Fair Value Measurements, Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Aug. 31, 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 

	August 31, 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)	$	186	$	—	$	31	$	154	$	127	$	—	$	30	$	95
Total	$	186	$	—	$	31	$	154	$	127	$	—	$	30	$	95
Liabilities
Fixed rate debt (b)	$	6,560	$	—	$	6,947	$	—	$	5,699	$	—	$	5,799	$	—
Floating rate debt (b)	4,278		—		4,338		—		4,695		—		4,727		—
Total	$	10,839	$	—	$	11,285	$	—	$	10,394	$	—	$	10,526	$	—

(a) Long-term other assets are comprised of notes receivables, which include loans on ship sales. 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

	August 31, 2019						November 30, 2018
(in millions)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	1,153	$	—	$	—	$	982	$	—	$	—
Restricted cash	16		—		—		14		—		—
Derivative financial instruments	—		37		—		—		—		—
Total	$	1,170	$	37	$	—	$	996	$	—	$	—
Liabilities
Derivative financial instruments	$	—	$	25	$	—	$	—	$	29	$	—
Total	$	—	$	25	$	—	$	—	$	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	—		(39		)	(39		)
At August 31, 2019	$	1,898	$	988		$	2,886

(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	—		(10		)	(10		)
At August 31, 2019	$	927	$	232		$	1,159

Estimated Fair Values of Derivative Financial Instruments and Location in the Consolidated Balance Sheets

Derivative Instruments and Hedging Activities  

(in millions)	Balance Sheet Location	August 31, 2019		November 30, 2018
Derivative assets
Derivatives designated as hedging instruments
Cross currency swaps (a)	Prepaid expenses and other	$	20	$	—
	Other assets	18		—
Total derivative assets		$	37	$	—
Derivative liabilities
Derivatives designated as hedging instruments
Cross currency swaps (a)	Accrued liabilities and other	$	—	$	5
Foreign currency zero cost collars (b)	Accrued liabilities and other	5		—
Interest rate swaps (c)	Accrued liabilities and other	7		8
	Other long-term liabilities	12		11
		25		23
Derivatives not designated as hedging instruments
Fuel	Accrued liabilities and other	—		6
Total derivative liabilities		$	25	$	29

(a) At August 31, 2019 and November 30, 2018, we had cross currency swaps totaling $943 million and $156 million, respectively, that are designated as hedges of our net investment in foreign operations with a euro-denominated functional currency. At August 31, 2019, these cross currency swaps settle through December 2030.

(b) At August 31, 2019, we had foreign currency derivatives consisting of foreign currency zero cost collars that are designated as foreign currency cash flow hedges for a portion of our euro-denominated shipbuilding payments. See “Newbuild Currency Risks” below for additional information regarding these derivatives.

(c)

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 $326 million at August 31, 2019 and $385 million at November 30, 2018 of EURIBOR-based floating rate euro debt to fixed rate euro debt. At August 31, 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.

	August 31, 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	$	38	$	(1	)	$	37	$	(1	)	$	36
Liabilities	$	26	$	(1	)	$	25	$	(1	)	$	24
	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

Outstanding Fuel Derivatives

The effect of our derivatives qualifying and designated as hedging instruments recognized in other comprehensive income (loss) and in income was as follows:

	Three Months Ended August 31,						Nine Months Ended August 31,
(in millions)	2019			2018			2019			2018
Gains (losses) recognized in AOCI:
Cross currency swaps – net investment hedges	$	19		$	3		$	38		$	13
Foreign currency zero cost collars – cash flow hedges	$	(4	)	$	(1	)	$	(5	)	$	(11	)
Interest rate swaps – cash flow hedges	$	(1	)	$	1		$	(1	)	$	5
Gains (losses) reclassified from AOCI – cash flow hedges:
Interest rate swaps – Interest expense, net of capitalized interest	$	(2	)	$	(2	)	$	(6	)	$	(8	)
Foreign currency zero cost collars – Depreciation and amortization	$	—		$	—		$	1		$	—
Gains (losses) recognized on derivative instruments (amount excluded from effectiveness testing – net investment hedges)
Cross currency swaps – Interest expense, net of capitalized interest	$	6		$	—		$	16		$	—

At August 31, 2019, for the following newbuilds, 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
Enchanted Princess	2019	June 2020	$	1.04	$	1.28
Mardi Gras	2019	August 2020	$	1.04	$	1.28