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 Value		Fair Value						Carrying Value		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) Segment		EA (b) Segment		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 Segment		EA Segment		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 February 28,
(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