Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 7A. Quantitative and Qualitative Disclosures About Market Risk .
For a discussion of our hedging strategies and market risks, see the discussion below and the consolidated financial statements.
Fuel Price Risks
Substantially all our exposure to market risk for changes in fuel prices relates to the consumption of fuel on our ships.
Foreign Currency Exchange Rate Risks
Operational Currency Risks
Our operations primarily utilize the U.S. dollar, Euro, Sterling or the Australian dollar as their functional currencies. Our operations also have revenue and expenses denominated in non-functional currencies. Movements in foreign currency exchange rates will affect our consolidated financial statements.
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Investment Currency Risks
The foreign currency exchange rates were as follows:
November 30,
USD to 1: 2025 2024
AUD $ 0.65 $ 0.65
CAD $ 0.72 $ 0.71
EUR $ 1.16 $ 1.06
GBP $ 1.32 $ 1.27
If the November 30, 2024 currency exchange rates had been used to translate our November 30, 2025 non-U.S. dollar functional currency operations’ assets and liabilities (instead of the November 30, 2025 U.S. dollar exchange rates), our total assets would have been lower by $1.4 billion and our total liabilities would have been higher by $1.3 billion.
Newbuild Currency Risks
At November 30, 2025, our newbuild currency exchange rate risk primarily relates to euro-denominated newbuild contract payments, which represent a total commitment of $8.4 billion and relate to newbuilds scheduled to be delivered to non-euro functional currency brands. The functional currency cost of each of these ships will increase or decrease based on changes in the exchange rates until the payments are made under the shipbuilding contract. We may utilize foreign currency derivatives to mitigate some of this foreign currency exchange rate risk. Based on a 1% change in euro to U.S. dollar exchange rates as of November 30, 2025, the remaining cost of these ships would have a corresponding change of $84 million.
Interest Rate Risks
The composition of our debt was as follows:
November 30, 2025
Fixed rate 54 %
EUR fixed rate
31 %
Floating rate 5 %
EUR floating rate
10 %
Based on a 100 basis point change in the market interest rates, our annual interest expense on floating rate debt would change by approximately $42 million.
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