As of we also performed our annual goodwill impairment reviews of

As of we also performed our annual goodwill

This preview shows page 31 - 32 out of 76 pages.

As of July 31, 2013, we also performed our annual goodwill impairment reviews of Carnival Cruise Lines’ andCosta’s goodwill. We did not perform a qualitative assessment but instead proceeded directly to step one of thetwo-step goodwill impairment review and compared each of Carnival Cruise Lines’ and Costa’s estimated fairvalue to the carrying value of their allocated net assets. Both Carnival Cruise Lines’ and Costa’s estimated cruisebrand fair value was based on a discounted future cash flow analysis. The principal assumptions used in our cashflow analysis consisted of forecasted future operating results, including net revenue yields and net cruise costsincluding fuel prices, capacity changes, including the expected deployment of vessels into, or out of, CarnivalCruise Lines and Costa, capital expenditures, WACC of market participants, adjusted for the risk attributable tothe geographic regions in which Carnival Cruise Lines and Costa operate, and terminal values, which are allconsidered Level 3 inputs. The forecasted net revenue yields were assumed to recover over the next few yearscompared to current levels as we continue to rebuild both of these brands. Based on the discounted cash flowanalyses, we determined that each of Carnival Cruise Lines’ and Costa’s estimated fair value significantlyexceeded their carrying value and, therefore, we did not proceed to step two of the impairment reviews.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 asfollows (in millions):North AmericaCruise BrandsEAACruise BrandsTotalBalance at November 30, 2011. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$927$386$1,313Ibero trademarks impairment charge (a). . . . . . . . . . . . . . . . . . . . . . . . . . .-(20)(20)Foreign currency translation adjustment. . . . . . . . . . . . . . . . . . . . . . . . . . .-66Balance at November 30, 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9273721,299Ibero trademarks impairment charge (a). . . . . . . . . . . . . . . . . . . . . . . . . . .-(13)(13)Foreign currency translation adjustment. . . . . . . . . . . . . . . . . . . . . . . . . . .---Balance at November 30, 2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$927$359$1,286(a)At February 29, 2012, we also performed an interim impairment test of Ibero’s trademarks, which resultedin a $20 million impairment charge during the first quarter of 2012, based on the reduction of revenuesprimarily as a result of slower than anticipated Ibero capacity growth, which is considered a Level 3 input.In 2013, we recognized a $13 million impairment charge, which related to Ibero’s remaining trademarks’carrying value.At July 31, 2013, our cruise brands that have significant trademarks recorded include AIDA, P&O Cruises(Australia), P&O Cruises (UK) and Princess. As of that date, we performed our annual trademark impairmentreviews for these cruise brands, which included performing a qualitative assessment. Qualitative factors such asindustry and market conditions, macroeconomic conditions, changes to the WACC, changes to the royalty ratesand overall financial performance were considered in the qualitative assessment to determine how changes inthese factors would affect the estimated fair values for each of our cruise brands’ recorded trademarks. Based on
Image of page 31
Image of page 32

You've reached the end of your free preview.

Want to read all 76 pages?

  • Spring '14
  • GulnaraMoldasheva
  • The Land, consolidated financial statements, Carnival Cruise Lines, Holland America Line, Carnival Corporation & PLC, Carnival Corporation

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture