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General | 9 Months Ended
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Aug. 31, 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 and nine months ended August 31, 2019 and 2018, and the Consolidated Balance Sheet at August 31, 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 for 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 tables summarize the impacts of ASC 606 adoption on our consolidated financial statements:
| Three Months Ended August 31, 2019
(in millions) | Prior to adoption of ASC 606 |  | Adjustments |  | As Reported
Consolidated Statement of Income |  |  |  |  |
Onboard and other (Revenues) | $ | 1,407 |  |  | $ | 449 |  |  | $ | 1,855 |
Revenues (Total) | $ | 6,084 |  |  | $ | 449 |  |  | $ | 6,533 |
Onboard and other (Operating Costs and Expenses) | $ | 219 |  |  | $ | 449 |  |  | $ | 668 |
Operating Costs and Expenses (Total) | $ | 4,194 |  |  | $ | 449 |  |  | $ | 4,643 |
Operating Income | $ | 1,890 |  |  | $ | — |  |  | $ | 1,890 |
Net Income | $ | 1,780 |  |  | $ | — |  |  | $ | 1,780 |
| Nine Months Ended August 31, 2019
(in millions) | Prior to adoption of ASC 606 |  | Adjustments |  | As Reported
Consolidated Statement of Income |  |  |  |  |
Onboard and other (Revenues) | $ | 3,696 |  |  | $ | 1,115 |  |  | $ | 4,811 |
Revenues (Total) | $ | 14,929 |  |  | $ | 1,115 |  |  | $ | 16,043 |
Onboard and other (Operating Costs and Expenses) | $ | 506 |  |  | $ | 1,115 |  |  | $ | 1,620 |
Operating Costs and Expenses (Total) | $ | 12,137 |  |  | $ | 1,115 |  |  | $ | 13,252 |
Operating Income | $ | 2,791 |  |  | $ | — |  |  | $ | 2,791 |
Net Income | $ | 2,567 |  |  | $ | — |  |  | $ | 2,567 |
| At August 31, 2019
(in millions) | Prior to adoption of ASC 606 |  | Adjustments |  | As Reported
Consolidated Balance Sheet |  |  |  |  |
Prepaid expenses and other | $ | 488 |  |  | $ | 147 |  |  | $ | 635 |
Total current assets | $ | 2,565 |  |  | $ | 147 |  |  | $ | 2,712 |
Customer deposits | $ | 4,527 |  |  | $ | 147 |  |  | $ | 4,674 |
Total current liabilities | $ | 8,784 |  |  | $ | 147 |  |  | $ | 8,932 |
| Nine Months Ended August 31, 2019
(in millions) | Prior to adoption of ASC 606 |  | Adjustments |  | As Reported
Consolidated Statement of Cash Flows |  |  |  |  |
Prepaid expenses and other | $ | (73 | ) |  | $ | (147 | ) |  | $ | (220 | )
Customer deposits | $ | 262 |  |  | $ | 147 |  |  | $ | 409 |
Net cash provided by operating activities | $ | 4,414 |  |  | $ | — |  |  | $ | 4,414 |
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 reclassification of 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.

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