Carnival Cruises 2006 Annual Report Download - page 32

page฀28 | Carnival Corporation & plc
NOTES฀TO฀CONSOLIDATED฀FINANCIAL฀STATEMENTS฀(continued)
During฀the฀year฀ended฀November฀30,฀2006,฀RSA฀and฀RSU฀activity฀was฀as฀follows:
Restricted฀Stock฀Awards Restricted฀Stock฀Units
Weighted- Weighted-
Average Average
Grant฀Date Grant฀Date
Shares Fair฀Value Shares Fair฀Value
Outstanding฀at฀November฀30,฀2005 ฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀ 966,417 $36.28 159,117 $44.56
Granted฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀ 169,711 $49.69 275,272 $52.37
Vested฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀ (245,417) $31.32 (47,319) $30.07
Forfeited฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀ (8,222) $51.87
Outstanding฀at฀November฀30,฀2006 ฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀ 890,711 $40.20 378,848 $51.88
The฀total฀grant฀date฀fair฀value฀of฀RSAs฀and฀RSUs฀vested฀
during฀fiscal฀2006,฀2005฀and฀2004฀was฀$9฀million,฀$8฀million฀
and฀$10฀million,฀respectively.฀As฀of฀November฀30,฀2006,฀there฀
was฀$19฀million฀of฀total฀unrecognized฀compensation฀cost฀
related฀to฀RSAs฀and฀RSUs.฀This฀cost฀is฀expected฀to฀be฀recog-
nized฀over฀a฀weighted-average฀period฀of฀1.7฀years.
Defined฀Benefit฀Pension฀Plans
We฀have฀several฀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฀our฀plans’฀benefit฀
obligations฀at฀November฀30,฀2006,฀we฀assumed฀weighted-
average฀discount฀rates฀of฀5.5%฀and฀4.9%฀for฀our฀U.S.฀and฀
foreign฀plans,฀respectively.฀The฀net฀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”),฀which฀is฀a฀defined฀benefit฀multiemployer฀
pension฀plan฀that฀is฀available฀to฀certain฀of฀their฀British฀ship-
board฀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,฀2006,฀the฀New฀Section฀
was฀estimated฀to฀have฀a฀funding฀deficit฀and฀the฀Old฀Section฀
was฀estimated฀to฀have฀a฀funding฀surplus.
Substantially฀all฀of฀any฀MNOPF฀New฀Section฀deficit฀liability฀
which฀we฀may฀have฀relates฀to฀P&O฀Cruises฀and฀Princess฀
obligations,฀which฀existed฀prior฀to฀the฀DLC฀transaction.฀
However,฀since฀the฀MNOPF฀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฀acqui-
sition฀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฀August฀2005,฀we฀received฀an฀invoice฀
from฀the฀fund฀for฀what฀the฀trustee฀calculated฀to฀be฀our฀share฀
of฀the฀entire฀MNOPF฀liability฀based฀on฀their฀March฀31,฀2003฀
actuarial฀study.฀Accordingly,฀we฀recorded฀the฀full฀invoiced฀
liability฀of฀$23฀million฀in฀payroll฀and฀related฀expense฀in฀2005.฀
However,฀based฀on฀the฀MNOPF’s฀March฀31,฀2006฀preliminary฀
valuation฀of฀the฀deficit฀liability฀as฀at฀that฀date,฀we฀expect฀to฀
receive฀a฀second฀MNOPF฀invoice฀in฀mid-2007฀of฀between฀
approximately฀$15฀million฀and฀$35฀million,฀which฀represents฀our฀
estimate฀of฀our฀additional฀share฀of฀the฀entire฀MNOPF฀liability.฀
It฀is฀still฀possible฀that฀the฀fund’s฀trustee฀may฀invoice฀us฀for฀
additional฀amounts฀after฀this฀second฀invoice฀for฀various฀reasons,฀
including฀if฀they฀believe฀the฀fund฀requires฀further฀funding.
Total฀expense฀for฀all฀defined฀benefit฀pension฀plans,฀includ-
ing฀multiemployer฀plans,฀was฀$28฀million,฀$45฀million฀and฀฀
$18฀million฀in฀fiscal฀2006,฀2005฀and฀2004,฀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฀relating฀to฀these฀plans฀was฀$17฀million,฀$14฀mil-
lion฀and฀$13฀million฀in฀fiscal฀2006,฀2005฀and฀2004,฀respectively.