Carnival Cruises 2009 Annual Report Download - page 32

either have three or five-year cliff vesting or vest evenly over five years after the grant date. In addition, Carnival
Corporation and Carnival plc grant RSUs that vest evenly over five years or at the end of three or five years after
the grant date and accrue dividend equivalents on each outstanding RSU, in the form of additional RSUs, based
on dividends declared. The share-based compensation expense associated with RSAs and RSUs is based on the
quoted market price of the Carnival Corporation or Carnival plc shares on the date of grant, and is amortized to
expense using the straight-line method from the grant date through the earlier of the vesting date or the estimated
retirement eligibility date.
During the year ended November 30, 2009, RSA and RSU activity was as follows:
Restricted Stock Awards Restricted Stock Units
Shares
Weighted-
Average
Grant Date
Fair Value Shares
Weighted-
Average
Grant Date
Fair Value
Outstanding at November 30, 2008 955,195 $ 47.63 1,433,790 $ 45.68
Granted ............................................. 453,705 $ 24.33 1,282,882 $ 23.97
Vested .............................................. (179,873) $ 45.30 (182,454) $ 51.37
Forfeited ............................................ (127,565) $ 39.19
Outstanding at November 30, 2009 ....................... 1,229,027 $ 39.37 2,406,653 $ 34.02
The total grant date fair value of RSAs and RSUs vested was $18 million, $11 million and $9 million in
fiscal 2009, 2008 and 2007, respectively. As of November 30, 2009, there was $35 million of total unrecognized
compensation cost related to RSAs and RSUs. This cost is expected to be recognized over a weighted-average
period of 1.7 years.
Defined Benefit Pension Plans
We have several single-employer defined benefit pension plans, which cover some of our shipboard and
shoreside employees. The U.S. and UK shoreside employee plans are closed to new membership and are funded
at or above the level required by U.S. or UK regulations. The remaining defined benefit plans are primarily
unfunded. In determining all of our plans’ benefit obligations at November 30, 2009 and 2008, we assumed
weighted-average discount rates of 5.4% and 7.1%, respectively. The net assets or liabilities related to the
obligations under these single-employer defined benefit pension plans are not material.
In addition, P&O Cruises, Princess and Cunard participate in an industry-wide British Merchant Navy
Officers Pension Fund (“MNOPF” or the “fund”), a defined benefit multiemployer pension plan available to
certain of their British shipboard officers. The MNOPF is divided into two sections, the “New Section” and the
“Old Section,” each of which covers a different group of participants, with the Old Section closed to further
benefit accrual and the New Section only closed to new membership. At November 30, 2009, the New Section
was estimated to have a funding deficit.
Substantially all of any MNOPF New Section deficit liability which we may have relates to the obligations
of P&O Cruises and Princess, which existed prior to the combination in 2003 of Carnival Corporation’s and
Carnival plc’s businesses into a DLC. However, since the MNOPF New Section is a multiemployer plan and it
was not probable that we would withdraw from the plan nor was our share of the liability certain, we could not
record our estimated share of the ultimate deficit as a Carnival plc acquisition liability that existed at the DLC
transaction date. The amount of our share of the fund’s ultimate deficit could vary considerably if different
pension assumptions and/or estimates were used. Therefore, we expense our portion of any deficit as amounts are
invoiced by, and become due and payable to, the fund’s trustee. In 2007, we received a special assessment
invoice from the fund’s trustee for what the trustee calculated to be our additional share of the entire MNOPF
New Section liability, based on their most recent actuarial valuation. Accordingly, we recorded the full invoiced
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