[NOTIFY] 72731,737
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to ________________
Commission file number 1-9610
CARNIVAL CORPORATION
(Exact name of registrant as specified in its charter)
Republic of Panama 59-1562976
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3655 N.W. 87th Avenue, Miami, Florida 33178-2428
(Address of principal executive offices)
(zip code)
(305) 599-2600
(Registrants telephone number, including area code)
None.
(Former name, former address and former fiscal year, if changed since last
report.)
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__
Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of July 10, 1995.
Class A Common Stock, $.01 par value: 229,799,258 shares
Class B Common Stock, $.01 par value: 54,957,142 shares
<PAGE>
CARNIVAL CORPORATION
I N D E X
<TABLE>
<CAPTION>
Page
<S> <C>
Part I. Financial Information
Item 1: Financial Statements
Consolidated Balance Sheets -
May 31, 1995 and November 30, 1994 1
Consolidated Statements of Operations -
Six and Three Months Ended May 31, 1995
and May 31, 1994 2
Consolidated Statements of Cash Flows -
Six Months Ended May 31, 1995
and May 31, 1994 3
Notes to Consolidated Financial Statements 4
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Part II. Other Information
Item 6: Exhibits and Reports on Form 8-K 13
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
CARNIVAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
<TABLE>
<CAPTION>
May 31, November 30,
ASSETS 1995 1994
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $141,511 $54,105
Short-term investments 64,251 70,115
Accounts receivable 32,078 20,789
Consumable inventories, at average cost 48,910 45,122
Prepaid expenses and other 80,405 50,318
Total current assets 367,155 240,449
PROPERTY AND EQUIPMENT--at cost, less
accumulated depreciation and
amortization 3,088,973 3,071,431
OTHER ASSETS
Goodwill, less accumulated amortization of
$44,801 in 1995 and $41,310 in 1994 230,062 233,553
Long-term notes receivable 77,709 76,876
Investments in affiliates and other assets 34,739 47,514
$3,798,638 $3,669,823
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $78,574 $84,644
Accounts payable 88,013 86,750
Accrued liabilities 109,900 114,868
Customer deposits 395,003 257,505
Dividends payable 21,354 21,190
Total current liabilities 692,844 564,957
LONG-TERM DEBT 881,941 1,046,904
CONVERTIBLE NOTES 115,000 115,000
OTHER LONG-TERM LIABILITIES 14,674 14,028
COMMITMENTS AND CONTINGENCIES (Note 5)
SHAREHOLDERS' EQUITY
Class A Common Stock; $.01 par value;
one vote per share; 399,500 shares
authorized; 229,761 and 227,575 shares
issued and outstanding 2,298 2,276
Class B Common Stock; $.01 par value;
five votes per share;
100,500 shares authorized;
54,957 shares issued and
outstanding 550 550
Paid-in-capital 593,503 544,947
Retained earnings 1,505,360 1,390,589
Less-other (7,532) (9,428)
Total shareholders' equity 2,094,179 1,928,934
$3,798,638 $3,669,823
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
CARNIVAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
<TABLE>
<CAPTION>
Six Months Three Months
Ended May 31, Ended May 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
REVENUES $872,646 $794,656 $452,826 $409,400
COSTS AND EXPENSES
Operating expenses 513,176 476,118 265,947 245,847
Selling and administrative 124,246 108,029 60,071 51,553
Depreciation and amortization 62,044 52,716 30,540 26,220
699,466 636,863 356,558 323,620
OPERATING INCOME 173,180 157,793 96,268 85,780
OTHER INCOME (EXPENSE)
Interest income 6,906 3,719 4,907 1,730
Interest expense, net of
capitalized interest (33,315) (24,846) (15,764) (11,709)
Other income (expense) 5,189 65 3,827 164
Income tax benefit 5,361 6,206 531 1,921
(15,859) (14,856) (6,499) (7,894)
NET INCOME $157,321 $142,937 $ 89,769 $ 77,886
EARNINGS PER SHARE $.56 $.51 $.32 $.28
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
CARNIVAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended May 31,
1995 1994
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $157,321 $142,937
Adjustments:
Depreciation and amortization 62,044 52,716
Other 3,395 1,068
Changes in operating assets and liabilities:
Increase in receivables (11,219) (13,034)
Increase in consumable inventories (3,788) (3,249)
Increase in prepaid and other (30,320) (19,319)
Increase in accounts payable 1,263 15,794
Decrease in accrued liabilities (4,968) (178)
Increase in customer deposits 137,498 112,998
Net cash provided from operations 311,226 289,733
INVESTING ACTIVITIES:
Decrease in short-term investments 5,864 14,774
Additions to property and equipment, net (75,919) (95,002)
Decrease (increase) in other non-current assets 11,942 (2,068)
Net cash used for investing activities (58,113) (82,296)
FINANCING ACTIVITIES:
Principal payments of long-term debt (307,257) (165,783)
Dividends paid (42,386) (39,530)
Proceeds from long-term debt 136,212 30,260
Issuance of common stock 47,724 980
Net cash used for financing activities (165,707) (174,073)
Net increase in cash and cash equivalents 87,406 33,364
Cash and cash equivalents at beginning of period 54,105 60,243
Cash and cash equivalents at end of period $141,511 $ 93,607
Supplemental disclosures:
Cash paid during the period for:
Interest (net of amount capitalized) $32,760 $23,848
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
CARNIVAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS FOR PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
The financial statements included herein have been prepared by Carnival
Corporation (the "Company") without audit pursuant to the rules and
regulations of the Securities and Exchange Commission.
The accompanying consolidated balance sheet at May 31, 1995, the
consolidated statements of operations for the six and three months ended May
31, 1995 and 1994 and cash flows for the six months ended May 31, 1995 and
1994 are unaudited and, in the opinion of management, contain all
adjustments, consisting of only normal recurring accruals, necessary for a
fair presentation. The Company's operations are seasonal and results for
interim periods are not necessarily indicative of the results for the entire
year.
The accompanying financial statements include the consolidated balance
sheets and statements of operations and cash flows of the Company and its
subsidiaries. All material intercompany transactions and accounts have been
eliminated in consolidation.
On December 14, 1994, a two-for-one stock split was effected whereby one
additional common share, par value $.01, was issued for each share
outstanding to shareholders of record on November 30, 1994. All share and
per share data appearing in the consolidated financial statements and notes
thereto has been retroactively adjusted for this stock split.
NOTE 2 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
<TABLE>
<Caption
May 31, November 30,
1995 1994
(in thousands)
<S> <C> <C>
Vessels $3,153,567 $3,147,026
Vessels under construction 239,078 207,128
3,392,645 3,354,154
Land, buildings and improvements 125,811 95,294
Transportation and other equipment 157,742 152,649
Total property and equipment 3,676,198 3,602,097
Less - accumulated depreciation and
amortization (587,225) (530,666)
$3,088,973 $3,071,431
</TABLE>
Interest costs associated with the construction of vessels and buildings,
until they are placed in service, are capitalized and amounted to $8.1
million and $9.6 million for the six months ended May 31, 1995 and May 31,
1994, respectively.
<PAGE>
NOTE 3 - LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
May 31, November 30,
1995 1994
(in thousands)
<S> <C> <C>
Unsecured Revolving Credit Facility Due 1999 $ - $238,000
Mortgages and other loans payable bearing interest
at rates ranging from 8% to 9.9%, secured by
vessels, maturing through 1999 247,925 287,642
Unsecured 5.75% Notes Due March 15, 1998 200,000 200,000
Unsecured 6.15% Notes Due October 1, 2003 124,943 124,939
Unsecured 7.20% Debentures Due October 1, 2023 124,864 124,862
Unsecured 7.70% Notes Due July 15, 2004 99,896 99,890
Unsecured 7.05% Notes Due May 15, 2005 99,800
Other loans payable 63,087 56,215
960,515 1,131,548
Less portion due within one year (78,574) (84,644)
$ 881,941 $1,046,904
</TABLE>
Property and equipment with a net book value of $961 million at May 31,
1995 is pledged as collateral against the mortgage indebtedness.
In May 1995, the Company issued $100 million of unsecured 7.05% Notes Due
May 15, 2005 under a shelf registration statement.
In July 1992, the Company issued $115 million of 4-1/2% Convertible
Subordinated Notes Due July 1, 1997. The notes are convertible into 57.55
shares of the Company's Class A Common Stock per $1,000 of notes. As of May
31, 1995 the notes are convertible into 6.6 million shares of Class A Common
Stock.
NOTE 4 - SHAREHOLDERS' EQUITY
The following represents an analysis of the changes in shareholders' equity
for the six months ended May 31, 1995:
<TABLE>
<CAPTION>
COMMON STOCK
$.01 PAR VALUE PAID-IN RETAINED
CLASS A CLASS B CAPITAL EARNINGS OTHER TOTAL
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance November 30, 1994 $2,276 $550 $544,947 $1,390,589 $(9,428) $1,928,934
Net income for the period 157,321 157,321
Cash dividends (42,550) (42,550)
Issuance of common stock 21 46,535 46,556
Changes in securities
valuation allowance 1,023 1,023
Issuance of stock to
employees under stock plans 1 2,021 2,022
Vested portion of common
stock under restricted
stock plan 873 873
Balance May 31, 1995 $2,298 $550 $593,503 $1,505,360 $(7,532) $2,094,179
</TABLE>
<PAGE>
NOTE 5 - COMMITMENTS AND CONTINGENCIES
Capital Expenditures
The following table provides a description of ships currently under
contract for construction (in millions of dollars):
<TABLE>
<CAPTION>
Expected Number Estimated
Delivery Contract of Lower Total
Ship Name Operating Unit Date Denomination Berths Cost
<S> <C> <C> <C> <C> <C>
Imagination Carnival Cruise Lines 6/95 Finnish Markka 2,040 $330
Inspiration Carnival Cruise Lines 3/96 U. S. Dollar 2,040 270
Veendam Holland America Line 6/96 Italian Lira 1,266 225
Destiny Carnival Cruise Lines 9/96 Italian Lira 2,640 400
To Be Named Holland America Line 9/97 Italian Lira 1,320 235
To Be Named Carnival Cruise Lines 2/98 U. S. Dollar 2,040 300
To Be Named Carnival Cruise Lines 11/98 U. S. Dollar 2,040 300
To Be Named Carnival Cruise Lines 12/98 Italian Lira 2,640 415
16,026 $2,475
</TABLE>
Contracts denominated in foreign currencies have been fixed into U.S.
Dollars through the utilization of forward currency contracts. In connection
with the vessels under contract for construction described above, the Company
has paid $239 million through May 31, 1995 and anticipates paying $574 million
during the twelve month period ended May 31, 1996 and approximately $1.7
billion beyond May 31, 1996. The Imagination was delivered in June 1995 and
began service July 1, 1995.
Litigation
In the normal course of business, various claims and lawsuits have been
filed or are pending against the Company. The majority of these claims and
lawsuits are covered by insurance. Management believes the outcome of any
such suits which are not covered by insurance would not have a material
adverse effect on the Company's financial condition or results of operations.
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
The Company earns its revenues primarily from (i) the sale of passenger
tickets, which includes accommodations, meals, airfare and substantially all
shipboard activities, and (ii) the sale of goods and services on board its
cruise ships, such as casino gaming, liquor sales, gift shop sales and other
related services. Collectively, such revenues are referred to herein as
"Cruise revenues". The Company also derives revenues from tour operations
("Tour revenues").
The following table presents selected segment and statistical information
for the periods indicated:
<TABLE>
<CAPTION>
Six Months Ended May 31, Three Months Ended May 31,
1995 1994 1995 1994
(in thousands)
<S> <C> <C> <C> <C>
REVENUES:
Cruise $838,607 $762,855 $425,962 $384,350
Tour 38,848 37,067 31,557 30,146
Intersegment revenues (4,809) (5,266) (4,693) (5,096)
$872,646 $794,656 $452,826 $409,400
OPERATING EXPENSES:
Cruise $481,318 $444,911 $243,819 $223,363
Tour 36,667 36,473 26,821 27,580
Intersegment expenses (4,809) (5,266) (4,693) (5,096)
$513,176 $476,118 $265,947 $245,847
OPERATING INCOME:
Cruise $185,489 $171,194 $ 98,282 $ 90,002
Tour (12,309) (13,401) (2,014) (4,222)
$173,180 $157,793 $ 96,268 $85,780
SELECTED STATISTICAL INFORMATION:
Passengers Carried 697 632 354 318
Passenger Cruise Days 4,276 3,845 2,169 1,929
Occupancy Percentage 100.1% 100.7% 100.3% 101.2%
</TABLE>
<PAGE>
The following table sets forth statements of operations data expressed as a
percentage of total revenues:
<TABLE>
<CAPTION>
Six Months Three Months
Ended May 31, Ended May 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
REVENUES 100% 100% 100% 100%
COSTS AND EXPENSES:
Operating expenses 59 60 59 60
Selling and administrative 14 14 13 13
Depreciation and amortization 7 6 7 6
OPERATING INCOME 20 20 21 21
OTHER INCOME (EXPENSE) (2) (2) (1) (2)
NET INCOME 18% 18% 20% 19%
</TABLE>
The Company's different businesses experience varying degrees of
seasonality. The Company's revenue from the sale of passenger tickets for
Carnival Cruise Lines' ("Carnival") ships is moderately seasonal.
Historically, demand for Carnival cruises has been greater during the periods
from late December through April and late June through August. Holland
America Line ("HAL") cruise revenues are more seasonal than Carnival's cruise
revenues. Demand for HAL cruises is strongest during the summer months when
HAL ships operate in Alaska. Demand for HAL cruises is lower during the
winter months when HAL ships sail in the more competitive Caribbean market.
The Company's tour revenues are extremely seasonal with a large majority of
tour revenues generated during the late spring and summer months in
conjunction with the Alaska cruise season.
Six Months Ended May 31, 1995 Compared
To Six Months Ended May 31, 1994
Revenues
The increase in total revenues of $78.0 million from the first half of 1994
to the first half of 1995 was comprised primarily of a $75.8 million, or 9.9%,
increase in cruise revenues for the period. The increase in cruise revenues
was primarily the result of a 11.8% increase in capacity for the period
resulting from the addition of HAL's cruise ship Ryndam in October 1994 and
Carnival's Fascination in July 1994. Also affecting cruise revenues were
slightly lower gross passenger per diems and occupancy rates. The gross
passenger per diems decreased primarily due to a reduction in the percentage
of passengers electing the Company's air program. When a passenger elects to
purchase his/her own air transportation, rather than use the Company's air
program, both the Company's cruise revenues and operating expenses decrease by
approximately the same amount. The reduction in occupancy rates reflect
reduced occupancy levels for Holland America Line in the Caribbean partially
offset by increased occupancy levels for Carnival Cruise Lines.
<PAGE>
Passenger cruise days (one passenger sailing for a period of one day is one
passenger day) are expected to increase during the next fiscal quarter as
compared to the same period in 1994 as a result of additional capacity
provided from the delivery of the Fascination in July 1994, the Ryndam in
September 1994, and the Imagination which was delivered in June 1995. Due to
the delivery of the Imagination, the Company's capacity is also expected to
increase for the fourth quarter of fiscal 1995.
In June 1995, a fire, which was quickly extinguished, broke out in the
engine control room on the Celebration. There were no injuries to passengers
or crew, however, there was damage to one of the vessel's electrical control
panels. The time necessary to complete repairs to the Celebration as a result
of this incident will partially offset the capacity increases in the third
quarter of 1995 discussed in the preceding paragraph. Although the evaluation
of the total costs of this incident onboard the Celebration has not been
completed, management believes the impact on earnings in the third quarter of
1995 could approximate up to $14 million or five cents per share.
Revenues from the Company's Tour operations increased $1.8 million, or
4.8%, to $38.8 million in 1995 from $37.1 million in 1994. The increase was
primarily the result of an increase in the transportation revenues generated
by the Gray Line of Alaska tour and motorcoach operations.
Costs and Expenses
Operating expenses increased $37.1 million, or 7.8%, from the first half of
1994 to the first half of 1995. Cruise operating costs increased by $36.4
million, or 8.2%, to $481.3 million in the first half of 1995 from $444.9
million in the first half of 1994, primarily due to additional costs
associated with the increased capacity in the first half of 1995. Tour
operating expenses remained essentially unchanged.
Selling and administrative costs increased $16.2 million, or 15.0%,
primarily due to a 29.6% increase in advertising expenses during the first
half of 1995 as compared with the same period of 1994.
Depreciation and amortization increased by $9.3 million, or 17.7%, to $62.0
million in the first half of 1995 from $52.7 million in the first half of 1994
primarily due to the addition of the Ryndam and the Fascination.
Other Income (Expense)
Total other expense (net of other income) of $15.9 million increased in the
first half of 1995 from $14.9 million in the first half of 1994. Interest
income increased $3.2 million primarily due to the recognition of interest
income related to the sale of Crystal Palace and higher interest rates.
Interest expense increased to $41.5 million in the first half of 1995 from
$34.5 million in the first half of 1994 primarily as a result of increased
debt levels and higher interest rates on variable rate debt. The increased
debt levels were the result of expenditures made in connection with the
ongoing construction and delivery of new cruise ships. Capitalized interest
decreased to $8.1 million in the first half of 1995 from $9.6 million in the
first half of 1994 due to lower levels of investments in vessels under
construction. Other income increased to $5.2 million in the first half of
1995 primarily as a result of a gain on the sale of the Company's entire
interest in Epirotiki Cruise Line and certain other non-related, non-recurring
items.
<PAGE>
Three Months Ended May 31, 1995 Compared
To Three Months Ended May 31, 1994
Revenues
The increase in total revenues of $43.4 million from the second quarter of
1994 to the second quarter of 1995 was comprised primarily of a $41.6 million,
or 10.8%, increase in cruise revenues for the period. The increase in cruise
revenues was primarily the result of a 13.4% increase in capacity for the
period resulting from the addition of HAL's cruise ship Ryndam in October 1994
and Carnival's Fascination in July 1994. Also affecting cruise revenues were
slightly lower gross passenger per diems and occupancy rates. The gross
passenger per diems decreased primarily due to a reduction in the percentage
of passengers electing the Company's air travel. When a passenger elects to
purchase their own air transportation, rather than use the Company's air
program, both the Company's cruise revenues and operating expenses decrease by
approximately the same amount. The lower occupancy rates reflect reduced
occupancy levels for Holland America Line in the Caribbean partially offset by
increased occupancy levels for Carnival Cruise Lines.
Revenues from the Company's Tour operations increased $1.4 million, or
4.7%, to $31.6 million in 1995 from $30.1 million in 1994. The increase was
primarily the result of an increase in the transportation revenues generated
by the Gray Line of Alaska tour and motorcoach operations.
Costs and Expenses
Operating expenses increased $20.1 million, or 8.2%, from the second
quarter of 1994 to the second quarter of 1995. Cruise operating costs
increased by $20.5 million, or 9.2%, to $243.8 million in the second quarter
of 1995 from $223.4 million in the second quarter of 1994, primarily due to
additional costs associated with the increased capacity in the second quarter
of 1995. Tour operating expenses remained essentially unchanged.
Selling and administrative costs increased $8.5 million, or 16.5%,
primarily due to a 37.8% increase in advertising expenses during the second
quarter of 1995 as compared with the same quarter of 1994.
Depreciation and amortization increased by $4.3 million, or 16.5%, to $30.5
million in the second quarter of 1995 from $26.2 million in the second quarter
of 1994 primarily due to the addition of the Ryndam and the Fascination.
Other Income (Expense)
Total other expense (net of other income) of $6.5 million decreased in the
second quarter of 1995 from $7.9 million in the second quarter of 1994.
Interest income increased $3.2 million primarily due to the recognition of
interest income related to notes from the sale of Crystal Palace and increased
interest rates. Interest expense increased to $20.1 million in the second
quarter of 1995 from $17.0 million in the second quarter of 1994 primarily as
a result of increased debt levels and higher interest rates on variable rate
debt. The increased debt levels were the result of expenditures made in
connection with the ongoing construction and delivery of new cruise ships.
Capitalized interest decreased to $4.3 million in the second quarter of 1995
from $5.3 million in the second quarter of 1994 due to lower levels of advance
payments for vessels under construction. Other income increased to $3.8
million in the second quarter of 1995 primarily as a result of a gain on the
sale of the Company's entire interest in Epirotiki Cruise Line and certain
other non-related, non-recurring items.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Sources and Uses of Cash
The Company's business provided $311.2 million of net cash from operations
during the six months ended May 31, 1995, an increase of 7.4% compared to the
corresponding period in 1994. The increase between periods was primarily the
result of an increase in net income and advance customer deposits.
During the six months ended May 31, 1995, the Company made cash
expenditures of approximately $75.9 million on capital projects of which $23
million was spent on the purchase of the Company's existing corporate
headquarters facility located in Miami, Florida and $32 million was spent in
connection with its ongoing shipbuilding program. The remainder was spent on
vessel refurbishments, tour assets and other equipment.
In April 1995, the Company received $47 million of net proceeds from the
sale of 2.1 million shares of Class A Common Stock by the Company pursuant to
the underwriters exercise of an overallotment option in a secondary offering
by certain shareholders of the Company. Also, in May 1995, the Company issued
$100 million of 7.05% Notes Due May 15, 2005 and received approximately $99.2
million in cash proceeds net of underwriting fees and other costs, which was
used as described below.
The Company also made scheduled principal payments totalling approximately
$39.7 million under various individual vessel mortgage loans and repaid the
outstanding balance on the $750 million revolving credit facility due 1999
(the "$750 Million Revolving Credit Facility") during the six months ended May
31, 1995.
During the six months ended May 31, 1995, the Company declared and paid
cash dividends of approximately $42.5 million.
In June 1995 the Company took delivery of the Imagination. The Company
paid $235 million in cash, $100 million was provided from the 7.05% Notes Due
May 15, 2005, $101 million was drawn from the Company's $750 million Revolving
Credit Facility, and the remaining $34 million was provided from the Company's
treasury.
Future Commitments
Excluding the Imagination, which was delivered in June 1995, the Company
has contracts for the delivery of seven new vessels over the next four years.
The Company will pay approximately $340 million, during the twelve month
period ending May 31, 1996 relating to the construction and delivery of those
new cruise ships and approximately $1.7 billion beyond May 31 , 1996. See
Note 5 in the accompanying financial statements for more information related
to commitments for the construction of cruise ships. In addition, the
Company has $1.1 billion of long-term debt and convertible notes of which $79
million is due during the twelve month period ending May 31, 1996. See Note 3
in the accompanying financial statements for more information regarding the
Company's debt.
<PAGE>
Funding Sources
Cash from operations is expected to be the Company's principal source of
capital to fund its debt service requirements and ship construction costs. In
addition, the Company may fund a portion of the construction cost of new ships
from borrowings under the $750 Million Revolving Credit Facility and/or
through the issuance of long-term debt in the public or private markets. One
of the Company's subsidiaries also has a $25 million line of credit. Following
the borrowing of the final $101 million payment for the Imagination in June
1995, $649 million was available for borrowing by the Company under the $750
Million Revolving Credit Facility.
To the extent that the Company should require or choose to fund future
capital commitments from sources other than operating cash or from borrowings
under the $750 Million Revolving Credit Facility, the Company believes that it
will be able to secure such financing from banks or through the offering of
debt and/or equity securities in the public or private markets. In this
regard, the Company has filed two Registration Statements on Form S-3 (the
"Shelf Registration") relating to a shelf offering of up to $500 million
aggregate principal amount of debt or equity securities. Through May 1995,
the Company has issued $100 million of unsecured notes due July 2004 bearing
interest at 7.7% per annum, $30 million of five to ten-year notes bearing
interest at rates ranging from 5.95% to 7% per annum, and $100 million of
unsecured notes due May 15, 2005 bearing interest at 7.05% per annum. A
balance of $270 million aggregate principal amount of debt or equity
securities remains available for issuance under the Shelf Registration.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In 1986 a lawsuit was filed in Federal District Court by the American
Association of Cruise Passengers ("AACP") against the Company, Holland America
Line-Westours, Inc., ten other cruise lines, the Cruise Lines Int'l
Association ("CLIA"), and an association of travel agents seeking treble and
punitive damages, alleging violation of federal and state antitrust laws and
interference with business expectancies under state common law. The amount of
damages sought is not specified in the complaint and has not been revealed in
discovery to date. AACP has asserted that the defendants have agreed with
each other to boycott AACP because of AACP's practice of rebating travel
agency commissions to passengers and advertising discounts on such cruise
lines' advertised fares. In March 1995, the Federal District Court dismissed
this suit for the second time against both Carnival Cruise Lines and Holland
America Line on jurisdictional grounds. Plaintiff may appeal again or file
its claim in state court. In either case, the Company will vigorously oppose.
The Company does not believe that the outcome of this lawsuit will have a
material adverse affect on the Company's financial condition or results of
operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of shareholders of the Company was held on April 17,
1995 (the "Annual Meeting"). Holders of Class A Common Stock were entitled to
elect four of the thirteen directors to be elected at the Annual Meeting and
the holders of Class B Common Stock were entitled to elect the remaining nine
directors. On all other matters which came before the Annual Meeting, holders
of Class A Common Stock were entitled to one vote for each share held and
holders of Class B Common Stock were entitled to five votes for each share
held. Proxies for (i) 197,484,242 shares of the 227,657,502 shares of Class A
Common Stock entitled to vote and (ii) 54,957,142 shares of the 54,957,142
shares of Class B Common Stock entitled to vote, were received in connection
with the annual meeting.
The following table sets forth the names of the four persons elected at the
Annual Meeting to serve as Class A Directors until the next annual meeting
of shareholders of the Company and the number of votes cast for, against or
withheld with respect to each person.
<TABLE>
<CAPTION>
CLASS A DIRECTORS FOR AGAINST WITHHELD
<S> <C> <C> <C>
William S. Ruben 197,255,773 -0- 228,469
Stuart S. Subotnick 197,257,756 -0- 226,486
Sherwood M. Weiser 197,071,949 -0- 412,293
Uzi Zucker 197,073,156 -0- 411,086
</TABLE>
The following nine persons were elected to serve as Class B Directors by
the unanimous vote of the 54,957,142 shares of Class B Common Stock voted at
the Annual Meeting: Micky Arison, Maks L. Birnbach, Robert H. Dickinson,
Howard S. Frank, A. Kirk Lanterman, Harvey Levinson, Meshulam Zonis, Richard
G. Capen, Jr. and Modesto Maidique.
<PAGE>
The following table sets forth certain additional matters which were
submitted to the shareholders for approval at the Annual Meeting and the
tabulation of the votes of the shares of Class A Common Stock with respect to
each such matter. All of the shares of Class B Common Stock voted at the
Annual Meeting were cast in favor of each of the additional matters.
<TABLE>
<CAPTION>
MATTER FOR AGAINST WITHHELD
<S> <C> <C> <C>
Approval of an amendment
to the Amended and Restated
Articles of Incorporation
of the Company. 1/ 437,285,971 21,714,440 3,037,594
Approval of the amendments
to the Carnival Cruise
Lines 1992 Stock Option
Plan. 2/ 456,681,433 12,596,908 2,991,511
Ratification of Accountants. 3/ 469,423,537 71,546 2,774,769
</TABLE>
1. The Amended and Restated Articles of Incorporation were amended to clarify
the ability of the Company to sell less than all or less than substantially
all of the assets of the Company without shareholder approval.
2. The Carnival Cruise Lines 1992 Stock Option Plan was amended to (i)
increase the maximum number of shares that may be made subject to options
under the plan from 1,500,000 to 4,000,000, (ii) to provide that the maximum
number of shares with respect to which options may be granted to any
individual in any calendar year during the term of the plan cannot exceed
1,000,000 shares of Class A Common Stock and (iii) to modify the class of
persons who may serve on the Plan Administration Committee.
3. The shareholders approved the selection of Price Waterhouse LLP as the
independent accountants of the Company.
______________
On June 28, 1995, a special meeting of the holders of Class B Common Stock
was held. At this meeting, Harvey Levinson was removed as a Class B Director
by a unanimous vote of the 54,957,142 shares of Class B Common Stock voted at
the meeting. Shari Arison Dorsman was elected to fill the vacancy created by
Mr. Levinson's removal by a unanimous vote of the 54,957,142 Class B Common
Stock voted at the meeting.
<PAGE>
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<S> <C>
(a) Exhibits
4.1 Agreement of the Company dated July 12, 1995 to furnish
certain debt instruments to the Securities and Exchange
Commission
11 Statement regarding computation of per share earnings
12 Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
(b) Reports on Form 8-K
Current report on Form 8-K (File No. 1-9610) filed with the
Commission on April 12, 1995 related to filing a press release.
Report on Form 8-K (File No. 1-9610) filed with the Commission on
May 26, 1995 in connection with the issuance of the $100 Million Notes Due
May 15, 2005.
</TABLE>
<PAGE>
SIGNATURE
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.
CARNIVAL CORPORATION
Dated: July 12, 1995 BY /s/ Micky Arison
Micky Arison
Chairman of the Board and Chief
Executive Officer
Dated: July 12, 1995 BY /s/ Howard S. Frank
Howard S. Frank
Vice-Chairman, Chief Financial and
Accounting Officer
PAGE
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Page No. in
Sequential
Numbering
System
<S> <C>
Exhibits
4.1 Agreement of the Company dated July 12, 1995 to furnish
certain debt instruments to the Securities and Exchange
Commission
11 Statement regarding computation of per share earnings
12 Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
</TABLE>
<PAGE>
<PAGE>
EXHIBIT 4.1
July 12, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, DC 20549
RE: Carnival Corporation
Commission File No. 1-9610
Gentlemen:
Pursuant to Item 601(b)(4)(iii) of Regulation S-K promulgated under the
Securities Exchange Act of 1934, as amended, Carnival Corporation (the
"Company") hereby agrees to furnish copies of certain long-term debt
instruments to the Securities and Exchange Commission upon the request of the
Commission, and , in accordance with such regulation, such instruments are not
being filed as part of the Annual Report on Form 10-K of the Company for its
fiscal year ended November 30, 1994 or 1995.
Very Truly Yours,
CARNIVAL CORPORATION
Arnaldo Perez
Acting General Counsel
<PAGE>
EXHIBIT 11
CARNIVAL CORPORATION
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
(in thousands, except per share data)
<TABLE>
<CAPTION>
Six Months Three Months
Ended May 31, Ended May 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net income $157,321 $142,937 $ 89,769 $77,886
Adjustments to net income for
the purpose of computing fully
diluted earnings per share:
Interest reduction from
assumed conversion of 4.5%
Convertible Subordinated
Notes 2,770 2,770 1,385 1,385
Adjusted net income $160,091 $145,707 $ 91,154 $ 79,271
Weighted average shares
outstanding 283,356 282,672 283,886 282,670
Adjustments to weighted
average shares outstanding for the
purpose of computing fully diluted
earnings per share:
Additional shares issuable upon
assumed conversion of 4.5%
Convertible Subordinated Notes 6,618 6,618 6,618 6,618
Adjusted weighted average
shares outstanding 289,974 289,290 290,504 289,288
Earnings per share:
Primary $.56 $.51 $.32 $.28
Fully Diluted* $.55 $.50 $.31 $.27
</TABLE>
*In accordance with Accounting Principles Board Opinion No. 15, the Company
does not present fully diluted EPS in its financial statements because the
Company's convertible securities are anti-dilutive or result in a less than 3%
dilution for the periods presented.
<PAGE>
EXHIBIT 12
CARNIVAL CORPORATION
RATIO OF EARNINGS TO FIXED CHARGES
(in thousands, except ratios)
<TABLE>
<CAPTION>
Six Months Ended May 31,
1995 1994
<S> <C> <C>
Net Income $157,321 $142,937
Income tax benefit (5,361) (6,206)
Income before income tax benefit 151,960 136,731
Fixed Charges:
Interest expense, net 33,315 24,846
Interest portion of rental expense (1) 841 1,186
Capitalized interest 8,149 9,608
Total Fixed Charges 42,305 35,640
Fixed Charges Not Currently Affecting Income:
Capitalized interest 8,149 9,608
Earnings before fixed charges $186,116 $162,763
Ratio of earnings to fixed charges 4.4x 4.6x
</TABLE>
________________________
(1) Represents one-third of rental expense, which Company management believes
to be representative of the interest portion of rental expense.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> MAY-31-1995
<CASH> 141,511
<SECURITIES> 64,251
<RECEIVABLES> 32,078
<ALLOWANCES> 0
<INVENTORY> 48,910
<CURRENT-ASSETS> 367,155
<PP&E> 3,676,198
<DEPRECIATION> 587,225
<TOTAL-ASSETS> 3,798,638
<CURRENT-LIABILITIES> 692,844
<BONDS> 996,941
<COMMON> 2,848
0
0
<OTHER-SE> 2,091,331
<TOTAL-LIABILITY-AND-EQUITY> 3,798,638
<SALES> 0
<TOTAL-REVENUES> 872,646
<CGS> 0
<TOTAL-COSTS> 513,176
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 41,464
<INCOME-PRETAX> 151,960
<INCOME-TAX> 5,361
<INCOME-CONTINUING> 157,321
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 157,321
<EPS-PRIMARY> .56
<EPS-DILUTED> .55
<PAGE>
<PAGE>
</TABLE>
