REG - Carnival PLC - Half Yearly Report <Origin Href="QuoteRef">CCL.L</Origin> - Part 4
16/07/2015 13:41
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Net losses on cash flow derivative hedges (31 ) (19 )
(790 ) 68
Other Comprehensive (Loss) Income (799 ) 72
Total Comprehensive (Loss) Income $ (731 ) $ 152
The accompanying notes are an integral part of these interim financial statements. These interim financial statements only
present the Carnival plc consolidated IFRS Interim Financial Statements and, accordingly, do not include the consolidated
IFRS results of Carnival Corporation.
Within the DLC arrangement the most appropriate presentation of Carnival plc's results and financial position is considered
to be by reference to the DLC Financial Statements, which are included within the attached Schedule A (see Note 1).
CARNIVAL PLC
INTERIM CONDENSED GROUP BALANCE SHEETS
(UNAUDITED)
(in millions)
May 31, November 30,
2015 2014
ASSETS
Current Assets
Cash and cash equivalents $ 154 $ 217
Trade and other receivables, net 191 145
Insurance recoverables 184 166
Inventories, net 113 127
Prepaid expenses and other 94 129
Total current assets 736 784
Property and Equipment, Net 12,905 13,659
Intangibles 607 669
Other Assets 139 216
$ 14,387 $ 15,328
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ 44 $ 14
Current portion of long-term debt 284 518
Amount owed to the Carnival Corporation group 1,623 1,513
Accounts payable 269 328
Dividends payable 54 54
Claims reserve 198 178
Accrued liabilities and other 277 348
Customer deposits 1,262 1,208
Total current liabilities 4,011 4,161
Long-Term Debt 2,215 2,130
Other Long-Term Liabilities 236 283
Shareholders' Equity
Share capital 358 358
Share premium 142 137
Retained earnings 7,791 7,835
Other reserves (366 ) 424
Total shareholders' equity 7,925 8,754
$ 14,387 $ 15,328
The accompanying notes are an integral part of these interim financial statements. These interim financial statements only
present the Carnival plc consolidated IFRS Interim Financial Statements and, accordingly, do not include the consolidated
IFRS results of Carnival Corporation.
Within the DLC arrangement the most appropriate presentation of Carnival plc's results and financial position is considered
to be by reference to the DLC Financial Statements, which are included within the attached Schedule A (see Note 1).
CARNIVAL PLC
INTERIM CONDENSED GROUP STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in millions)
Six Months Ended May 31,
2015 2014
(restated)
OPERATING ACTIVITIES
Income before income taxes $ 72 $ 81
Adjustments to reconcile income before income taxes to net cash provided byoperating activities
Depreciation and amortisation 306 335
Share-based compensation 4 4
Ship impairment - 22
Gain on ship sale - (37 )
Interest expense, net 28 35
Other, net 10 3
420 443
Changes in operating assets and liabilities
Receivables (54 ) 29
Inventories 3 13
Insurance recoverables, prepaid expenses and other 73 237
Accounts payable (31 ) (32 )
Claims reserve and accrued and other liabilities (106 ) (202 )
Customer deposits 130 84
Cash provided by operations before interest and taxes 435 572
Interest received 1 2
Interest paid (34 ) (40 )
Income taxes paid, net (24 ) (3 )
Net cash provided by operating activities 378 531
INVESTING ACTIVITIES
Additions to property and equipment (744 ) (244 )
Proceeds from sale of ship - 42
Other, net 22 10
Net cash used in investing activities (722 ) (192 )
FINANCING ACTIVITIES
Changes in loans with the Carnival Corporation group 259 (771 )
Proceeds from short-term borrowings, net 33 448
Principal repayments of long-term debt (344 ) (219 )
Proceeds from issuance of long-term debt 472 275
Dividends paid (108 ) (107 )
Other, net (2 ) (2 )
Net cash provided by (used in) financing activities 310 (376 )
Effect of exchange rate changes on cash and cash equivalents (29 ) (7 )
Net decrease in cash and cash equivalents (63 ) (44 )
Cash and cash equivalents at beginning of period 217 263
Cash and cash equivalents at end of period $ 154 $ 219
The accompanying notes are an integral part of these interim financial statements. These interim financial statements only
present the Carnival plc consolidated IFRS Interim Financial Statements and, accordingly, do not include the consolidated
IFRS results of Carnival Corporation.
Within the DLC arrangement the most appropriate presentation of Carnival plc's results and financial position is considered
to be by reference to the DLC Financial Statements, which are included within the attached Schedule A (see Note 1).
CARNIVAL PLC
INTERIM CONDENSED GROUP STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
(in millions)
Share Share Retained Other reserves Total
capital premium earnings shareholders'
equity
Translation Cash flow Merger Total
reserve hedges reserve
2015
Balances atNovember 30, 2014 $ 358 $ 137 $ 7,835 $ (1,046 ) $ (33) $ 1,503 $ 424 $ 8,754
Comprehensive incomeNet income - - 68 - - - - 68
Changes in foreign currency translation adjustment - - - (806 ) - - (806 ) (806 )
Net gains on hedges of net investments in foreign operations - - - 47 - - 47 47
Net losses on cash flow derivative hedges - - - - (31 ) - (31 ) (31 )
Actuarial gains on post-employment benefit obligations - - (9 ) - - - - (9 )
Total comprehensive income (loss) - - 59 (759 ) (31 ) - (790 ) (731 )
Cash dividends declared - - (108 ) - - - - (108 )
Other, net - 5 5 - - - - 10
Balances at May 31, 2015 $ 358 $ 142 $ 7,791 $ (1,805 ) $ (64 ) $ 1,503 $ (366 ) $ 7,925
2014
Balances atNovember 30, 2013 $ 358 $ 136 $ 7,291 $ (359 ) $ 4 $ 1,503 $ 1,148 $ 8,933
Comprehensive incomeNet income - - 80 - - - - 80
Changes in foreigncurrency translationadjustment - - - 87 - - 87 87
Net losses on cash flowderivative hedges - - - - (19 ) - (19 ) (19 )
Actuarial gains onpost-employment benefitobligations - - 4 - - - - 4
Total comprehensiveincome (loss) - - 84 87 (19 ) - 68 152152
Cash dividends declared - - (108 ) - - - - (108 )
Other, net - (1 ) 6 - - - - 5
Balances at May 31, 2014 $ 358 $ 135 $ 7,273 $ (272 ) $ (15 ) $ 1,503 $ 1,216 $ 8,982
The accompanying notes are an integral part of these interim financial statements. These interim financial statements only
present the Carnival plc consolidated IFRS Interim Financial Statements and, accordingly, do not include the consolidated
IFRS results of Carnival Corporation.
Within the DLC arrangement the most appropriate presentation of Carnival plc's results and financial position is considered
to be by reference to the DLC Financial Statements, which are included within the attached Schedule A (see Note 1).
CARNIVAL PLC
NOTES TO INTERIM FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - Basis of Preparation
The interim condensed consolidated financial statements have been prepared on the basis of the accounting policies and
methods of computation, including estimates and assumptions, adopted and disclosed in Carnival plc and its subsidiaries and
associates (referred to collectively in these interim financial statements as the "Group," "our," "us" and "we")
consolidated statutory financial statements for the year ended November 30, 2014. Carnival plc was incorporated in England
and Wales in 2000 and its headquarters is located at Carnival House, 100 Harbour Parade, Southampton, SO15 1ST, UK
(registration number 4039524). These interim condensed consolidated financial statements were approved by the Board of
Directors on June 30, 2015.
These interim financial statements have been prepared in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority ("FCA") and with International Accounting Standard 34 "Interim Financial
Reporting" as adopted by the European Union ("IAS 34"). The interim condensed consolidated financial statements should be
read in conjunction with the annual financial statements for the year ended November 30, 2014, which were prepared in
accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS"). Our interim
financial statements are presented in U.S. dollars unless otherwise noted, as this is our presentation currency.
Carnival Corporation and Carnival plc operate a dual listed company ("DLC"), known as Carnival Corporation & plc, whereby
the businesses of Carnival Corporation and Carnival plc are combined through a number of contracts and through provisions
in Carnival Corporation's Articles of Incorporation and By-Laws and Carnival plc's Articles of Association. The two
companies operate as if they are a single economic enterprise, but each has retained its separate legal identity. Each
company's shares are publicly traded; on the New York Stock Exchange ("NYSE") for Carnival Corporation and the London Stock
Exchange for Carnival plc. In addition, Carnival plc American Depository Shares are traded on the NYSE. The contracts
governing the DLC arrangement provide that Carnival Corporation and Carnival plc each continue to have separate boards of
directors, but the boards of directors and senior executive management of both companies are identical. Further details
relating to the DLC arrangement are included in Note 3 of the 2014 DLC Financial Statements, which do not form part of
these Carnival plc interim financial statements.
Our IFRS interim financial statements are required to satisfy reporting requirements of the UKLA and do not include the
IFRS consolidated results and financial position of Carnival Corporation and its subsidiaries. Accordingly, the Directors
consider that, within the DLC arrangement, the most appropriate presentation of Carnival plc's results and financial
position is by reference to the U.S. generally accepted accounting principles ("U.S. GAAP") DLC Financial Statements, on
the basis that all significant financial and operating decisions affecting the DLC companies are made on the basis of U.S.
GAAP information and consequences. Accordingly, Schedule A to this announcement, which consists of the DLC Financial
Statements for the three and six months ended May 31, 2015, are provided to shareholders as other information, but do not
form part of these Carnival plc interim financial statements. In addition, the related management commentary, which has
been included in Schedule B to this announcement as other information, contains a review of the business and sets out the
principal activities, risks and uncertainties, impact of seasonality on its business, operations, performance, key
performance indicators, liquidity, financial condition and capital resources, debt covenants, and likely future
developments of Carnival Corporation & plc.
The interim condensed financial statements have been prepared on a going concern basis. The Directors of the Group have a
reasonable expectation that, on the basis of current financial projections and borrowing facilities available and based on
reassessment of principal risks, we are well positioned to meet our commitments and obligations for the next 12 months from
the date of this report and will remain in operational existence.
The preparation of our interim financial statements in conformity with IFRS requires management to make estimates and
assumptions that affect the application of policies and reported and disclosed amounts in the interim financial statements.
The estimates and underlying assumptions are based on historical experience and various other factors that we believe to be
reasonable under the circumstances, and form the basis of making judgments about carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from these estimates used in preparing the
interim financial statements.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision affects only that period or in the period of the revision
and future periods if the revision affects both current and future periods.
NOTE 2 - Changes in Accounting Policy and Disclosures
New and Amended Standards That Have Been Adopted By Us
· IFRS 10, "Consolidated Financial Statements," effective for annual periods beginning on or after January 1, 2014;
· IFRS 11, "Joint Arrangements," effective for annual periods beginning on or after January 1, 2014;
· IFRS 12, "Disclosure of Interest in Other Entities," effective for annual periods beginning on or after January 1,
2014;
· Amendments to IFRS 10, 11, 12 - Transition Guidance effective for annual periods beginning on or after January 1,
2014 and
· IAS 39, "Financial Instruments: Recognition and Measurement on Novation of Derivatives and Hedge Accounting,"
effective for annual periods beginning on or after January 1, 2014.
The adoption of these new standards and amendments did not have any impact on the Group results and financial position. The
impact of adopting Amendments to IAS 19, "Employee Benefits," in fiscal 2014 was a $4 million increase to the May 31, 2014
previously reported Group net income.
NOTE 3 - Status of Financial Statements
Our interim condensed consolidated IFRS financial statements for the six months ended May 31, 2015 have not been audited or
reviewed by the auditors.
Our interim condensed consolidated IFRS financial statements do not comprise statutory accounts within the meaning of
section 434 of the Companies Act 2006. Statutory accounts for the year ended November 30, 2014 were approved by the Board
of Directors on February 20, 2015 and delivered to the Registrar of Companies. The report of the auditors on those accounts
was (i) unqualified, (ii) did not contain an emphasis of matter paragraph, and (iii) did not contain any statement under
section 498 of the Companies Act 2006.
NOTE 4 - Property and Equipment
During the six months ended May 31, 2015, we took delivery of the 3,647-passenger capacity P&O Cruises (UK)'s Britannia and
made stage payments for other ships under construction.
In December 2014, we entered into a bareboat charter/sale agreement under which the 1,492-passenger capacity Costa
Celebration (formerly Grand Celebration) was chartered to an unrelated entity in December 2014 through August 2021, as
amended. Under this agreement, ownership of Costa Celebration will be transferred to the buyer at the end of the lease
term. This transaction did not meet the criteria to qualify as a finance lease and, accordingly, it will be accounted for
as an operating lease whereby we will recognise the charter revenue over the term of the agreement.
Our property and equipment decreased $1.2 billion as a result of the change in currency exchange rates of the U.S. dollar
to the euro, sterling and Australian dollar at May 31, 2015 compared to November 30, 2014.
NOTE 5 - Intangibles
At May 31, 2015, all of our cruise brands carried goodwill, except for P&O Cruises (UK) and P&O Cruises (Australia), and
the carrying value of our cash generating units' or cruise brands' goodwill balance was $607 million ($669 million at
November 30, 2014). As of July 31, 2015, we will be performing our annual goodwill impairment reviews to assess the
recoverable amount of each cruise brands' goodwill.
The determination of our cruise brands' goodwill recoverable amounts includes numerous assumptions that are subject to
various risks and uncertainties. We believe that we have made reasonable estimates and judgments in determining whether our
goodwill has been impaired. However, if there is a change in assumptions used or if there is a change in the conditions or
circumstances influencing fair values in the future, then we may need to recognize an impairment charge.
Our brands' estimated recoverable amount significantly exceeded their carrying amount and there have not been any events or
circumstances subsequent to July 31, 2014, which we believe require us to perform interim goodwill impairment tests.
NOTE 6 - Unsecured Debt
At May 31, 2015, our short-term borrowings consisted of euro-denominated bank loans of $44 million with an aggregate
weighted-average floating interest rate of 1.4%.
In February 2015, we borrowed $472 million under a euro-denominated export credit facility, the proceeds of which were used
to pay for a portion of P&O Cruises (UK)'s Britannia purchase price. The floating rate facility is due in semi-annual
installments through February 2027.
In April 2015, Carnival Corporation, Carnival plc and certain Carnival plc subsidiaries exercised their option to extend
the termination date of their five-year multi-currency revolving credit facility from June 2019 to June 2020, which was
approved by each bank.
NOTE 7 - Ship Commitments
Ship capital commitments include contract prices with the shipyard, design and engineering fees, capitalised interest,
construction oversight costs and various owner supplied items.
At May 31, 2015, we had two ships under contract for construction for AIDA Cruises ("AIDA"). Our future cruise ship
commitments for these two ships, aggregated based on each ship's delivery date, are expected to be $0.4 billion in 2015 and
$0.5 billion in 2016.
Strategic Memorandums of Agreement
On March 26, 2015, Carnival Corporation & plc signed two long-term strategic Memorandums of Agreement ("MOAs") with Italian
shipbuilder, Fincantieri S.p.A., and German shipbuilder, Meyer Werft, that will add a total of nine new cruise ships to the
Carnival Corporation & plc fleet over a four-year period from 2019 through 2022. These MOAs are consistent with Carnival
Corporation & plc's long-term strategy of measured capacity growth over time and are subject to several conditions,
including obtaining satisfactory financing.
Pursuant to one of Carnival Corporation & plc's MOAs discussed above, on June 15, 2015, Carnival Corporation & plc signed a
multi-billion dollar contract with Meyer Werft to build four next-generation cruise ships to be delivered between 2019 and
2020, each with more than 5,000 lower berths and at a cost per lower berth in line with Carnival Corporation & plc's
existing order book of newbuilds.
NOTE 8 - Contingencies Litigation
As a result of the January 2012 ship incident, litigation claims and investigations, including, but not limited to, those
arising from personal injury loss of or damage to personal property, business interruption losses or environmental damage
to any affected coastal waters and the surrounding areas, have been and may be asserted or brought against various parties,
including us. The ultimate outcome of these matters cannot be determined at this time. However, we do not expect these
matters to have a significant impact on our results of operations because we have insurance coverage for these types of
third-party claims. At May 31, 2015, the Group's insurance recoverables of $216 million and claims reserve of $267 million
substantially all relate to this 2012 ship incident.
Additionally, 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 are covered by insurance and, accordingly, the maximum amount of our liability, net of
any insurance recoverables, is typically limited to our self-insurance retention levels. Management believes the ultimate
outcome of these claims and lawsuits will not have a material adverse impact on the Group financial statements.
NOTE 9 - Dividends
The board of directors declared regular quarterly dividends for the first and second quarters at $0.25 per share in 2015
and 2014. During each of the six months ended May 31, 2015 and 2014, our quarterly dividend declarations amounted to $108
million.
NOTE 10 - Segment Information
IFRS 8 "Operating Segments" requires that an entity's operating segments are reported on the same basis as the internally
reported information that is provided to the chief operating decision maker ("CODM"), who for us is the President and Chief
Executive Officer of Carnival Corporation and Carnival plc.
As previously discussed, within the DLC arrangement the most appropriate presentation of Carnival plc's results and
financial position is by reference to the DLC Financial Statements, which are included in Section A, but do not form part
of these Carnival plc interim financial statements. Accordingly, decisions to allocate resources and assess performance for
Carnival plc are made by the CODM upon review of the U.S. GAAP segment results across all of Carnival Corporation & plc's
cruise brands and other segments. Carnival Corporation & plc has three reportable cruise segments that are comprised of its
(1) North America cruise brands, (2) Europe, Australia & Asia ("EAA") cruise brands and (3) Cruise Support. In addition,
Carnival Corporation & plc has a Tour and Other segment.
The Carnival Corporation & plc North America cruise segment includes Carnival Cruise Line, Holland America Line, Princess
Cruises ("Princess") and Seabourn. The Carnival Corporation & plc EAA cruise segment includes AIDA, Costa Cruises, Cunard,
P&O Cruises (Australia) and P&O Cruises (UK) and prior to November 2014, the former Ibero Cruises. These individual cruise
brand operating segments have been aggregated into two reportable segments based on the similarity of their economic and
other characteristics, including types of customers, regulatory environment, maintenance requirements, supporting systems
and processes and products and services they provide. The Carnival Corporation & plc Cruise Support segment represents
certain of its port and related facilities and other services that are provided for the benefit of the cruise brands.
The Carnival Corporation & plc Tour and Other segment represents the hotel and transportation operations of Holland America
Princess Alaska Tours. In 2014, our Tour and Other segment also included one ship that we chartered to an unaffiliated
entity. In November 2014, we entered into a bareboat charter/sale agreement under which Grand Holiday was chartered to an
unrelated entity in January 2015 through March 2025. Additionally, in December 2014 we entered into a bareboat charter/sale
agreement under which Costa Celebration was chartered to an unrelated entity in December 2014 through August 2021, as
amended. Under these agreements, ownership of Grand Holiday and Costa Celebration will be transferred to the buyer at the
end of their lease term. Neither of these transactions met the criteria to qualify as a finance-type lease and,
accordingly, they are being accounted for as operating leases whereby we recognize the charter revenue over the term of the
agreements. Subsequent to entering into these agreements, our Tour and Other segment includes these three ships.
Selected information for the Carnival Corporation & plc segments and the reconciliation to the corresponding Carnival plc
amounts for the six months ended May 31, 2015 and 2014 was as follows (in millions):
Revenues Operating Selling and Depreciation Operating
expenses administrative and income
amortisation (loss)
2015
North America Cruise Brands (a) $ 4,459 $ 2,911 $ 558 $ 497 $ 493
EAA Cruise Brands (b) 2,582 1,792 349 276 165
Cruise Support 52 6 108 12 (74 )
Tour and Other (a) 44 47 5 22 (30 )
Intersegment elimination (a) (17 ) (17 ) - - -
Carnival Corporation & plc - U.S. GAAP 7,120 4,739 1,020 807 554
Carnival Corporation, U.S. GAAP vs. IFRS differences and eliminations (c) (4,006 ) (2,416 ) (637 ) (501 ) (452)
Carnival plc - IFRS $ 3,114 $ 2,323 $ 383 $ 306 $ 102
2014
North America Cruise Brands (a) $ 4,286 $ 3,119 $ 577 $ 475 $ 115
EAA Cruise Brands (b) 2,870 2,012 365 309 184 (d)
Cruise Support 37 - 79 14 (56)
Tour and Other (a) 38 46 4 17 (29)
Intersegment elimination (a) (13 ) (13 ) - - -
Carnival Corporation & plc - U.S. GAAP 7,218 5,164 1,025 815 214
Carnival Corporation, U.S. GAAP vs. IFRS differences and eliminations (c) (3,961 ) (2,749 ) (616 ) (480 ) (101) (d)
Carnival plc - IFRS $ 3,257 $ 2,415 $ 409 $ 335 $ 113 (d)
(a) A portion of the North America cruise brands' segment revenues includes revenues for the tour portion of a cruise when a land tour package is sold along with a cruise by Holland America Line and Princess. These intersegment tour revenues, which are included in the Tour and Other segment, are eliminated directly against the North America cruise brands' segment revenues and operating expenses in the line "Intersegment elimination."
(b) Carnival plc consists principally of the EAA cruise brands.
(c) Carnival Corporation consists primarily of cruise brands that do not form part of the Group; however, these brands are included in Carnival Corporation & plc and thus represent substantially all of the reconciling items. These North American Carnival Corporation cruise brands are Carnival Cruise Line, Princess, Holland America Line and Seabourn. The U.S. GAAP vs. IFRS accounting differences principally relate to differences in the carrying value of ships and related depreciation expenses.
(d) Includes a $37 million gain on the sale of Costa Voyager, partially offset by an impairment charge of $22 million related to Grand Celebration.
During the six months ended May 31, 2015, the Group recognised $7 million of restructuring expenses related to certain AIDA
and Costa operations.
NOTE 11 - Related Party Transactions
There have been no changes in the six months ended May 31, 2015 to the related party transactions described in the Group
IFRS financial statements for the year ended November 30, 2014 that have a material effect on the financial position or
results of operations of the Group.
During the six months ended May 31, 2015, Holland America Line and Princess purchased land tours from us totaling $17
million ($13 million in 2014) and packaged these land tours for sale with their cruises. In addition, during each of the
six months ended May 31, 2015 and 2014 we sold $0.4 million of pre- and post-cruise vacations, shore excursions and
transportation services to the Carnival Corporation group.
At May 31, 2015, we owed $1.6 billion ($1.5 billion at November 30, 2014) to the Carnival Corporation group, which was
unsecured, repayable on demand and non-interest bearing.
Within the DLC arrangement, there are instances where we provide services to Carnival Corporation group companies, and also
where Carnival Corporation group companies provide services to us. For example, we participate in Carnival Corporation &
plc's group risk-sharing programs related to hull and machinery for ships and crew and guest claims. Additional disclosures
of related party transactions are discussed in Note 3 of the 2014 DLC Financial Statements, which do not form part of these
Carnival plc interim financial statements.
At May 31, 2015 and November 30, 2014, Carnival Corporation owned 1,115,450, or 0.5%, of Carnival plc's ordinary shares,
which are non-voting. At May 31, 2015 and November 30, 2014, Carnival Investments Limited, a wholly-owned subsidiary of
Carnival Corporation, owned 30,848,634, or 14.3%, of Carnival plc's ordinary shares, which are also non-voting. In the six
months ended May 31, 2015, Carnival Corporation and Carnival Investment Limited received dividends on their Carnival plc
ordinary shares in the aggregate amount of $16 million.
During the six months ended May 31, 2015, Carnival plc had multi-year ship charter agreements with Princess for five (2014
four ships), and Carnival Cruise Line for one ship operating year-round in Australia and/or Asia. In addition, during the
six months ended May 31, 2014, Princess time chartered another ship seasonally in Australia or Asia to Carnival plc and
since September 2014, Carnival Cruise Line began time chartering another ship to us that operated seasonally from
Australia. Both the year-round and seasonal charters are accounted for as operating leases. Princess and Carnival Cruise
Line are subsidiaries of Carnival Corporation. The total charter payments for the six months ended May 31, 2015 was $294
million ($178 million in 2014), which were included in other ship operating expenses.
During the six months ended May 31, 2015 and May 31, 2014, no Carnival plc ordinary shares or Carnival Corporation common
stock were sold or repurchased under the Stock Swap programs.
During the six months ended May 31, 2015, Carnival plc continued to provide a guarantee to the Merchant Navy Officers
Pension Fund for certain employees who have transferred from Carnival plc to a subsidiary of Carnival Corporation.
Key Management Personnel
During the six months ended May 31, 2015, there were no material transactions or balances between the Group and its key
management personnel or members of their close family, other than in respect of remuneration, which is not material to the
Group.
NOTE 12 - Principal Risks and Uncertainties
The principal risks and uncertainties affecting our business activities are included in Item 4. Principal Risks and
Uncertainties of our 2014 Strategic Report and for the remaining six months of fiscal 2015 remain the same.
NOTE 13 - Seasonality
Our revenues from the sale of passenger tickets are seasonal. Historically, demand for cruises has been greatest during our
third quarter, which includes the Northern Hemisphere summer months. This higher demand during the third quarter results in
higher ticket prices and occupancy levels and, accordingly, the largest share of our operating income is earned during this
period. The seasonality of our results also increases due to ships being taken out-of-service for maintenance, which we
schedule during non-peak demand periods. In addition, substantially all of Holland America Princess Alaska Tours' revenue
and net income is generated from May through September in conjunction with the Alaska cruise season.
NOTE 14 - Financial Risk Management and Financial Instruments
The Group's activities expose it to a variety of financial risks such as foreign currency risk, fair value and cash flow
interest rate risks, credit risk and liquidity risk.
The condensed interim financial statements do not include all financial risk management information and disclosures
required in the annual financial statements; as such they should be read in conjunction with the Group's annual financial
statements at November 30, 2014 and the DLC Financial Statements for the three and six months ended May 31, 2015. There
have been no significant changes in the risk management department or the risk management policies since November 30,
2014.
Liquidity Risk
Within the DLC arrangement, liquidity and liquidity risk is assessed on a consolidated Carnival Corporation & plc basis and
there are cross guarantees between the two parent companies that result in there being little substantive difference in the
availability of debt financing for either Carnival Corporation or Carnival plc. Typically, the Carnival Corporation & plc
debt financing agreements allow for either Carnival Corporation or Carnival plc to draw under the facilities, with the
non-borrowing parent as guarantor. For additional information see the "Liquidity, Financial Condition and Capital
Resources" section within Schedule B.
As noted in the "Future Commitments and Funding Sources" section within Schedule B, at May 31, 2015 the consolidated
Carnival Corporation & plc group had $2.5 billion available for borrowing under its revolving credit facilities, net of its
commercial paper borrowings, and $2.4 billion under committed future financings, which are comprised of ship export credit
facilities, in addition to $60 million of cash and cash equivalents, which excludes $238 million of cash on hand used for
current operations.
Fair Value Measurements
IFRS establishes a fair value hierarchy that prioritises the inputs used to measure fair value. The hierarchy gives the
highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement)
and the lowest priority to unobservable inputs (Level 3 measurement). This hierarchy requires entities to maximise the use
of observable inputs and minimise the use of unobservable inputs. The three levels of inputs used to measure fair value are
as follows:
• Level 1 measurements are based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.
• 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.
The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between independent and knowledgeable market participants at the measurement date. Therefore, even when market
assumptions are not readily available, our own assumptions are set to reflect those that we believe market participants
would use in pricing the asset or liability at the measurement date.
The fair value measurement of a financial asset or financial liability must reflect the nonperformance risk of the
counterparty and us. Therefore, the impact of our counterparty's creditworthiness was considered when in an asset position,
and our creditworthiness was considered when in a liability position in the fair value measurement of our financial
instruments. Creditworthiness did not have a significant impact on the fair values of our financial instruments at May 31,
2015 and November 30, 2014. Both the counterparties and we are expected to continue to perform under the contractual terms
of the instruments. 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 realised in a current or future market exchange.
Financial Instruments that are Not Measured at Fair Value on a Recurring Basis
Financial assets were as follows (in millions):
May 31, 2015 November 30, 2014
Fair Value Fair Value
Carrying Level 1 Level 2 Level 3 Carrying Level 1 Level 2 Level 3
Value Value
Cash and cash equivalents(a) $ 115 $ 115 $ - $ - $ 129 $ 129 $ - $ -
Long-term other assets (b) 4 - - 4 14 - - 13
$ 119 $ 115 $ - $ 4 $ 143 $ 129 $ - $ 13
(a) Cash and cash equivalents are comprised of cash on hand. Due to their short term maturities the carrying values approximate their fair values.
(b) At May 31, 2015 and November 30, 2014, long term other assets were substantially all comprised of notes receivables. The fair values of our notes receivable were estimated using risk-adjusted discount rates.
The carrying and estimated fair values of debt were as follows (in millions) (a):
May 31, 2015 November 30, 2014
Fair Value Fair Value
Carrying Level 1 Level 2 Level 3 Carrying Level 1 Level 2 Level 3
Value Value
Floating rate
Euro
- More to follow, for following part double click ID:nRSA7691ReRecent news on Carnival
See all newsREG-Carnival PLC: CARNIVAL PLC - VOTING RIGHTS AND CAPITAL
AnnouncementREG-Carnival PLC: Carnival Corporation & plc Announces Closing of $1.0 Billion 5.875% Senior Unsecured Notes Offering for Refinancing and Interest Expense Reduction
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AnnouncementREG-Carnival PLC: BLOCK LISTING RETURN
Announcement