<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------------
FORM 10-Q
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
COMMISSION FILE NUMBER: 0-9264
AMERICAN CLASSIC VOYAGES CO.
(Exact name of registrant as specified in its charter)
DELAWARE 31-0303330
(State or other jurisdiction of (I.R.S. Employer identification No.)
incorporation or organization)
TWO NORTH RIVERSIDE PLAZA, CHICAGO, IL 60606
(Address of principal executive offices) (Zip Code)
(312) 258-1890
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X ] No [ ]
As of November 10, 2000, there were 21,015,365 shares of Common Stock
outstanding.
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AMERICAN CLASSIC VOYAGES CO.
INDEX
<TABLE>
<CAPTION>
ITEM DESCRIPTION PAGE
---------------- ----
<S> <C>
Part I. Financial Information:
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets at September 30, 2000 and
December 31, 1999.......................................................... 3
Condensed Consolidated Statements of Operations for the
Three Months and Nine Months Ended September 30, 2000
and 1999................................................................... 4
Condensed Consolidated Statements of Cash Flows for the
Nine Months Ended September 30, 2000 and 1999.............................. 5
Notes to Condensed Consolidated Financial Statements....................... 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................................. 11
Item 3. Quantitative and Qualitative Disclosures About Market Risk ................ 17
Part II. Other Information:
Item 1. Legal Proceedings.......................................................... 18
Item 6. Exhibits and Reports on Form 8-K........................................... 18
</TABLE>
2
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AMERICAN CLASSIC VOYAGES CO.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except shares and par value)
<TABLE>
<CAPTION>
(Unaudited) (Audited)
September 30, December 31,
2000 1999
------------ -----------
<S> <C> <C>
ASSETS
Cash and cash equivalents ........................................ $ 47,781 $ 42,399
Restricted cash .................................................. 43,880 289
Short-term investments ........................................... 3,877 --
Accounts receivable .............................................. 2,553 1,205
Inventory ........................................................ 3,829 2,529
Prepaid air tickets .............................................. 3,093 1,930
Prepaid expenses and other current assets ........................ 4,434 3,491
--------- ---------
Total current assets ........................................ 109,447 51,843
Property and equipment, net ...................................... 188,281 150,797
Vessels under construction ....................................... 194,918 74,601
Deferred income taxes, net ....................................... 15,727 12,446
Other assets ..................................................... 7,766 4,303
--------- ---------
Total assets ................................................ $ 516,139 $ 293,990
--------- ---------
LIABILITIES
Accounts payable ................................................. $ 14,416 $ 14,534
Notes payable .................................................... 75,000 --
Other accrued liabilities ........................................ 21,163 23,712
Current portion of long-term debt ................................ 4,100 4,100
Unearned passenger revenues ...................................... 52,264 41,381
--------- ---------
Total current liabilities ................................... 166,943 83,727
Long-term debt, less current portion ............................. 70,026 80,463
--------- ---------
Total liabilities ........................................... $ 236,969 $ 164,190
--------- ---------
Company-obligated mandatorily redeemable convertible preferred
securities of subsidiary trust holding solely 7% convertible
subordinated debentures of the Company ...................... $ 100,000 $ --
--------- ---------
COMMITMENTS AND CONTINGENCIES (NOTE 8)
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value (10,000,000 and 5,000,000 shares
authorized, respectively; none issued and outstanding) ........ $ -- $ --
Common stock, $.01 par value (100,000,000 and 40,000,000 shares
authorized, respectively; 21,006,665 and 18,653,206 shares issued,
respectively)
210 187
Additional paid-in capital ....................................... 204,307 151,094
Accumulated deficit .............................................. (23,649) (19,573)
Common stock in treasury, at cost (51,000 shares) ................ (757) (757)
Unearned restricted stock and stock units ........................ (941) (1,151)
--------- ---------
Total stockholders' equity .................................. 179,170 129,800
--------- ---------
Total liabilities and stockholders' equity .................. $ 516,139 $ 293,990
--------- ---------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
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AMERICAN CLASSIC VOYAGES CO.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
--------------------------- ---------------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues ............................................ $ 62,456 $ 57,460 $ 159,718 $ 153,226
Cost of operations (exclusive of depreciation expense
shown below) ..................................... 38,603 35,768 102,272 98,230
--------- --------- --------- ---------
Gross profit ........................................ 23,853 21,692 57,446 54,996
Selling, general and administrative expenses ........ 18,276 13,848 51,448 43,297
Depreciation expense ................................ 3,963 4,130 11,919 12,472
--------- --------- --------- ---------
Operating income (loss) ............................. 1,614 3,714 (5,921) (773)
Interest income ..................................... 1,787 1,071 4,951 2,282
Interest expense and other financing costs .......... 18 1,306 1,049 4,376
Other expense ....................................... 5 -- 12 --
--------- --------- --------- ---------
Income (loss) before income taxes and accrued
distributions on convertible preferred securities
of subsidiary trust ................................. 3,378 3,479 (2,031) (2,867)
Income tax (expense) benefit ........................ (1,248) (1,388) 751 1,150
Accrued distributions on convertible preferred
securities of subsidiary trust, net of income
tax benefit of $672 and $1,635, respectively ..... 1,150 -- 2,796 --
--------- --------- --------- ---------
Net income (loss) ................................... $ 980 $ 2,091 $ (4,076) $ (1,717)
--------- --------- --------- ---------
Per Share Information
Basic:
Weighted-average shares outstanding .............. 21,013 18,505 20,478 16,694
Income (loss) per share .......................... $ 0.05 $ 0.11 $ (0.20) $ (0.10)
Diluted:
Weighted-average shares outstanding .............. 21,286 19,629 20,478 16,694
Income (loss) per share .......................... $ 0.05 $ 0.11 $ (0.20) $ (0.10)
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE> 5
AMERICAN CLASSIC VOYAGES CO.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
For the Nine Months
Ended September 30,
---------------------------
2000 1999
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss ....................................................... $ (4,076) $ (1,717)
Depreciation expense ....................................... 11,923 12,472
Changes in working capital and other:
Working capital changes and other ...................... (9,785) (4,450)
Unearned passenger revenues ............................ 10,883 22,043
--------- ---------
Net cash provided by operating activities .................. 8,945 28,348
--------- ---------
INVESTING ACTIVITIES:
Capital expenditures ........................................... (169,724) (45,108)
Purchase of marketable securities .............................. (3,877) --
Increase in restricted investments ......................... (43,591) (1,000)
--------- ---------
Net cash used in investing activities ...................... (217,192) (46,108)
--------- ---------
FINANCING ACTIVITIES:
Proceeds from borrowings ....................................... 91,300 2,000
Repayment of borrowings ........................................ (26,737) (5,262)
Issuance of convertible preferred securities of subsidiary trust 100,000 --
Proceeds from issuance of common stock, net .................... 53,300 65,989
Deferred financing fees ........................................ (4,234) (2,224)
--------- ---------
Net cash provided by financing activities .................. 213,629 60,503
--------- ---------
Increase in cash and cash equivalents ............................. 5,382 42,743
Cash and cash equivalents, beginning of period .................... 42,399 27,004
--------- ---------
Cash and cash equivalents, end of period .......................... $ 47,781 $ 69,747
--------- ---------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of capitalized interest) ..................... $ 949 $ 4,676
Income taxes ............................................... 71 165
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
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AMERICAN CLASSIC VOYAGES CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Unaudited)
1. BASIS OF PRESENTATION
These accompanying unaudited Condensed Consolidated Financial Statements
("Financial Statements") have been prepared pursuant to Securities and Exchange
Commission ("SEC") rules and regulations and should be read in conjunction with
the Consolidated Financial Statements and Notes thereto included on Form 10-K
for the year ended December 31, 1999 (the "Form 10-K") for American Classic
Voyages Co. ("AMCV") and its subsidiaries. These Financial Statements include
the accounts of AMCV and its wholly owned subsidiaries, The Delta Queen
Steamboat Co. ("DQSC"), Great Hawaiian Cruise Line, Inc. and Project America,
Inc. (collectively with such subsidiaries, the "Company"). The following notes
to the Financial Statements highlight significant changes to the notes included
in the Form 10-K and such interim disclosures as required by the SEC. These
Financial Statements reflect, in the opinion of management, all adjustments
necessary for a fair presentation of the interim financial statements. All such
adjustments are of a normal and recurring nature. Certain previously reported
amounts have been reclassified to conform to the 2000 presentation.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
2. RESTRICTED CASH
The $43.6 million increase in restricted cash through September 30, 2000
reflects 1) $30 million invested in a certificate of deposit which is being used
as a collateral deposit for a letter of credit related to an October 2000 ship
acquisition (see Notes 7, 8 and 11 for further information), and 2) $13.6
million of proceeds from an August 10, 2000 debt issuance which were placed into
an escrow account (see Note 5 for further information).
3. SHORT-TERM INVESTMENTS
Under the definitions provided in Statement of Financial Accounting Standards
No. 115, Accounting for Certain Investments in Debt and Equity Securities, the
Company has purchased securities which have been classified as available for
sale and are, therefore, recorded at their fair values. The fair value for these
securities approximates cost due to the short maturities of the instruments.
4. VESSELS UNDER CONSTRUCTION
The vessels under construction balance includes payments to shipyards, design
and engineering fees, construction management and oversights costs, various
owner supplied items and capitalized interest. There are five vessels under
construction or conversion: two coastal cruise vessels named the
Cape May Light and Cape Cod Light; two newbuilds, as of yet unnamed, for the
Hawaii cruise market; and the ms Patriot. The balance for the ms Patriot
consists of design and engineering fees and various owner supplied items which
have been purchased in advance of taking delivery of the ship.
Capitalized interest on the vessels under construction amounted to $2.8 million
and $0.3 for the three months ended September 30, 2000 and 1999, respectively.
Capitalized interest amounted to $6.8 million and $0.5 for the nine months ended
September 30, 2000 and 1999, respectively.
The Columbia Queen riverboat was placed into service on May 27, 2000 and its
capitalized cost of $43.4 million, including capitalized interest, was
transferred from vessels under construction to property and equipment. The
vessel is being depreciated over 30 years with a 15% salvage value.
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5. NOTES PAYABLE
On February 10, 2000 and August 10, 2000, the Company issued $25 million and $50
million, respectively, of notes guaranteed by the Maritime Administration
("MARAD"). These are the first issuances of debt under the $1.1 billion of
financing guarantees from MARAD for the construction of the Hawaii cruise
vessels. The notes, which relate to the first Hawaii cruise vessel, bear
interest at LIBOR minus 0.05%. Interest is payable quarterly beginning April 28,
2000 for the $25 million note and October 31, 2000 for the $50 million note. The
entire principal amount is due on January 31, 2001 for the $25 million note and
July 31, 2001 for the $50 million note. The Company intends to refinance these
notes on or before the maturity date.
Upon issuance of the notes, the proceeds were deposited into an escrow account
maintained by MARAD. From time to time, the Company requests that MARAD
authorize the escrow agent to release funds to the Company to reimburse it for
payments it has made in connection with the construction of the vessel. At
September 30, 2000, all but $13.6 million of the proceeds of these first two
note issuances had been released to the Company.
6. DEBT
Long-term debt consisted of (in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
-------------- --------------
<S> <C> <C>
U.S. Government Guaranteed Ship Financing Note, American Queen Series .......... $11,961 $14,385
U.S. Government Guaranteed Ship Financing Bond, American Queen Series .......... 36,198 36,198
U.S. Government Guaranteed Ship Financing Note, Independence Series A .......... 7,265 7,926
U.S. Government Guaranteed Ship Financing Bond, Independence Series A .......... 13,215 13,215
U.S. Government Guaranteed Ship Financing Note, Independence Series B .......... 1,947 2,124
U.S. Government Guaranteed Ship Financing Bond, Independence Series B .......... 3,540 3,540
Chase credit facility (maximum availability of $30 million at September 30, 2000
and $70 million at December 31, 1999) ...................................... -- 7,175
------- -------
74,126 84,563
Less current portion ........................................................... 4,100 4,100
------- -------
$70,026 $80,463
======= =======
</TABLE>
In the third quarter of 2000, DQSC, as borrower, amended its credit facility
with The Chase Manhattan Bank, as agent, and several participant banks (the
"Chase Facility"). The Company has a maximum of $30 million available to it in
the form of revolving credit loans until the maturity date of the facility,
which is September 13, 2001. Any amounts outstanding on the maturity date will
be converted to a non-amortizing term loan which matures on September 13, 2002.
Borrowings under the amended facility bear interest at a rate, at the option of
the Company, equal to either (1) the greater of Chase's prime rate or certain
alternative base rates plus a margin ranging from 0.50% to 0.75%, or (2) LIBOR
plus a margin ranging from 1.50% to 1.75%. The Company is also required to pay
an unused commitment fee at a rate of 0.50% per annum.
The Chase Facility will be used for general corporate purposes. The amended
facility is guaranteed by AMCV and secured by all of the assets of DQSC except
the American Queen, Columbia Queen, Cape May Light and Cape Cod Light and has
various limitations and restrictions on investments, additional indebtedness,
the construction costs of the new vessels, and other capital expenditures. DQSC
is required to comply with certain financial covenants, including maintenance of
minimum interest coverage ratios and maximum leverage ratios.
In 1999, the Company received a commitment from MARAD for up to $1.1 billion in
financing guarantees. The commitment amount represents 87.5% of the total
maximum potential cost of the initial two Hawaii vessels, including shipyard
costs, contingencies, capitalized interest, and guarantee fees. See Notes 5 and
11 for further information.
7
<PAGE> 8
On March 31, 2000, the Company received a commitment from MARAD for up to $78.3
million in financing guarantees. The commitment amount represents 87.5% of the
total maximum potential cost of the initial two coastal vessels currently under
construction, including shipyard costs, contingencies, capitalized interest, and
guarantee fees. See Note 11 for further information.
As of September 30, 2000, the Company complied with all covenants under its
various debt agreements.
7. TRUST PREFERRED SECURITIES
On February 22, 2000, the Company completed an offering of 2,000,000
Company-obligated mandatorily redeemable convertible preferred securities of a
subsidiary trust ("trust preferred securities"). Each $50 security bears
interest at 7% and is convertible at the holder's election into 1.6207 shares of
common stock. All outstanding preferred securities are redeemable on February
15, 2015 or upon early redemption. The outstanding preferred securities may be
redeemed for cash at the Company's option on or after February 19, 2003. The net
proceeds to the Company, after underwriting fees and other costs, were
approximately $96.3 million. A portion of the proceeds were used to fund the $30
million letter of credit facility related to the ms Nieuw Amsterdam purchase
(see Note 8 for further information) and to pay down outstanding amounts on the
Chase credit facility. The underwriters' overallotment option of 300,000
additional trust preferred securities was not exercised.
8. COMMITMENTS AND CONTINGENCIES
SHIP PURCHASE
In 1999, the Company finalized an agreement with Holland America Line ("HAL") to
purchase the ms Nieuw Amsterdam for $114.5 million. The purchase agreement
required the Company to make an earnest money deposit of $30 million by January
17, 2000. The Company arranged for an unsecured letter of credit facility with
The Chase Manhattan Bank for up to $30 million and satisfied the deposit
requirement by posting a letter of credit for $30 million.
In 1999, persons and entities affiliated with Equity Group Investments, Inc.
("Equity"), the Company's largest stockholder, guaranteed the letter of credit
facility for the Company with The Chase Manhattan Bank for up to $30 million.
Under an agreement dated October 15, 1999, as consideration for issuance of the
guarantee, the Company paid Equity a commitment fee of $500,000 in 1999 and
agreed to pay Equity additional compensation in the form of stock appreciation
units contingent, in part, upon appreciation in the Company's common stock above
$21.90 per share. Equity's rights to receive this additional compensation
vested, on a monthly basis, during the period that the guarantee remained
outstanding. On February 22, 2000, the Company deposited $30 million into a cash
collateral account with Chase from proceeds received by the Company from the
Company's securities offering, as discussed in Note 7, thereby terminating the
Equity guarantee. The Company has the right to retire Equity's stock
appreciation units by paying a per unit price, which escalates each year, during
the first three years after issuance. The price of the Company's right to retire
Equity's stock appreciation units is $11 per share if the Company retires the
units by October 15, 2000, $13 per share if the Company retires the units by
October 15, 2001, and $15 per share if the Company retires the units by October
15, 2002. If the Company does not retire Equity's stock appreciation units
during the first three years after issuance, Equity may exercise, during the
fourth and fifth years after issuance, its right to receive payment based upon
the market value of the Company's common stock at such time. On or before the
first three anniversary dates of the issuance of Equity's stock appreciation
units, the Company will evaluate whether to exercise its right to retire the
units based on the Company's then current stock price, its liquidity and other
factors. It is currently the Company's intent to retire Equity's stock
appreciation units prior to October 15, 2002.
HAL has agreed to provide financing for the remaining portion of the purchase
price of the ms Nieuw Amsterdam totaling $84.5 million for 75 months at the
prevailing prime rate. The HAL financing will be secured by a first preferred
ship mortgage.
See Note 11 for further information.
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9. STOCKHOLDERS' EQUITY
ACCUMULATED DEFICIT
Changes in accumulated deficit for the nine months ended September 30, 2000 were
(in thousands):
Accumulated deficit at December 31, 1999 ............ $(19,573)
Net loss ............................................ (4,076)
--------
Accumulated deficit at September 30, 2000 ........... $(23,649)
--------
COMMON STOCK OFFERING
On February 22, 2000, the Company completed an offering of an additional
2,000,000 shares of common stock. The proceeds to the Company, after
underwriting commissions and other costs, were $46.8 million and are being used
for the construction of the second Hawaii vessel. The underwriters'
overallotment option of 300,000 additional shares was not exercised.
10. EARNINGS PER SHARE
Earnings per share have been computed as follows (in thousands, except per share
data):
For the Three Months
Ended September 30,
--------------------
2000 1999
------- -------
Basic:
Net income ............................................ $ 980 $ 2,091
Weighted average shares outstanding ................... 21,013 18,505
------- -------
Earnings per share .................................... $ 0.05 $ 0.11
------- -------
Diluted:
Net income ............................................ $ 980 $ 2,091
Weighted average shares outstanding ................... 21,013 18,505
Additional shares issuable under various stock plans... 273 1,124
------- -------
Diluted weighted average shares outstanding ........... 21,286 19,629
------- -------
Earnings per share .................................... $ 0.05 $ 0.11
------- -------
As the Company reported losses for the nine months ended September 30, 2000 and
1999, diluted earnings per share was computed in the same manner as basic
earnings per share. Conversion of trust preferred securities is not assumed, as
the result would be antidilutive to the earnings and loss per share.
11. SUBSEQUENT EVENTS
DEBT ISSUANCE
On October 16, 2000, the Company issued $76.4 million of long-term bonds
guaranteed by MARAD. The bonds bear interest at 7.25% per annum. The bonds were
issued pursuant to a commitment received by the Company from MARAD for up to
$78.3 million of financing guarantees for the construction of the Cape May Light
and Cape Cod Light. The proceeds will be used to finance the construction of the
vessels. See Note 6 for further information.
On November 9, 2000, the Company issued $50 million of notes guaranteed by MARAD
for construction of the first Hawaii cruise vessel. The notes bear interest at
LIBOR minus 0.10% per annum. Interest is payable quarterly beginning January 31,
2001. The entire principal amount is due on October 31, 2001. The Company
intends to refinance these notes on or before the maturity date.
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SHIP ACQUISITION
On October 18, 2000, the Company purchased the ms Nieuw Amsterdam from HAL for
$114.5 million. Accordingly, the $30 million in restricted cash was released to
HAL and a promissory note signed by the Company for the remaining portion of the
purchase price. The promissory note bears interest at a floating rate equal to
the prevailing prime rate, which is currently 9.50%. Principal paydowns of $5.1
million are scheduled for each March 31st and September 30th, beginning March
31, 2001, with a final payment of $23.7 million due on January 18, 2007.
COMMITMENTS AND CONTINGENCIES
After giving consideration to the Company's then current stock price and other
factors, the Company decided not to exercise its right to retire Equity's vested
stock appreciation units by October 15, 2000. Accordingly, the Company accrued
an additional $2 per vested unit, or $0.6 million, in other financing costs on
that date.
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AMERICAN CLASSIC VOYAGES CO.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
American Classic Voyages Co. is a holding company which owns and controls The
Delta Queen Steamboat Co., Great Hawaiian Cruise Line, Inc. and Project America,
Inc. Through our various subsidiaries, we currently operate two cruise lines:
Delta Queen, which owns and operates the American Queen, Mississippi Queen and
Delta Queen steamboats; and American Hawaii, which owns and operates the
Independence steamship. Delta Queen also owns and operates the Columbia Queen
riverboat which began operating on May 27, 2000. We have formed a third cruise
line, United States Lines, to operate the ms Patriot and the new Hawaii cruise
vessels.
Our revenues are composed of:
(1) cruise fares;
(2) onboard revenues, such as those from gift shops and shore excursions; and
(3) trip cancellation insurance and pre- and post-cruise hotel packages.
Additional revenue is also derived from the sale of airplane tickets to and from
points of embarkation or disembarkation. Our cost for air tickets typically
matches the revenue we generate from sales of airline tickets, so we recognize
minimal profits from such sales.
Our cost of operations are composed of:
(1) passenger expenses, such as employee payroll and benefits and the cost of
food and beverages;
(2) vessel operating costs including lay-up and drydocking costs for our
vessels;
(3) insurance costs;
(4) commissions paid to travel agents; and
(5) air ticket and hotel costs.
When we receive deposits from passengers for cruises, we establish a liability
for unearned passenger revenue. We recognize these deposits as revenue on a
pro-rata basis during the associated cruise. Our revenues and some of our
expenses vary considerably when measured on a quarterly basis. This is due to
the seasonality of our Delta Queen revenues, the timing of our layups and
drydockings, and fluctuations in airfares. Fare revenue variations are reflected
in our fare revenues per passenger night, which are commonly referred to as fare
per diems, and our occupancy rates.
Delta Queen's operations are seasonal. Historically, we have had greater
passenger interest and higher yields in the spring and fall months of the year.
The vessels typically undergo their annual layups in December or January. While
American Hawaii has historically experienced greater passenger interest in the
summer and fall months of the year, quarterly variations in its revenues are
much smaller than those of Delta Queen. During the summer months, in particular,
American Hawaii tends to have average occupancies in excess of 100% as the
number of families sharing cabins with children increases significantly during
this period.
The following discusses the Company's consolidated results of operations and
financial condition for the three months and nine months ended September 30,
2000 versus the comparable periods ended September 30, 1999. This section should
be read in conjunction with the Management's Discussion and Analysis of
Financial Condition and Results of Operations included in the Company's Form
10-K for the year ended December 31, 1999.
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RESULTS OF OPERATIONS
Operations data expressed as a percentage of total revenue for the periods
indicated is as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2000 1999 2000 1999
------ ------ ------ ------
Revenues
100% 100% 100% 100%
Costs and Expenses:
Operating expenses ........... 62 62 64 64
Selling and administrative.... 29 24 32 28
Depreciation ................. 6 7 7 8
Operating income (loss) ......... 3 6 (4) (1)
Net income (loss) ............... 2 4 (3) (1)
Selected operating statistics for the periods indicated are as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ---------------------------
2000 1999(5) 2000 1999(5)
----------- --------- --------- ---------
<S> <C> <C> <C> <C>
Fare revenue per passenger night ........................... $ 239 $ 227 $ 233 $ 222
Total revenue per passenger night .......................... $ 328 $ 319 $ 324 $ 315
Weighted average operating days (1):
DELTA QUEEN ........................................... 92 92 230 250
AMERICAN HAWAII ....................................... 92 92 256 273
Vessels capacity per day (berths) (2):
DELTA QUEEN ........................................... 1,183 1,026 1,183 1,026
AMERICAN HAWAII ....................................... 863 867 863 867
Passenger nights (3) ....................................... 190,617 180,133 492,527 486,503
Physical occupancy percentage (berths) (4) ................ 102% 103% 100% 99%
</TABLE>
--------------------
(1) Weighted average operating days for each cruise line is determined by
dividing capacity passenger nights for each cruise line by the cruise
line's total vessel capacity per day. Delta Queen's weighted average
operating days for the nine months ended September 30, 2000 are not
comparable to the prior year due to the Columbia Queen introduction in May,
2000. Capacity passenger nights is determined by multiplying, for the
respective period, the actual operating days of each vessel by each
vessel's capacity per day.
(2) Vessel capacity per day represents the number of passengers each cruise
line can carry assuming double occupancy for cabins which accommodate two
or more passengers. Some cabins on the Independence and the American Queen
can accommodate three or four passengers.
(3) A passenger night represents one passenger spending one night on a vessel;
for example, one passenger taking a three-night cruise would generate three
passenger nights.
(4) Physical occupancy percentage is passenger nights divided by capacity
passenger nights
(5) For the three months ended September 30, 1999, passenger nights, fare and
total revenue per passenger night and occupancy percentage were previously
reported as 176,805, $231, $325 and 102% respectively. For the nine months
ended September 30, 1999, passenger nights, fare and total revenue per
passenger night and occupancy percentage were previously reported as
476,460, $227, $322 and 97%, respectively. 1999 amounts have been
recalculated to conform to the current presentation, which now includes
passengers sailing on complimentary tickets. The current presentation will
be used in the future.
12
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RESCISSION OF ACCOUNTING METHOD
On November 2, 1999, we announced that we had rescinded our prior adoption of
the American Institute of Certified Public Accountants Accounting Standards
Executive Committee's Statement of Position ("SOP") No. 93-7, "Reporting on
Advertising Costs," relating to the deferral of direct response advertising
costs. The deferral method provided for in SOP 93-7 was adopted in 1999, and
made effective as of January 1, 1999. Under SOP 93-7, we deferred recognition of
direct response advertising costs related to direct response advertising efforts
for future cruises. These deferred costs were recognized in the periods that the
cruises promoted by the efforts were completed, and the related cruise revenue
recognized. We rescinded our adoption of SOP 93-7 due to difficulties
encountered in implementing the new method. In rescinding SOP 93-7, we returned
to our prior method of recognizing expenses for direct response advertising
costs when those costs are incurred. As a result of the rescission of SOP 93-7,
we restated our earnings for the first quarter of 1999 to reflect a loss of $6.3
million, or ($0.44) per share, compared to our previously reported loss of $4.5
million, or ($0.32) per share. We also restated our earnings for the second
quarter of 1999 to $2.5 million, or $0.14 per share compared to our previously
reported earnings of $2.4 million or $0.13 per share. As previously disclosed,
the Securities and Exchange Commission is conducting an informal investigation
into our adopting and then rescinding the AICPA's Statement of Position No. 93-7
relating to the deferral of direct response advertising costs. While the SEC has
not brought any formal proceedings against us, it is possible that the SEC's
informal inquiry or a subsequent formal inquiry or proceeding could result in
sanctions or orders against us. We cannot predict at this time whether any such
sanctions would have a material impact.
QUARTER ENDED SEPTEMBER 30, 2000 COMPARED TO QUARTER ENDED SEPTEMBER 30, 1999
Consolidated third quarter 2000 revenues increased $5.0 million to $62.5 million
from $57.5 million for the third quarter of 1999. This represents a $4.6 million
increase in fare revenues combined with a $0.4 million increase in other
revenues. American Hawaii's fare revenues increased $1.2 million due to an 9%
increase in fare per diems to $190 from $174. Delta Queen's fare revenues
increased $3.4 million. Capacity increased by 16% due to the Columbia Queen
introduction. Actual passenger nights increased by only 12% as occupancy on the
other three steamboats decreased by 3%. Fare per diems increased 1% to $282 from
$280. As a result, consolidated fare per diems for the third quarter of 2000
increased 5% to $239 from $227. The $0.4 million increase in other revenues was
attributable to a increase in onboard revenues at American Hawaii.
Consolidated cost of operations for the third quarter of 2000 increased $2.8
million to $38.6 million from $35.8 million for 1999. American Hawaii's
operating costs increased $0.8 million reflecting an increase in air ticket
costs and higher fuel costs. Delta Queen's operating costs increased $2.0
million as a result of the Columbia Queen introduction and higher fuel and
maintenance costs. Offsetting this increase in operating costs were decreases in
commission expense on the three original steamboats related to the occupancy
decrease and a decrease in air and land expense. Consolidated gross profit
increased $2.2 million in the third quarter of 2000 from 1999 as a result of the
Columbia Queen introduction and higher fare per diems at American Hawaii.
Consolidated selling, general and administrative expenses increased $4.5 million
to $18.3 million for the third quarter of 2000 from $13.8 million in 1999.
Marketing expenses for the Patriot and the Delta Queen Coastal vessels were $3.0
million in 2000. There were no marketing expenses in the comparable period in
the prior year for these vessels. We also incurred $0.6 million of start-up
costs during the quarter, primarily related to the Patriot. We incurred no
start-up costs in connection with our new vessels in the third quarter of 1999.
Marketing expenses for our vessels in operation were $0.8 million lower than in
the prior year. This decrease was offset by a $1.7 million increase in general
and administrative expenses primarily related to salary and benefits associated
with new personnel hired within the past year and consulting costs incurred in
connection with our capacity expansion efforts.
The consolidated operating income for the third quarter of 2000 was $1.6 million
as compared to $3.7 million for 1999.
Interest income increased by $0.7 million as a result of higher average cash and
marketable securities balances resulting from proceeds received by us upon the
sale of additional common stock and other securities in February 2000 and on
escrowed proceeds from our debt issuance.
During the current quarter, we capitalized $2.8 million of interest expense
related to our vessels under construction. We capitalized $0.3 million of
interest expense in the prior year.
We accrued for distributions on trust preferred securities of $1.2 million, net
of tax, in the third quarter of 2000 for our trust preferred securities.
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NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1999
Consolidated first nine months of 2000 revenues increased $6.5 million to $159.7
million from $153.2 million for the first nine months of 1999. This represents a
$6.7 million increase in fare revenues combined with a $0.2 million decrease in
other revenues. American Hawaii's fare revenues decreased $0.1 million due to a
7% decrease in capacity passenger nights as a result of the scheduled 18-day
Independence drydock. This was offset by a 7% increase in fare per diems to $195
from $183. Delta Queen's fare revenues increased $6.8 million. Capacity
passenger nights increased 6% due to the Columbia Queen introduction. Occupancy
rates also increased 3% from 91% to 94% and fare per diems increased 1% to $268
from $265. As a result, consolidated fare per diems for the first nine months of
2000 increased 5% to $233 from $222.
Consolidated cost of operations for the first nine months of 2000 increased $4.1
million to $102.3 million from $98.2 million for 1999. American Hawaii's
operating costs decreased $0.9 million reflecting lower passenger, commission,
air and hotel expenses associated with the capacity passenger night decrease
offset by higher fuel prices. Delta Queen's operating costs increased $4.8
million reflecting the capacity and occupancy increase, and higher fuel and
maintenance costs. Consolidated gross profit increased $2.5 million in the first
nine months of 2000 from 1999 as a result of capacity and occupancy increase at
Delta Queen and the increase in fare per diems at American Hawaii.
Consolidated selling, general and administrative expenses increased $8.2 million
to $51.4 million for the first nine months of 2000 from $43.3 million in 1999.
Marketing expenses for the Delta Queen coastal vessels and Patriot were $8.3
million. There were no marketing expense in the comparable period of the prior
year for these vessels. We also incurred $1.3 million of start-up costs in the
first nine months of 2000, related to the Columbia Queen and the Patriot. We
incurred no start-up costs in connection with our new vessels in the first nine
months of 1999. Marketing expenses for our vessels in operation were $6.2
million lower than in the prior year. This decrease was offset by a $4.7 million
increase in general and administrative expenses primarily related to salary and
benefits associated with new personnel hired or contracted within the past year
in connection with our capacity expansion efforts.
The consolidated operating loss for the first nine months of 2000 was $5.9
million as compared to $0.8 million for 1999.
Interest income increased by $2.7 million as a result of higher average cash and
marketable securities balances resulting from proceeds received by us upon the
sale of additional common stock and other securities in April 1999 and February
2000.
Interest expense and other financing costs of $1.0 million in the first nine
months of 2000 represent the accrual of $0.5 million payable to the guarantor of
our letter of credit facility related to our agreed upon purchase of the ms
Nieuw Amsterdam in October 2000. Additionally, we amortized $0.5 million of
deferred financing fees related to this transaction. During the first nine
months of 2000, we capitalized $6.8 million of interest expense related to our
vessels under construction. We capitalized $0.5 million of interest expense in
the prior year.
We accrued for distributions on trust preferred securities of $2.8 million, net
of tax, in the first nine months of 2000 for our trust preferred securities.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION
Operating Activities
For the nine months ended September 30, 2000, cash provided by operations was
$8.9 million compared to $28.3 million in 1999. Of the decrease, $11.2 million
reflects a smaller seasonal increase in unearned passenger revenue, which
increased $10.9 million from December 31, 1999 to September 30, 2000, as
compared to an increase of $22.0 million from December 31, 1998 to September 30,
1999. The increase in unearned passenger revenues was greater in 1999 than in
2000 due to deposits received in 1999 for millennium cruises, differences in the
timing of receipts of final payment from travel agents and lower advance
reservations. The remainder of the decrease in cash provided by operations
reflects 1) the greater net loss through the first nine months of 2000 as
compared to 1999, and 2) the payment of costs during the first quarter of 2000
that had been accrued as of December 31, 1999 for layups, drydockings and
employee bonuses. Such costs accrued at December 31, 1999 and paid during the
first quarter of 2000 were approximately $5.0 million higher than similar costs
accrued at December 31, 1998 and paid in the first quarter of 1999.
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Investing Activities
Our capital expenditures of $169.7 million included $163.7 million for vessels
under construction which mainly consists of payments to shipyards. Other capital
costs for the new shipbuilding programs include technical design, engineering,
architectural fees and capitalized interest. For the Hawaii cruise ships under
construction, we spent $93.4 million during the first nine months of 2000, while
$70.3 million was spent on the Columbia Queen and Delta Queen coastal vessels
projects. Other capital expenditures of $6.0 million were mainly related to
layups for our existing Delta Queen vessels and the Independence drydock, all of
which were completed in the first quarter of 2000. With proceeds from our common
stock and preferred securities offerings, as described below, we purchased $3.9
million of short-term investments. Proceeds from these offerings were also used
to fund a $30 million cash collateral account related to the October 2000
acquisition of the ms Nieuw Amsterdam. The remaining increase in restricted cash
reflects a portion of proceeds placed into escrow from the issuance of $50
million in notes.
Financing Activities
Total proceeds from borrowings of $91.3 million includes the issuance of $75.0
million of one year notes related to the first Hawaii vessel under construction.
The remaining amount represents borrowings under our credit facility. Our total
repayments of borrowings of $26.7 million represents the paydown of all
outstanding amounts on our credit facility of $23.5 million and scheduled
principal payments of $3.2 million under the American Queen and Independence
ship financing notes. We completed a public offering of an additional 2,000,000
shares of common stock. The net proceeds to us, after underwriting commissions
and other costs, were approximately $46.8 million and are being used for
construction of the second Hawaii vessel. Additional proceeds from the issuance
of common stock were received from employee stock option exercises. We also
completed a public offering of 2,000,000 American Classic Voyages Co. obligated
mandatorily redeemable convertible preferred securities of a subsidiary trust
(trust preferred securities). The net proceeds to us, after deferred financing
fees, consisting of underwriting fees and other costs of $3.7 million, were
$96.3 million.
Capital Expenditures and Debt
At September 30, 2000, we had approximately $95.5 million in cash, restricted
cash, and short-term investments. These funds, along with future cash from
operations and debt to be issued with the financing guarantees from the Maritime
Administration, are expected to be our principal source of capital to fund our
working capital and debt service requirements, ship construction costs and
distributions on trust preferred securities. Additionally, we may also fund a
portion of these cash requirements from borrowings under our revolving credit
facility of which we had a maximum of $30 million available to us at September
30, 2000.
For the Hawaii cruise market, we are constructing two new cruise ships over the
next five years and will introduce an existing foreign-built cruise ship, which
we acquired on October 18, 2000, into the Hawaii market prior to delivery of the
new vessels. In 1999, we signed a definitive agreement with Ingalls Shipbuilding
to construct two passenger ships, each containing approximately 1,900 passengers
berths, with options to build up to four additional vessels. We expect the cost
of the first ship, inclusive of shipyard contract price, shipyard incentives,
design and engineering fees, construction management and oversight costs,
various owner supplied items, and exclusive of capitalized interest, to be
approximately $499 million, and the second ship to be approximately $490
million. The agreement provides that the first ship will be delivered in January
2003 and the second ship in January 2004. We will finance a significant portion
of the construction cost of the Hawaii cruise ships through the Maritime
Administration, which provides guarantees of private financing for new vessel
construction projects conducted in U.S. shipyards. During the next twelve
months, we expect to spend approximately $155 million on building the first new
Hawaii cruise vessel and $85 million on building the second new Hawaii cruise
vessel.
On October 18, 2000, we acquired the ms Nieuw Amsterdam from Holland America
Line for $114.5 million, consummating an agreement entered into in 1999. We paid
Holland America Line $30.0 million cash and issued a $84.5 million note for the
balance of the purchase price. The note matures in 75 months, bears interest on
a floating basis at the prevailing prime rate and is secured by a first
preferred ship mortgage.
Upon taking delivery of the ship, we renamed it the ms Patriot. The vessel will
undergo a refurbishment and conversion, which will cost approximately $19.0 to
$21.0 million, prior to entering service in Hawaii in December 2000.
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<PAGE> 16
As part of the agreement to acquire the Nieuw Amsterdam, we were required to
make an earnest money deposit of $30.0 million by January 17, 2000. We arranged
for an unsecured letter of credit facility with The Chase Manhattan Bank for up
to $30.0 million and satisfied the deposit requirement under the Holland America
Line agreement by posting letters of credit for $30.0 million.
In 1999, persons and entities affiliated with Equity Group Investments, Inc.
("Equity"), our largest stockholder, guaranteed the letter of credit facility
for us with The Chase Manhattan Bank for up to $30 million. Under an agreement
dated October 15, 1999, as consideration for issuance of the guarantee, we paid
Equity a commitment fee of $500,000 in 1999 and agreed to pay Equity additional
compensation in the form of stock appreciation units contingent, in part, upon
appreciation in our common stock above $21.90 per share. Equity's rights to
receive this additional compensation vested, on a monthly basis, during the
period that the guarantee remained outstanding. On February 22, 2000, we
deposited $30 million into a cash collateral account with Chase from proceeds
received by us from our securities offering thereby terminating the Equity
guarantee. We have the right to retire Equity's stock appreciation units by
paying a per unit price, which escalates each year, during the first three years
after issuance. The price of our right to retire Equity's stock appreciation
units was $11 per share if we retired the units by October 15, 2000, $13 per
share if we retire the units by October 15, 2001, and $15 per share if we retire
the units by October 15, 2002. After giving consideration to our then current
stock price, our liquidity and other factors, we decided not to exercise our
right to retire Equity's vested stock appreciation units by October 15, 2000.
Accordingly, we accrued for an additional $2 per vested unit, or $0.6 million,
in other financing costs on that date. If we do not retire Equity's stock
appreciation units during the first three years after issuance, Equity may
exercise, during the fourth and fifth years after issuance, its right to receive
payment based upon the market value of our common stock at such time. On or
before the next two anniversary dates of the issuance of Equity's stock
appreciation units, we will evaluate whether to exercise our right to retire the
units based on our then current stock price and other factors. It is currently
our intent to retire Equity's stock appreciation units prior to October 15,
2002.
We entered into a construction contract in 1999 with Atlantic Marine, Inc. of
Jacksonville, Florida to construct the first two coastal cruise vessels, named
the Cape May Light and Cape Cod Light, for our Delta Queen line. Under the
construction contract, the price of the vessels will be $30 million each. We
expect each vessel to have a total construction cost, including design and
engineering fees, construction management and oversight costs, various owner
supplied items, and exclusive of capitalized interest, to be approximately $40
million. The contract provides that the delivery date will be March 2001 for the
Cape May Light and June 2001 for the Cape Cod Light.
During the next twelve months, we expect to spend up to $16 million on building
the Cape May Light and up to $20 million on the Cape Cod Light. This will be
funded from cash on hand and debt guaranteed by the Maritime Administration. On
October 16, 2000, we issued $76.4 million of debt guaranteed by the Maritime
Administration.
As of September 30, 2000, we complied with all covenants under our various debt
agreements.
We believe we will have adequate access to capital resources, both internally
and externally, to meet our current short-term and long-term capital
commitments. Such resources may include cash on hand, new borrowings from
lenders, and the ability to secure additional financing through the capital
markets. We continually evaluate opportunities to increase capacity at both
Delta Queen and in Hawaii and to strategically grow our business. Although we
believe that we have obtained sufficient equity and debt financing from the
capital markets to satisfy our financial obligations relating to construction of
the new vessels, and to acquire, renovate and introduce the ms Patriot into
service, we cannot assure you that we will be able to obtain additional
financing, if necessary, at commercially acceptable levels to finance these
projects and, if we so choose, to pursue strategic business opportunities. If we
fail to obtain such financing, we may have to postpone or abandon some of our
plans.
OTHER MATTERS
Relocation
On September 8, 2000, we announced that we will relocate our Chicago corporate
office and most of our New Orleans operations to South Florida. We will incur
relocation and severance costs in connection with the move.
The employee relocation costs, to be expensed as incurred over approximately the
next 18 months, are expected to range from $0.5 million to $1.0 million. Other
relocation costs for the move of our equipment and furniture will be expensed as
incurred and will cost up to $0.5 million.
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We have offered to relocate most employees to the new location but have not yet
determined which employees are likely to move. As we determine which employees
or groups of employees will not relocate, we will charge to expense severance
costs for employees. In addition, beginning in January 2001, we will pay certain
employees a retention bonus. The severance and retention costs to be accrued
over approximately the next six to twelve months are not expected to exceed $4.0
million.
We have not yet determined whether we will fully vacate our Chicago and New
Orleans facilities, or whether we will continue to use these facilities for some
period of time. If we choose to vacate or reduce the size of one or both of our
offices, we may incur costs to terminate a lease or we may accelerate
depreciation expense due to revision of the useful lives of our existing
leasehold improvements. At this time, we cannot yet estimate any potential lease
termination expenses or accelerated depreciation.
In connection with the relocation, we will become eligible for incentives of up
to $3.8 million from state and local municipalities, such as tax refunds and
direct cash incentives upon occupancy. These incentives will be recognized in
the future upon occupancy of the new headquarters facility and as taxes eligible
for refund are incurred.
Stock Repurchase Plan
In June 1997, our board of directors approved a stock repurchase plan. The plan
authorizes us to repurchase up to one million shares of our stock. These shares
may be purchased from time to time in the public market or through privately
negotiated transactions. As of December 31, 1998, we had repurchased 51,000
shares at an average purchase price of $14.84 per share under the plan. We have
not purchased any additional shares since then and currently have no intention
to repurchase any additional shares of common stock.
Factors Concerning Forward-Looking Statements
Certain statements in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" constitute "forward-looking statements"
which we believe are within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause our actual results,
performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. These forward-looking statements are not guarantees of future
performance and are subject to certain risks, uncertainties and assumptions.
Such factors include, among others, the following: the SEC is conducting an
informal inquiry of our accounting practices with respect to direct response
advertising costs; construction delays and deviations from specifications for
the new vessels may adversely affect expansion plans and future financial
performance; failure to obtain significant amounts of capital to build, purchase
and renovate vessels, may adversely affect our expansion plans and future
operating results; increased leverage may adversely affect our financial
performance and cash flow; inability to maintain adequate managerial resources
during our expansion may adversely affect our business; inability to manage our
financial resources during our expansion may adversely affect our financial
performance; if demand for our new cruise products fails to develop as expected
or competition increases, our business may be adversely affected; increased
capacity in Hawaii may reduce occupancy on the Independence, adversely affecting
revenues; loss of exclusive rights of the Pilot Project Statute may adversely
affect our revenue growth in Hawaii; modification of existing governmental
regulations may adversely affect our business; increased fuel prices may
adversely affect our financial performance; increased competition in the Hawaii
cruise market and from other vacation alternatives may adversely impact our
financial performance; increases in cruise industry capacity may adversely
affect our revenues; sensitivity of the vacation and leisure industry to general
economic and business conditions; failure to complete drydocking on schedule or
within budget may adversely affect our revenues; weather factors can adversely
affect our operations and our financial performance; the loss of vessels from
service would adversely impact our business; anti-takeover and transferability
limitations of U.S. ownership requirements may adversely affect the liquidity of
our common stock; our controlling stockholder may take actions that adversely
affect our business; sales of our controlling stockholder's shares could have an
adverse effect on our common stock price or ability to raise capital; and our
controlling stockholder may have conflicts of interest with competing interests.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
For a discussion of certain market risks related to us, see Part I Item 7A
"Quantitative and Qualitative Disclosures About Market Risks" in our Annual
Report on Form 10-K for the fiscal year ended December 31, 1999. There have been
no significant developments with respect to exposure to market risk.
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AMERICAN CLASSIC VOYAGES CO.
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings
There are no other material legal proceedings, to which the
Company is a party or of which any of its property is the subject,
other than ordinary routine litigation and claims incidental to
the business. The Company believes it maintains adequate insurance
coverage and reserves for such claims.
ITEM 6. Exhibits and Reports on Form 8-K
a) Exhibits:
4.(ii)(a)(8) Amended and Restated Credit Agreement dated as
of September 14, 2000 among The Delta Queen
Steamboat Co. ("Borrower"), the financial
institutions listed on the signature pages as
Lenders and each other financial institution
which from time to time becomes a party thereto
("Lenders"), The Chase Manhattan Bank, as
Issuing Bank and as Administrative Agent for
the Lenders thereunder (in such latter
capacity, the "Agent"), and Hibernia National
Bank, as Documentation Agent.
4.(ii)(a)(9) Guaranty dated September 14, 2000 executed by
American Classic Voyages Co. in favor of the
Agent.
4.(ii)(a)(10) Amended and Restated Contribution Agreement
dated September 14, 2000 executed by the Parent
Guarantor and each Borrower Subsidiary that is
a party to a Subsidiary Guaranty.
4.(ii)(a)(11) First Amendment to Trust Indenture dated
September 14, 2000 among the Agent, the
Lenders, Great River Cruise Line, L.L.C. and
The Chase Manhattan Bank, as Trustee covering
the Delta Queen (a substantially identical
First Amendment to Trust Indenture covering the
Mississippi Queen and Columbia Queen has also
been executed).
4.(ii)(a)(12) First Amendment to Preferred Ship Mortgage
dated September 14, 2000 executed by Great
River Cruise Line, L.L.C. for the benefit of
The Chase Manhattan Bank, as Trustee covering
the Delta Queen (a substantially identical
First Amendment to Preferred Ship Mortgage
covering the Mississippi Queen and Columbia
Queen has also been executed).
4.(ii)(d)(9) Secretary's Determination, dated August 10,
2000, as it relates to $50,000,000 of United
States Government Guaranteed Ship Financing
Notes.
4.(ii)(d)(10) $50,000,000 Note Purchase Agreement dated
August 10, 2000 as it relates to United States
Government Guaranteed Ship Financing Notes --
Variable Rate Notes due July 31, 2001 signed by
Project America, Inc. and accepted by Chase
Securities, Inc.
4.(ii)(d)(11) $50,000,000 Promissory Note to United States of
America dated August 10, 2000 by Project
America Ship I, Inc.
4.(ii)(e)(1) Commitment to Guarantee Obligations dated
October 16, 2000 by The United States of
America, represented by the Secretary of
Transportation, acting by and through the
Maritime Administrator, and accepted by Cape
May Light, L.L.C., the Shipowner.
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4.(ii)(e)(2) Bond Purchase Agreement dated October 16, 2000
as it relates to United States Government
Guaranteed Ship Financing Bonds, 2000 Series -
7.25% Sinking Fund Bonds due April 15, 2027 in
the aggregate principal amount of $37,900,000
signed by Cape May Light, L.L.C. and accepted
by Chase Securities Inc.
4.(ii)(e)(3) $37,900,000 U.S. Government Guaranteed Ship
Financing Bonds, 2000 Series, 7.25% Sinking
Fund Bonds due April 15, 2027, issued by Cape
May Light, L.L.C.
4.(ii)(e)(4) Trust Indenture Relating to United States
Government Guaranteed Ship Financing
Obligations dated October 16, 2000 between Cape
May Light, L.L.C., as Shipowner, and The Bank
of New York, as Indenture Trustee.
4.(ii)(e)(5) Authorization Agreement dated October 16, 2000
between The United States of America,
represented by the Secretary of Transportation,
acting by and through the Maritime
Administrator, and The Bank of New York, as the
Indenture Trustee under the Trust Indenture
dated October 16, 2000 between the Indenture
Trustee and Cape May Light, L.L.C., the
Shipowner.
4.(ii)(e)(6) Security Agreement Relating to United States
Government Guaranteed Ship Financing
Obligations dated October 16, 2000 between Cape
May Light, L.L.C., as Shipowner, and The United
States of America.
4.(ii)(e)(7) Title XI Reserve Fund and Financial Agreement
dated October 16, 2000 between Cape May Light,
L.L.C. and The United States of America,
represented by the Secretary of Transportation,
acting by and through the Maritime
Administrator.
4.(ii)(e)(8) Guaranty Agreement in Favor of the United
States of America dated October 16, 2000 by and
between Cape May Light, L.L.C., as Guarantor,
and The United States of America, represented
by the Secretary of Transportation, acting by
and through the Maritime Administrator.
4.(ii)(f)(1) Commitment to Guarantee Obligations dated
October 16, 2000 by The United States of
America, represented by the Secretary of
Transportation, acting by and through the
Maritime Administrator, and accepted by Cape
Cod Light, L.L.C., the Shipowner.
4.(ii)(f)(2) Bond Purchase Agreement dated October 16, 2000
as it relates to United States Government
Guaranteed Ship Financing Bonds, 2000 Series -
7.25% Sinking Fund Bonds due April 15, 2027 in
the aggregate principal amount of $38,500,000
signed by Cape Cod Light, L.L.C. and accepted
by Chase Securities Inc.
4.(ii)(f)(3) $38,500,000 U.S. Government Guaranteed Ship
Financing Bonds, 2000 Series, 7.25% Sinking
Fund Bonds due April 15, 2027, issued by Cape
Cod Light, L.L.C.
4.(ii)(f)(4) Trust Indenture Relating to United States
Government Guaranteed Ship Financing
Obligations dated October 16, 2000 between Cape
Cod Light, L.L.C., as Shipowner, and The Bank
of New York, as Indenture Trustee.
4.(ii)(f)(5) Authorization Agreement dated October 16, 2000
between The United States of America,
represented by the Secretary of Transportation,
acting by and through the Maritime
Administrator, and The Bank of New York, as the
Indenture Trustee under the Trust Indenture
dated October 16, 2000 between the Indenture
Trustee and Cape Cod Light, L.L.C., the
Shipowner.
4.(ii)(f)(6) Security Agreement Relating to United States
Government Guaranteed Ship Financing
Obligations dated October 16, 2000 between Cape
Cod Light, L.L.C., as Shipowner, and The United
States of America.
4.(ii)(f)(7) Title XI Reserve Fund and Financial Agreement
dated October 16, 2000 between Cape Cod Light,
L.L.C. and The United States of America,
represented by the Secretary of Transportation,
acting by and through the Maritime
Administrator.
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4.(ii)(f)(8) Guaranty Agreement in Favor of the United
States of America dated October 16, 2000 by
and between Cape Cod Light, L.L.C., as
Guarantor, and The United States of America,
represented by the Secretary of
Transportation, acting by and through the
Maritime Administrator.
4.(ii)(g)(1) Preferred Ship Mortgage dated October 18,
2000 executed by Oceanic Ship Co. in favor
of Hal Antillen N.V. (in connection with the
purchase of the ms Patriot).
4.(ii)(g)(2) $84,500,000 Promissory Note dated October
18, 2000 to Hal Antillen N.V. by Oceanic
Ship Co. (in connection with the purchase of
the ms Patriot).
10.(a)(iv)(10) Amendment "1" to May 1, 1999 Construction
Contract between Coastal Queen Holdings,
L.L.C. and Atlantic Marine, Inc. dated June
13, 2000.
10.(a)(iv)(11) Assignment and Assumption of Contract dated
September 25, 2000 by and between Delta
Queen Coastal Voyages, L.L.C. (f/k/a Coastal
Queen Holdings, L.L.C.), as Assignor, and
Cape May Light, L.L.C. and Cape Cod Light,
L.L.C., as Assignees.
10.(a)(iv)(12) Amendment No. 2 to Construction Contract for
Coastal Queen Class Vessel dated October 16,
2000 by and between Atlantic Marine, Inc.
and Cape May Light, L.L.C. and Cape Code
Light, L.L.C.
27. Financial data schedule.
b) Reports on Form 8-K:
None
20
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN CLASSIC VOYAGES CO.
By: /s/ Philip C. Calian
---------------------------------------------
Philip C. Calian
Chief Executive Officer
By: /s/ Randall L. Talcott
---------------------------------------------
Randall L. Talcott
Vice President-Finance and Treasurer
(Principal Financial and Accounting Officer)
Dated: November 14, 2000
21
