shipyard payments. These collars are designated as cash flow hedges. Entered Into Matures in Weighted-Average Floor Rate Weighted- Average Ceiling Rate Carnival Panorama 2019 October 2019 $ 1.05 $ 1.28 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Feb. 28, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Three Months Ended February 28, (in millions) Revenues Operating costs and Selling Depreciation Operating 2019 NAA $ 3,077 $ 2,010 $ 353 $ 328 $ 386 EA 1,526 1,075 205 152 93 Cruise Support 42 27 65 28 (78 ) Tour and Other 29 29 6 9 (15 ) $ 4,673 $ 3,142 $ 629 $ 516 $ 386 2018 NAA $ 2,684 $ 1,658 $ 367 $ 299 $ 360 EA 1,503 1,005 188 157 154 Cruise Support 32 33 55 23 (78 ) Tour and Other 13 14 6 10 (17 ) $ 4,232 $ 2,709 $ 616 $ 488 $ 419 |
Schedule of Revenue by Geographical Area | Revenue by geographic areas, which are based on where our guests are sourced, were as follows: (in millions) Three Months Ended February 28, 2019 North America $ 2,520 Europe 1,399 Australia and Asia 584 Other 170 $ 4,673 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Feb. 28, 2019 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Share Computation | Three Months Ended (in millions, except per share data) 2019 2018 Net income for basic and diluted earnings per share $ 336 $ 391 Weighted-average shares outstanding 693 717 Dilutive effect of equity plans 2 2 Diluted weighted-average shares outstanding 695 719 Basic earnings per share $ 0.48 $ 0.54 Diluted earnings per share $ 0.48 $ 0.54 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Feb. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Supplemental Cash Flow Information | (in millions) February 28, 2019 November 30, 2018 Cash and cash equivalents (Consolidated Balance Sheets) $ 649 $ 982 Restricted cash included in prepaid expenses and other and other assets 16 14 Total cash, cash equivalents and restricted cash (Consolidated Statements of Cash Flows) $ 665 $ 996 |
General (Details)
General (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Feb. 28, 2019 | Feb. 28, 2018 | Dec. 01, 2018 | Nov. 30, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Retained earnings | $ 25,033 | $ 25,066 | ||
Prepaid expenses and other | 603 | 436 | ||
Total current assets | 2,101 | 2,225 | ||
Customer deposits | 4,755 | 4,395 | ||
Total current liabilities | 9,642 | $ 9,204 | ||
Revenues | 4,673 | $ 4,232 | ||
Operating costs and expenses | 4,287 | 3,813 | ||
Operating income | 386 | 419 | ||
Net Income | 336 | 391 | ||
Prepaid expenses and other | (154) | 98 | ||
Customer deposits | 358 | 271 | ||
Net cash provided by operating activities | 1,116 | 1,064 | ||
Cruise onboard and other | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | 1,446 | 1,071 | ||
Cruise | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Onboard and other | 467 | $ 140 | ||
Prior to adoption of ASC 606 | ASC 606 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Prepaid expenses and other | 461 | |||
Total current assets | 1,959 | |||
Customer deposits | 4,613 | |||
Total current liabilities | 9,501 | |||
Revenues | 4,350 | |||
Operating costs and expenses | 3,964 | |||
Operating income | 386 | |||
Net Income | 336 | |||
Prepaid expenses and other | (12) | |||
Customer deposits | 216 | |||
Net cash provided by operating activities | 1,116 | |||
Prior to adoption of ASC 606 | ASC 606 | Cruise onboard and other | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | 1,123 | |||
Prior to adoption of ASC 606 | ASC 606 | Cruise | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Onboard and other | 145 | |||
Adjustments | ASC 606 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Retained earnings | $ 24 | |||
Prepaid expenses and other | 142 | |||
Total current assets | 142 | |||
Customer deposits | 142 | |||
Total current liabilities | 142 | |||
Revenues | 323 | |||
Operating costs and expenses | 323 | |||
Operating income | 0 | |||
Net Income | 0 | |||
Prepaid expenses and other | (142) | |||
Customer deposits | 142 | |||
Net cash provided by operating activities | 0 | |||
Adjustments | ASC 606 | Cruise onboard and other | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | 323 | |||
Adjustments | ASC 606 | Cruise | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Onboard and other | $ 323 |
Revenue and Expense Recogniti_2
Revenue and Expense Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Dec. 01, 2018 | |
Disaggregation of Revenue [Line Items] | |||
Fees, taxes, and charges | $ 163 | $ 148 | |
Contract asset | 142 | $ 151 | |
Cruise | |||
Disaggregation of Revenue [Line Items] | |||
Customer deposits | 4,900 | $ 4,700 | |
Revenues recognized related to customer deposits at beginning of period | $ 3,000 |
Unsecured Debt (Details)
Unsecured Debt (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Feb. 28, 2019 | Dec. 31, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Euro-denominated bank loan | Export credit facility due 2031 | ||||
Debt Instrument [Line Items] | ||||
Proceeds from long-term debt | $ 587 | |||
Export credit facility | Export credit facility due 2031 | ||||
Debt Instrument [Line Items] | ||||
Proceeds from long-term debt | $ 852 | |||
Export credit facility | Export credit facility due 2035 | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | 899 | $ 899 | ||
Commercial paper | ||||
Debt Instrument [Line Items] | ||||
Current unsecured debt | $ 768 | 768 | ||
Proceeds from short term debt | 0 | $ 2 | ||
Repayments of short term debt | $ 0 | $ 0 |
Fair Value Measurements, Deri_3
Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks - Estimated Carrying and Fair Values of Financial Instrument Assets and Liabilities Not Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Millions | Feb. 28, 2019 | Nov. 30, 2018 |
Carrying Value | ||
Assets | ||
Long-term other assets | $ 123 | $ 127 |
Total | 123 | 127 |
Liabilities | ||
Total | 11,697 | 10,394 |
Carrying Value | Fixed rate debt | ||
Liabilities | ||
Debt | 6,875 | 5,699 |
Carrying Value | Floating rate debt | ||
Liabilities | ||
Debt | 4,822 | 4,695 |
Fair Value | Level 1 | ||
Assets | ||
Long-term other assets | 0 | 0 |
Total | 0 | 0 |
Liabilities | ||
Total | 0 | 0 |
Fair Value | Level 1 | Fixed rate debt | ||
Liabilities | ||
Debt | 0 | 0 |
Fair Value | Level 1 | Floating rate debt | ||
Liabilities | ||
Debt | 0 | 0 |
Fair Value | Level 2 | ||
Assets | ||
Long-term other assets | 31 | 30 |
Total | 31 | 30 |
Liabilities | ||
Total | 11,897 | 10,526 |
Fair Value | Level 2 | Fixed rate debt | ||
Liabilities | ||
Debt | 7,030 | 5,799 |
Fair Value | Level 2 | Floating rate debt | ||
Liabilities | ||
Debt | 4,867 | 4,727 |
Fair Value | Level 3 | ||
Assets | ||
Long-term other assets | 91 | 95 |
Total | 91 | 95 |
Liabilities | ||
Total | 0 | 0 |
Fair Value | Level 3 | Fixed rate debt | ||
Liabilities | ||
Debt | 0 | 0 |
Fair Value | Level 3 | Floating rate debt | ||
Liabilities | ||
Debt | $ 0 | $ 0 |
Fair Value Measurements, Deri_4
Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks - Estimated Fair Value and Basis of Valuation of Financial Instrument Assets And Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Millions | Feb. 28, 2019 | Nov. 30, 2018 |
Assets | ||
Derivative financial instruments | $ 17 | |
Liabilities | ||
Derivative financial instruments | 47 | $ 29 |
Financial Instruments Measured at Fair Value on a Recurring Basis | Level 1 | ||
Assets | ||
Restricted cash | 16 | 14 |
Total | 665 | 996 |
Financial Instruments Measured at Fair Value on a Recurring Basis | Level 1 | Money market funds | ||
Assets | ||
Cash and cash equivalents | 649 | 982 |
Financial Instruments Measured at Fair Value on a Recurring Basis | Level 2 | ||
Assets | ||
Total | 16 | |
Liabilities | ||
Total | 47 | 29 |
Financial Instruments Measured at Fair Value on a Recurring Basis | Level 2 | Derivative financial instruments, assets | ||
Assets | ||
Derivative financial instruments | 16 | |
Financial Instruments Measured at Fair Value on a Recurring Basis | Level 2 | Derivative financial instruments, liabilities | ||
Liabilities | ||
Derivative financial instruments | $ 47 | $ 29 |
Fair Value Measurements, Deri_5
Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks - Reconciliation of Changes in Carrying Amounts of Goodwill (Details) $ in Millions | 3 Months Ended |
Feb. 28, 2019USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 2,925 |
Foreign currency translation adjustment | 18 |
Ending balance | 2,943 |
NAA Segment | |
Goodwill [Roll Forward] | |
Beginning balance | 1,898 |
Foreign currency translation adjustment | 0 |
Ending balance | 1,898 |
EA Segment | |
Goodwill [Roll Forward] | |
Beginning balance | 1,027 |
Foreign currency translation adjustment | 18 |
Ending balance | $ 1,044 |
Fair Value Measurements, Deri_6
Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks - Reconciliation of Changes in Carrying Amounts of Intangible Assets Not Subject to Amortization (Details) $ in Millions | 3 Months Ended |
Feb. 28, 2019USD ($) | |
Indefinite-lived Intangible Assets [Roll Forward] | |
Beginning balance | $ 1,169 |
Foreign currency translation adjustment | 5 |
Ending balance | 1,174 |
NAA Segment | |
Indefinite-lived Intangible Assets [Roll Forward] | |
Beginning balance | 927 |
Foreign currency translation adjustment | 0 |
Ending balance | 927 |
EA Segment | |
Indefinite-lived Intangible Assets [Roll Forward] | |
Beginning balance | 242 |
Foreign currency translation adjustment | 5 |
Ending balance | $ 247 |
Fair Value Measurements, Deri_7
Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks - Estimated Fair Values of Derivative Financial Instruments and Location on Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Feb. 28, 2019 | Nov. 30, 2018 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 16 | |
Derivative liabilities | 47 | $ 29 |
Derivatives designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 16 | |
Derivative liabilities | 47 | 23 |
Cross currency swaps – net investment hedges | Derivatives designated as hedging instruments | Prepaid expenses and other | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 16 | 0 |
Cross currency swaps – net investment hedges | Derivatives designated as hedging instruments | Accrued liabilities and other | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 6 | 5 |
Cross currency swaps – net investment hedges | Derivatives designated as hedging instruments | Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 22 | 0 |
Interest rate swaps | Derivatives designated as hedging instruments | Accrued liabilities and other | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 7 | 8 |
Interest rate swaps | Derivatives designated as hedging instruments | Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 11 | 11 |
Interest rate swaps | Cash flow hedging | ||
Derivatives, Fair Value [Line Items] | ||
Interest rate cash flow hedge asset at fair value | 373 | 385 |
Fuel | Derivatives not designated as hedging instruments | Accrued liabilities and other | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 0 | 6 |
Currency swap | Derivatives designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ 1,000 | $ 156 |
Fair Value Measurements, Deri_8
Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks - Offsetting Derivative Instruments (Details) - USD ($) $ in Millions | Feb. 28, 2019 | Nov. 30, 2018 |
Assets | ||
Gross Amounts | $ 17 | |
Gross Amounts Offset in the Balance Sheet | (1) | $ 0 |
Total Net Amounts Presented in the Balance Sheet | 16 | |
Gross Amounts not Offset in the Balance Sheet | (6) | 0 |
Net Amounts | 11 | 0 |
Liabilities | ||
Gross Amounts | 47 | 29 |
Gross Amounts Offset in the Balance Sheet | (1) | 0 |
Total Net Amounts Presented in the Balance Sheet | 47 | 29 |
Gross Amounts not Offset in the Balance Sheet | (6) | 0 |
Net Amounts | $ 41 | $ 29 |
Fair Value Measurements, Deri_9
Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks - Derivatives Qualifying and Designated as Hedging Instruments Recognized in Other Comprehensive Income (Details) - Designated as hedging instruments - USD ($) $ in Millions | 3 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Cross currency swaps – net investment hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
(Losses) gains recognized in AOCI, net investment hedges | $ (10) | $ (6) |
Foreign currency zero cost collars – cash flow hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
(Losses) gains recognized in AOCI, cash flow hedges | 0 | 1 |
Interest rate swaps – cash flow hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
(Losses) gains recognized in AOCI, cash flow hedges | 1 | 4 |
Losses reclassified from AOCI – cash flow hedges | (2) | (3) |
Cross currency swaps – Interest expense, net of capitalized interest | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Cross currency swaps – Interest expense, net of capitalized interest | $ 4 | $ 0 |
Fair Value Measurements, Der_10
Fair Value Measurements, Derivative Instruments and Hedging Activities and Financial Risks - Foreign Currency Exchange Rate Risks (Details) | Feb. 28, 2019USD ($) |
Fair Value, Measurement Inputs, Disclosure [Line Items] | |
Foreign currency contract commitments | $ 9,300,000,000 |
Foreign currency zero cost collars – cash flow hedges | Carnival Panorama | Cash flow hedging | |
Fair Value, Measurement Inputs, Disclosure [Line Items] | |
Weighted-Average Floor Rate | 1.05 |
Weighted- Average Ceiling Rate | 1.28 |
Euro-denominated | |
Fair Value, Measurement Inputs, Disclosure [Line Items] | |
Debt instrument, face amount | $ 7,300,000,000 |
Sterling-denominated | |
Fair Value, Measurement Inputs, Disclosure [Line Items] | |
Debt instrument, face amount | $ 876,000,000 |
Segment Information - Segment R
Segment Information - Segment Reporting (Details) $ in Millions | 3 Months Ended | |
Feb. 28, 2019USD ($)segment | Feb. 28, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | segment | 4 | |
Revenues | $ 4,673 | $ 4,232 |
Operating costs and expenses | 3,142 | 2,709 |
Selling and administrative | 629 | 616 |
Depreciation and amortization | 516 | 488 |
Operating Income | 386 | 419 |
Operating Segments | NAA | ||
Segment Reporting Information [Line Items] | ||
Revenues | 3,077 | 2,684 |
Operating costs and expenses | 2,010 | 1,658 |
Selling and administrative | 353 | 367 |
Depreciation and amortization | 328 | 299 |
Operating Income | 386 | 360 |
Operating Segments | EA | ||
Segment Reporting Information [Line Items] | ||
Revenues | 1,526 | 1,503 |
Operating costs and expenses | 1,075 | 1,005 |
Selling and administrative | 205 | 188 |
Depreciation and amortization | 152 | 157 |
Operating Income | 93 | 154 |
Operating Segments | Cruise Support | ||
Segment Reporting Information [Line Items] | ||
Revenues | 42 | 32 |
Operating costs and expenses | 27 | 33 |
Selling and administrative | 65 | 55 |
Depreciation and amortization | 28 | 23 |
Operating Income | (78) | (78) |
Operating Segments | Tour and Other | ||
Segment Reporting Information [Line Items] | ||
Revenues | 29 | 13 |
Operating costs and expenses | 29 | 14 |
Selling and administrative | 6 | 6 |
Depreciation and amortization | 9 | 10 |
Operating Income | $ (15) | $ (17) |
Segment Information - Geographi
Segment Information - Geographic Area Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 4,673 | $ 4,232 |
North America | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 2,520 | |
Europe | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 1,399 | |
Australia and Asia | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 584 | |
Other | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 170 |
Earnings Per Share - Basic and
Earnings Per Share - Basic and Diluted Earnings Per Share Computation (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Earnings Per Share [Abstract] | ||
Net income for basic and diluted earnings per share | $ 336 | $ 391 |
Weighted-average shares outstanding (in shares) | 693 | 717 |
Dilutive effect of equity plans (in shares) | 2 | 2 |
Diluted weighted-average shares outstanding (in shares) | 695 | 719 |
Basic earnings per share (in dollars per share) | $ 0.48 | $ 0.54 |
Diluted earnings per share (in dollars per share) | $ 0.48 | $ 0.54 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | Feb. 28, 2019 | Nov. 30, 2018 | Feb. 28, 2018 | Nov. 30, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 649 | $ 982 | ||
Restricted cash | 16 | 14 | ||
Total cash, cash equivalents and restricted cash | $ 665 | $ 996 | $ 482 | $ 422 |
Uncategorized Items - ccl-20190
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (24,000,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (24,000,000) |