Carnival Cruises 2010 Annual Report Download - page 23

respectively. In these offerings, we sold Carnival Corporation common stock in the U.S., only to the extent we
were able to purchase shares of Carnival plc in the UK on at least an equivalent basis under the “Stock Swap”
program.
In fiscal 2010 and 2009, we also sold 14.8 million shares and 5.8 million shares of Carnival plc ordinary shares
held as treasury stock for $545 million and $187 million of net proceeds, respectively. In fiscal 2010 and 2009,
substantially all of these net proceeds were used to fund the repurchase of 14.8 million shares and 5.8 million
shares of Carnival Corporation common stock, respectively. In these UK offerings, we sold Carnival plc ordinary
shares held in treasury, only to the extent we were able to purchase shares of Carnival Corporation in the U.S. on
at least an equivalent basis under the “Stock Swap” program.
At November 30, 2010, there were 38.9 million shares of Carnival Corporation common stock reserved for
issuance substantially all pursuant to its employee benefit and dividend reinvestment plans. In addition, Carnival
plc shareholders have authorized 18.6 million ordinary shares for future issuance under its employee benefit
plans.
At November 30, 2010 and 2009, accumulated other comprehensive (loss) income was as follows (in millions):
November 30,
2010 2009
Cumulative foreign currency translation adjustments, net ................................ $ (99) $565
Unrecognized pension expenses .................................................... (91) (99)
Unrealized loss on marketable security ............................................... (16) (16)
Net (losses) gains on cash flow derivative hedges ...................................... (48) 12
$(254) $462
NOTE 10 – Fair Value Measurements, Derivative Instruments and Hedging Activities
Fair Value Measurements
U.S. accounting standards establish a fair value hierarchy that prioritizes the inputs used to measure fair value.
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or
liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). This
hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs.
The three levels of inputs used to measure fair value are as follows:
• Level 1 measurements are based on quoted prices in active markets for identical assets or liabilities that we
have the ability to access.
• Level 2 measurements are based on quoted prices for similar assets or liabilities in active markets, quoted
prices for identical or similar assets or liabilities in markets that are not active or market data other than
quoted prices that are observable for the assets or liabilities.
• Level 3 measurements are based on unobservable data that are supported by little or no market activity and
are significant to the fair value of the assets or liabilities.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Therefore, even when market assumptions are not readily
available, our own assumptions are set to reflect those that we believe market participants would use in pricing
the asset or liability at the measurement date.
The fair value measurement of a financial asset or financial liability must reflect the nonperformance risk of the
counterparty and us. Therefore, the impact of our counterparty’s creditworthiness was considered when in an
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