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

6 Months Ended

May 31, 2012

Estimated Carrying and Fair Values of Financial Instrument Assets and (Liabilities) Not Measured at Fair Value on Recurring Basis

The estimated carrying and fair values and basis of valuation of our financial instrument assets and (liabilities) that are not measured at fair value on a recurring basis were as follows (in millions):

	May 31, 2012								November 30, 2011
	Carrying Value			Fair Value					Carrying Value			Fair Value
				Level 1		Level 2						Level 1		Level 2
Cash and cash equivalents (a)	$	257		$	257	$	-		$	358		$	358	$	-
Long-term other assets (b)	$	40		$	2	$	35		$	42		$	2	$	39
Fixed rate debt (c)	$	(5,719	)	$	-	$	(6,251	)	$	(6,251	)	$	-	$	(6,715	)
Floating rate debt (c)	$	(4,281	)	$	-	$	(4,182	)	$	(3,102	)	$	-	$	(3,057	)

(a) Cash and cash equivalents are comprised of cash on hand and time deposits and, due to their short maturities, the carrying values approximate their fair values.

(b) At May 31, 2012 and November 30, 2011, substantially all of our long-term other assets were comprised of notes and other receivables. The fair values of notes and other receivables were based on estimated future cash flows discounted at appropriate market interest rates.

(c) The net difference between the fair value of our fixed rate debt and its carrying value was due to the market interest rates in existence at May 31, 2012 and November 30, 2011 being lower than the fixed interest rates on these debt obligations, including the impact of changes in our credit ratings, if any. The net difference between the fair value of our floating rate debt and its carrying value was due to the market interest rates in existence at May 31, 2012 and November 30, 2011 being higher than the floating interest rates on these debt obligations, including the impact of changes in our credit ratings, if any. The fair values of our publicly-traded notes were based on their unadjusted quoted market prices in active markets. The fair values of our other debt were estimated based on appropriate 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

The estimated fair value and basis of valuation of our financial instrument assets and (liabilities) that are measured at fair value on a recurring basis were as follows (in millions):

	May 31, 2012					November 30, 2011
	Level 1		Level 2			Level 1		Level 2
Cash equivalents (a)	$	643	$	-		$	92	$	-
Restricted cash (b)	$	30	$	-		$	11	$	-
Marketable securities held in rabbi trusts (c)	$	100	$	16		$	98	$	18
Derivatives
Fuel, net (d)	$	-	$	(123	)	$	-	$	1
Net investment hedges (e)	$	-	$	46		$	-	$	2
Interest rate swaps (f)	$	-	$	9		$	-	$	(9	)

(a) Cash equivalents are comprised of money market funds.

(b) Restricted cash is comprised of money market funds.

(c) Level 1 and 2 marketable securities are held in rabbi trusts and are primarily comprised of frequently-priced mutual funds invested in common stocks and other investments, respectively. Their use is restricted to funding certain deferred compensation and non-qualified U.S. pension plans.

(d) At May 31, 2012, we had fuel derivatives consisting of zero cost collars on Brent crude oil (“Brent”) to cover a portion of our estimated fuel consumption for the second half of fiscal 2012 through fiscal 2015. See “Fuel Price Risks” below for additional information regarding these fuel derivatives. At November 30, 2011, we had fuel derivatives consisting of zero cost collars on Brent to cover 10% of our estimated fuel consumption for the second half of fiscal 2012 through fiscal 2015.

(e) At May 31, 2012 and November 30, 2011, we had foreign currency forwards totaling $668 million and $183 million, respectively, that are designated as hedges of our net investments in foreign operations, which have a euro-denominated functional currency. At May 31, 2012, $512 million of our foreign currency forwards mature through June 2012 and $156 million mature through July 2017.

(f) We had both U.S. dollar and sterling interest rate swaps designated as fair value hedges whereby we receive fixed interest rate payments in exchange for making floating interest rate payments. At May 31, 2012 and November 30, 2011, these interest rate swap agreements effectively changed $313 million and $510 million, respectively, of fixed rate debt to U.S. dollar LIBOR or GBP LIBOR-based floating rate debt. The U.S. dollar and sterling interest rate swaps matured in February 2012 and June 2012, respectively. In addition, we have euro interest rate swaps designated as cash flow hedges whereby we receive floating interest rate payments in exchange for making fixed interest rate payments. At May 31, 2012 and November 30, 2011, these interest rate swap agreements effectively changed $273 million and $320 million, respectively, of EURIBOR-based floating rate euro debt to fixed rate debt. These interest rate swaps mature through February 2022.

Reconciliation of Changes in Carrying Amounts of Goodwill

The reconciliation of the changes in the carrying amounts of our goodwill, which goodwill has been allocated to our North America and Europe, Australia and Asia (“EAA”) cruise brands, was as follows (in millions):

	North America Cruise Brands		EAA Cruise Brands			Total
Balance at November 30, 2011	$	1,898	$	1,424		$	3,322
Ibero goodwill impairment charge		-		(153	)		(153	)
Foreign currency translation adjustment		-		(34	)		(34	)
Balance at May 31, 2012	$	1,898	$	1,237		$	3,135

Reconciliation of Changes in Carrying Amounts of Intangible Assets Not Subject to Amortization, which Represents Trademarks

The reconciliation of the changes in the carrying amounts of our intangible assets not subject to amortization, which represent trademarks that have been allocated to our North America and EAA cruise brands, was as follows (in millions):

	North America Cruise Brands		EAA Cruise Brands			Total
Balance at November 30, 2011	$	927	$	386		$	1,313
Ibero trademarks impairment charge		-		(20	)		(20	)
Foreign currency translation adjustment		-		(7	)		(7	)
Balance at May 31, 2012	$	927	$	359		$	1,286

Fuel Derivatives Outstanding

At May 31, 2012, our outstanding fuel derivatives consisted of zero cost collars on Brent to cover a portion of our estimated fuel consumption as follows:

Maturities (a)	Transaction Dates	Barrels (in  thousands)		Weighted-Average Floor  Prices		Weighted-Average Ceiling  Prices		Percent of Estimated Fuel Consumption Covered
Fiscal 2012-Q3 & Q4
	November 2011		1,044	$	75	$	135
	February 2012		1,044	$	109	$	128
	March 2012		2,088	$	112	$	132
			4,176						38	%
Fiscal 2013
	November 2011		2,112	$	74	$	132
	February 2012		2,112	$	98	$	127
	March 2012		4,224	$	100	$	130
			8,448						38	%
Fiscal 2014
	November 2011		2,112	$	71	$	128
	February 2012		2,112	$	88	$	125
			4,224						19	%
Fiscal 2015
	November 2011		2,160	$	71	$	125
	February 2012		2,160	$	80	$	125
			4,320						19	%

(a) Fuel derivatives mature evenly over each month within the above fiscal periods.