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Cruise company Carnival Corporation & plc released its 2014 annual report last week, which included an overview of the company's fuel derivatives programme.

The annual report states that all of the derivatives used by Carnival are based on Brent prices, even though the company's expenses are for marine fuel. The report explains that "changes in the Brent prices may not show a high degree of correlation with changes in our underlying marine fuel prices".

Carnival uses zero cost collars on Brent, which it says "will act as economic hedges", though "hedge accounting is not applied". The report states that Carnival "will continue to evaluate various derivative products and strategies".

In 2014, Carnival posted a realised loss of $3 million on fuel derivatives, compared with a realised loss of $13 million in 2012 and no gains or losses in 2013.

Carnival's outstanding fuel derivatives on November 30, 2014, consisted of zero cost collars on Brent, which mature evenly over each month. The derivatives are detailed in the table below.

Maturities	Transaction Dates	Barrels (thousands)	Weighted Average Floor Prices ($)	Weighted Average Ceiling Prices ($)	% of Estimated Fuel Consumption
Fiscal 2015	Nov-11	2160	80	114
	Feb-12	2160	80	125
	Jun-12	1236	74	110
	Apr-13	1044	80	111
	May-13	1884	80	110
	Oct-14	1920	79	110
	Total	10404			51
Fiscal 2016	Jun-12	3564	75	108
	Feb-13	2160	80	120
	Apr-13	3000	75	115
	Total	8724			42
Fiscal 2017	Feb-13	3276	80	115
	Apr-13	2028	75	110
	Jan-14	1800	75	114
	Oct-14	1020	80	113
	Total	8124			39
Fiscal 2018	Jan-14	2700	75	110
	Oct-14	3000	80	114
	Total	5700			28