Carnival Cruises 2010 Annual Report Download - page 33

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, 2010 and 2009, we assumed
weighted-average discount rates of 5.0% and 5.4%, respectively. The net asset or net liability positions under
these single-employer defined benefit pension plans are not material.
In addition, P&O Cruises (UK), 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, 2010, the New Section
was estimated to have a funding deficit.
The MNOPF trustee had previously determined that the MNOPF’s New Section funding was inadequate based
on its actuarially determined deficit. Substantially all of any MNOPF New Section deficit liability that we may
have relates to the obligations of P&O Cruises (UK) and Princess, which existed prior to the formation of our
DLC in 2003. We have not been able to record our estimated share of the ultimate fund deficit as of the DLC
formation date or thereafter because our ultimate amount of the deficit was and remains uncertain. The amount of
our share of the fund’s ultimate deficit could vary considerably if different assumptions and estimates are used to
estimate the fund deficit. Therefore, we expense our portion of any deficit as amounts are invoiced by, and
become due and payable to, the fund’s trustee. In 2010, we received a special assessment invoice from the fund’s
trustee for an amount the trustee calculated to be our additional share of the entire MNOPF New Section deficit.
The calculation was based on the March 31, 2009 actuarial valuations, as adjusted for subsequent market value
recoveries. Accordingly, we recorded the full invoiced liability of $41 million in cruise payroll and related
expense in 2010. It is still possible that the fund’s trustee may invoice us in the future for additional amounts.
As of the DLC formation date in April 2003 and through November 30, 2007, the MNOPF’s Old Section had a
funding surplus and, accordingly, no expenses had been recorded for this section of the plan in our financial
statements. We believe that while the Old Section had a funding deficit at November 30, 2008, this deficit has
reverted to a surplus at November 30, 2010 and 2009. If the Old Section has a funding deficit in the future, then it
could result in the fund’s trustee also invoicing us for amounts, if they believe the fund requires further
contributions. We will record any required Old Section contributions in the same manner as the New Section.
Our share of the Old Section deficit, if any, which covers predecessor employers’ officers employed prior to
1978, is not currently known and, accordingly, our share of any such contribution is not currently determinable.
Total expense for all defined benefit pension plans, including multiemployer plans, was $85 million, $36 million
and $42 million in fiscal 2010, 2009 and 2008, respectively.
Defined Contribution Plans
We have several defined contribution plans available to most of our employees. We contribute to these plans
based on employee contributions, salary levels and length of service. Total expense for these plans was $20
million, $16 million and $22 million in fiscal 2010, 2009 and 2008, respectively.
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