<PAGE> 1
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 FEBRUARY 28, 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 March 17, 1995.
CLASS A COMMON STOCK, $.01 PAR VALUE: 227,658,902 SHARES
---------------------------------------------------------
CLASS B COMMON STOCK, $.01 PAR VALUE: 54,957,142 SHARES
-----------------------------------------------------------
<PAGE> 2
CARNIVAL CORPORATION
I N D E X
---------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1: Financial Statements
Consolidated Balance Sheets -
February 28, 1995 and November 30, 1994 1
Consolidated Statements of Operations -
Three Months Ended February 28, 1995
and February 28, 1994 2
Consolidated Statements of Cash Flows -
Three Months Ended February 28, 1995
and February 28, 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 10
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
CARNIVAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
<TABLE>
<CAPTION>
February 28, November 30,
ASSETS 1995 1994
---- ----
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 49,710 $ 54,105
Short-term investments 63,920 70,115
Accounts receivable 28,440 20,789
Consumable inventories, at average cost 45,771 45,122
Prepaid expenses and other 61,980 50,318
------------- -------------
Total current assets 249,821 240,449
PROPERTY AND EQUIPMENT--at cost, less
accumulated depreciation and amortization 3,095,674 3,071,431
OTHER ASSETS
Goodwill, less accumulated amortization of $43,055 in
1995 and $41,310 in 1994 231,808 233,553
Long-term notes receivable 77,223 76,876
Investments in affiliates and other assets 49,499 47,514
------------- -------------
$3,704,025 $3,669,823
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 87,186 $ 84,644
Accounts payable 85,173 86,750
Accrued liabilities 108,621 114,868
Customer deposits 281,702 257,505
Dividends payable 21,196 21,190
------------- -------------
Total current liabilities 583,878 564,957
------------- -------------
LONG-TERM DEBT 1,013,365 1,046,904
CONVERTIBLE NOTES 115,000 115,000
OTHER LONG-TERM LIABILITIES 14,023 14,028
COMMITMENTS AND CONTINGENCIES (NOTE 5)
SHAREHOLDERS' EQUITY
Class A Common Stock; $.01 par value; one vote per share;
399,500 shares authorized; 227,658 and 227,575 shares
issued and outstanding 2,277 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 546,464 544,947
Retained earnings 1,436,945 1,390,589
Less-other (8,477) (9,428)
------------- -------------
Total shareholders' equity 1,977,759 1,928,934
------------- -------------
$3,704,025 $3,669,823
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE> 4
CARNIVAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended February 28,
--------------------------------
1995 1994
---- ----
<S> <C> <C>
REVENUES $419,820 $385,256
COSTS AND EXPENSES
Operating expenses 247,229 230,271
Selling and administrative 64,175 56,476
Depreciation and amortization 31,504 26,496
---------- ----------
342,908 313,243
---------- ----------
OPERATING INCOME 76,912 72,013
---------- ----------
OTHER INCOME (EXPENSE)
Interest income 1,999 1,989
Interest expense, net of capitalized interest (17,551) (13,137)
Other income (expense) 1,362 (99)
Income tax benefit 4,830 4,285
---------- ----------
(9,360) (6,962)
---------- ----------
NET INCOME $ 67,552 $ 65,051
========== ==========
EARNINGS PER SHARE $.24 $.23
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 5
CARNIVAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended February 28,
-------------------------------
1995 1994
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 67,552 $ 65,051
ADJUSTMENTS:
Depreciation and amortization 31,504 26,496
Other 2,009 6,567
CHANGES IN OPERATING ASSETS AND LIABILITIES:
Increase in receivables (7,854) (5,293)
Increase in consumable inventories (649) (1,441)
Increase in prepaid and other (11,662) (4,888)
(Decrease) increase in accounts payable (1,577) 7,902
Decrease in accrued liabilities (6,247) (6,099)
Increase in customer deposits 24,197 26,854
--------- ---------
Net cash provided from operations 97,273 115,149
--------- ---------
INVESTING ACTIVITIES:
Decrease in short-term investments 6,195 2,760
Additions to property and equipment, net (54,002) (80,690)
(Increase) decrease in other non-current assets (2,332) 1,674
--------- ---------
Net cash used for investing activities
(50,139) (76,256)
--------- ---------
FINANCING ACTIVITIES:
Principal payments of long-term debt (67,003) (49,919)
Dividends paid (21,190) (19,764)
Proceeds from long-term debt 36,000 10,012
Issuance of common stock 664 946
--------- ---------
Net cash used for financing activities (51,529) (58,725)
--------- ---------
Net decrease in cash and cash equivalents (4,395) (19,832)
Cash and cash equivalents at beginning of period 54,105 60,243
--------- ---------
Cash and cash equivalents at end of period $ 49,710 $ 40,411
========= =========
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Interest (net of amount capitalized) $ 11,801 $ 8,440
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 6
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 February 28, 1995, the
consolidated statements of operations and cash flows for the three months ended
February 28, 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, 1995, 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 have been
retroactively adjusted for this stock split.
NOTE 2 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
<TABLE>
<CAPTION>
FEBRUARY 28, NOVEMBER 30,
------------ ------------
1995 1994
---- ----
(in thousands)
<S> <C> <C>
Vessels $3,150,285 $3,147,026
Vessels under construction 227,717 207,128
----------- -----------
3,378,002 3,354,154
Land, buildings and improvements 121,693 95,294
Transportation and other equipment 156,203 152,649
----------- -----------
Total property and equipment 3,655,898 3,602,097
Less - accumulated depreciation and amortization (560,224) (530,666)
----------- -----------
$3,095,674 $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 $3.8 million
and $4.3 million for the three months ended February 28, 1995 and February 28,
1994, respectively.
4
<PAGE> 7
NOTE 3 - LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
FEBRUARY 28, NOVEMBER 30,
----------- -----------
1995 1994
---- ----
(in thousands)
<S> <C>
Mortgages and other loans payable bearing interest at rates ranging
from 8% to 9.9%, secured by vessels, maturing through 1999 $ 271,825 $ 287,642
Unsecured Revolving Credit Facility Due 1999 215,000 238,000
Unsecured 5.75% Notes Due March 15, 1998 200,000 200,000
Unsecured 6.15% Notes Due October 1, 2003 124,941 124,939
Unsecured 7.20% Debentures Due October 1, 2023 124,863 124,862
Unsecured 7.70% Notes Due July 15, 2004 99,893 99,890
Unsecured Medium Term Notes bearing interest at rates ranging
from 5.95% to 7.0%, due from 1999 to 2004 30,000 30,000
Other loans payable 34,029 26,215
------------- -------------
1,100,551 1,131,548
Less portion due within one year (87,186) (84,644)
------------- -------------
$1,013,365 $1,046,904
========== ==========
</TABLE>
Property and equipment with a net book value of $997 million at February
28, 1995 is pledged as collateral against the mortgage indebtedness.
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
February 28, 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 three months ended February 28, 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 67,552 67,552
Cash dividends (21,196) (21,196)
Changes in securities valuation
allowance 514 514
Issuance of stock to employees
under stock plans 1 1,517 1,518
Vested portion of common
stock under restricted stock plan 437 437
------ ---- -------- ---------- ------- ----------
BALANCE, FEBRUARY 28, 1995 $2,277 $550 $546,464 $1,436,945 $(8,477) $1,977,759
====== ==== ======== ========== ======= ==========
</TABLE>
5
<PAGE> 8
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 $228 million through February 28, 1995 and anticipates paying $374
million during the twelve month period ended February 29, 1996 and
approximately $1.8 billion beyond February 29, 1996.
LITIGATION
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. and ten other cruise lines 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.
In the normal course of business, various other 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.
6
<PAGE> 9
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>
THREE MONTHS ENDED FEBRUARY 28,
-------------------------------
1995 1994
---- ----
(in thousands)
<S> <C> <C>
REVENUES:
Cruise $ 412,645 $ 378,505
Tour 7,291 6,921
Intersegment revenues (116) (170)
--------- ---------
$ 419,820 $ 385,256
========= =========
OPERATING EXPENSES:
Cruise $ 237,499 $ 221,548
Tour 9,846 8,893
Intersegment expenses (116) (170)
--------- ---------
$ 247,229 $ 230,271
========= =========
OPERATING INCOME:
Cruise $ 87,207 $ 81,192
Tour (10,295) (9,179)
--------- ---------
$ 76,912 $ 72,013
--------- ---------
SELECTED STATISTICAL INFORMATION:
Passengers Carried 343 315
Passenger Cruise Days 2,107 1,916
Occupancy Percentage 99.9% 100.2%
</TABLE>
The following table sets forth statements of operations data expressed as a
percentage of total revenues:
<TABLE>
<CAPTION>
THREE MONTHS ENDED FEBRUARY 28,
-------------------------------
1995 1994
---- ----
<S> <C> <C> <C>
REVENUES 100% 100%
--- ---
COSTS AND EXPENSES:
Operating expenses 59 60
Selling and administrative 15 14
Depreciation and amortization 8 7
--- ---
OPERATING INCOME 18 19
OTHER INCOME (EXPENSE) (2) (2)
--- ---
NET INCOME 16% 17%
=== ===
</TABLE>
7
<PAGE> 10
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.
THREE MONTHS ENDED FEBRUARY 28, 1995 COMPARED
TO THREE MONTHS ENDED FEBRUARY 28, 1994
REVENUES
The increase in total revenues of $34.6 million from the first quarter of
1994 to the first quarter of 1995 was comprised primarily of a $34.1 million,
or 9.0%, increase in cruise revenues for the period. The increase in cruise
revenues was primarily the result of a 10.3% 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 yields and occupancy rates. The reduced
occupancy rates reflect lower occupancy levels for Holland America Line in the
Caribbean partially offset by higher occupancy levels for Carnival Cruise
Lines.
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 and the Ryndam in September
1994. With the delivery of the Imagination in June 1995, the Company's
capacity will also increase for the second half of 1995.
COSTS AND EXPENSES
Operating expenses increased $17.0 million, or 7.4%, from the first quarter
of 1994 to the first quarter of 1995. Cruise operating costs increased by
$16.0 million, or 7.2%, to $237.5 million in the first quarter of 1995 from
$221.5 million in the first quarter of 1994, primarily due to additional costs
associated with the increased capacity in the first quarter of 1995. Tour
operating expenses increased $1.0 million, or 10.7%, from the first quarter of
1994 to the first quarter of 1995 primarily due to an increase in operating
costs in the transportation division.
Selling and administrative costs increased $7.7 million, or 13.6%,
primarily due to a 23% increase in advertising expenses during the first
quarter of 1995 as compared with the same quarter of 1994.
Depreciation and amortization increased by $5.0 million, or 18.9%, to
$31.5 million in the first quarter of 1995 from $26.5 million in the first
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 $9.4 million increased in the
first quarter of 1995 from $7.0 million in the first quarter of 1994. Interest
income remained essentially unchanged. Interest expense increased to $21.4
million in the first quarter of 1995 from $17.4 million in the first quarter of
1994 as a result of increased debt levels and higher interest rates on floating
rate debt. The higher debt levels were the result of expenditures made in
connection with the ongoing construction of cruise ships. Capitalized interest
decreased to $3.8 million in the first quarter of 1995 from $4.3 million in the
first quarter of 1994 due to lower levels of investments in vessels under
construction. Other income increased to $1.4 million in the first quarter of
1995 as a result of a gain received from an investment.
8
<PAGE> 11
LIQUIDITY AND CAPITAL RESOURCES
SOURCES AND USES OF CASH
The Company's business provided $97.3 million of net cash from operations
during the three months ended February 28, 1995, a decrease of 15.5% compared
to the corresponding period in 1994. The decrease between periods was
primarily the result of timing differences in cash receipts and payments
related to operating assets and liabilities.
During the three months ended February 28, 1995, the Company made cash
expenditures of approximately $54 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 $21 million was spent in
connection with its ongoing shipbuilding program. The remainder was spent on
vessel refurbishments, tour assets and other equipment.
The Company also made scheduled principal payments totalling approximately
$16 million under various individual vessel mortgage loans and a net repayment
of $23 million on the $750 million revolving credit facility due 1999 (the
"$750 Million Revolving Credit Facility") during the three months ended
February 28, 1995.
During the three months ended February 28, 1995, the Company declared and
paid cash dividends of approximately $21 million.
FUTURE COMMITMENTS
The Company has contracted to take delivery of eight new vessels over the
next five years. The Imagination is scheduled for delivery in fiscal 1995.
The Company will pay approximately $374 million during the twelve month period
ending February 29, 1996 relating to the construction of cruise ships and
approximately $1.8 billion beyond February 29, 1996. See Note 5 in the
accompanying financial statements for more information related to commitments
for the construction of cruise ships. The Company is currently expanding its
existing corporate headquarters to accommodate growth in its Carnival Cruise
Lines product at an estimated cost of approximately $33 million. In addition,
the Company has $1.1 billion of long-term debt of which $87 million is due
during the twelve month period ending February 29, 1996. See Note 3 in the
accompanying financial statements for more information regarding the Company's
debt.
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. At February 28,
1995, approximately $535 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. In July 1994, the
Company issued $100 million of unsecured notes due July 2004 bearing interest
at 7.7% per annum under the Shelf Registration. The Company has also commenced
an ongoing $100 million medium term note program under the Shelf Registration
pursuant to which the Company may from time to time issue notes with
maturities from nine months to 50 years from the date of issue. Under the
medium term note program, the Company has issued $30 million of five to
ten-year notes bearing interest at rates ranging from 5.95% to 7% per annum. A
balance of $370 million aggregate principal amount of debt or equity securities
remains available for issuance under the Shelf Registration.
9
<PAGE> 12
PART II. OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<S> <C>
(a) Exhibits
4.1 Amended and Restated Articles of Incorporation of the Company.
11 Statement regarding computation of per share earnings.
12 Ratio of Earnings to Fixed Charges
27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
None
</TABLE>
10
<PAGE> 13
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: March 23, 1995 BY /s/ Micky Arison
-------------------------------------------
Micky Arison
Chairman of the Board and Chief
Executive Officer
Dated: March 23, 1995 BY /s/ Howard S. Frank
-------------------------------------------
Howard S. Frank
Vice-Chairman , Chief Financial and
Accounting Officer
11
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Page No. in
Sequential
Numbering
System
------
<S> <C>
Exhibits
--------
4.1 Amended and Restated Articles of Incorporation of the Company.
11 Statement regarding computation of per share earnings.
12 Ratio of Earnings to Fixed Charges
27 Financial Data Schedule (for SEC use only)
</TABLE>
<PAGE> 1
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
CARNIVAL CORPORATION
__________________________
A corporation duly organized under the Corporation
Law of the Republic of Panama (Law 32 of 1927).
__________________________
As Amended on April 20, 1994
__________________________
The Articles of Incorporation of Carnival Corporation originally filed on
November 14, 1974, are hereby amended and restated, as approved by the
shareholders of the Corporation.
1. Name. The name of the Corporation is: CARNIVAL CORPORATION
2. Purposes. The purposes of the Corporation are:
(a) To make, purchase, barter, charter, acquire dominion upon or
use of, operate as owner, charterer or operator, to manage, equip and fit out
all kinds of ships and vessels of all types and kinds and propelling systems.
(b) To make all kinds of buildings and structures related to any
kind of legitimate maritime commercial business, merchandise warehousing,
shipping and transportation.
(c) To act as shipbroker, customs and maritime insurance
brokers, and to administer the properties and assets and investments that
maritime trade and shipowners' business and ship exploitation may require.
(d) To act as principal and agent in all negotiations related to
maritime trade to such extent as the purposes of this Corporation may permit
it.
(e) To solicit from the Government of the Republic of Panama
<PAGE> 2
or any other government where it may be necessary and through such proceedings
as may be required by law, patents for registration of ships and permits to
enroll crewmen for, and port clearance of the ships in care of the Corporation.
(f) To perform transactions through negotiable instruments and real
estate related to maritime trade and shipowner' business and exploitation of
ships.
(g) To deal in patents and improvements on patented methods related
to the business of maritime trade.
(h) To purchase and sell and deal in general with the shares of its
own capital stock pursuant to instructions from the Board of Directors. To
acquire, purchase, guarantee, hold, sell, assign, transfer, mortgage, pledge
or otherwise dispose of, deal in shares of the capital stock of, or bonds,
securities or other certificates of indebtedness created by other corporations.
(i) To purchase, sell, lease, mortgage, set up easements and
encumbrances upon real estate and in general upon all kinds of properties
related to the business of the Corporation.
(j) To sell, mortgage, encumber or otherwise charge its assets and
to perform any and all kinds of legitimate commercial transactions and any
other that may be permitted in the future pursuant to Panamanian laws.
(k) To borrow money from any persons, firms, banks or corporations
as may be necessary for its business and to guarantee such loans as the law may
permit and to loan money secured or unsecured to any persons, firms or
corporations as the law may permit and in general to engage in any legitimate
commercial undertaking in any country.
(l) To engage in the general business of travel and tour services,
both domestic and foreign; to dispense travel and tour information and to act
as agent for all transportation companies, including without limitation,
airline companies, passenger cruise line companies, steamship companies,
railroad companies, bus companies, car rental companies and any other mode of
travel or transportation or touring companies, both local and foreign; to
2
<PAGE> 3
engage in the preparation of travel and tour itineraries, including without
limitation hotel and motel accommodations and sightseeing; and, in general, to
engage in the business of all forms and types of travel services.
(m) To dispense travel and tour counseling services, sell railroad,
airline, passenger cruise line, steamship and bus transportation; to sell
accommodations for hotels, resorts, sightseeing and feature attractions
throughout the United States, Canada, Mexico, Europe and every country
throughout the world; to create, plan, sell and carry through escorted vacation
tours; to own, operate, lease or otherwise acquire such real and personal
property suitable, useful or necessary in connection with any of the objects
aforementioned; to enter into, make, perform and carry out contracts of every
kind in connection with the sale and distribution of the aforementioned items
or services; to acquire, use, own, lease and dispose of trademarks, copyrights
and licenses.
(n) To acquire, hold, use, sell, assign, lease, grant licenses in
respect of, mortgage or otherwise dispose of letters patent of the United
States or any foreign country, patent rights, licenses and privileges,
inventions, improvements and processes, copyrights, trademarks, service marks
and trade names relating or useful in connection with any business of this
Corporation.
(o) To carry on the business of hotel, resort, casino, restaurant,
refreshment room and lodging-housekeeper, caterers for public amusements
generally, hairdressers, barbers, perfumers, proprietors, laundries, reading,
writing and newspaper room, libraries, places of amusement, recreation and
entertainment of all kinds, sport, theatrical and musical box office
proprietors, entrepreneurs and general agents, and any other business which can
be conveniently carried on in connection therewith.
(p) Generally to engage in, carry on and conduct any lawful act or
activity for which corporations may be organized under the Corporation Law of
the Republic of Panama.
The foregoing clauses shall be construed both as objects and powers, and
it is hereby expressly provided that the foregoing
3
<PAGE> 4
enumeration of specific powers shall not be held to limit or restrict in any
manner the powers of the Corporation, and are in furtherance of, and in
addition to, and not in limitation of the general powers conferred by the laws
of the Republic of Panama.
3. Number and Classes of Shares.
(a) The capital of the Corporation is Five Million United States
dollars (U.S. $5,000,000) divided as follows:
(1) Three Million Nine Hundred Ninety-Five Thousand United
States dollars (U.S. $3,995,000) divided into Three Hundred Ninety-Nine Million
Five Hundred Thousand (399,500,000) shares of Class A Common Stock of a par
value of one cent (U.S. $.01) each; and
(2) One Million Five Thousand United States dollars (U.S.
$1,005,000) divided into One Hundred Million Five Hundred Thousand
(100,500,000) shares of Class B Common Stock of a par value on one cent (U.S.
$.01) each. Upon filing of these Amended and Restated Articles of
Incorporation, each issued share of stock of the Corporation of a par value of
one United States dollar (U.S. $1.00) shall, without any further action on the
part of the holders thereof, be reclassified as and changed into 2,747.8571
shares of Class B Common Stock.
(b) Class A Common Stock and Class B Common Stock shall be identical
in all respects and shall have equal rights and privileges, except as otherwise
provided in this Article.
The relative rights, preferences, privileges and restrictions of each
class of commons stock are as follows:
(1) Voting.
(i) With respect to the election of directors, holders of Class
A Common Stock shall vote as a separate class and be entitled to elect 25% of
the authorized number of directors (the "Class A Directors") and, if such 25%
is not a whole number, then the holders of Class A Common Stock shall be
entitled to elect the nearest higher whole number of directors that is at least
25% of the total number of directors. Holders of Class B Common Stock, voting
as a separate class, shall be entitled to elect the
4
<PAGE> 5
remaining directors (the "Class B Directors").
If, on the record date for any stockholder meeting at which directors are
to be elected, the number of outstanding shares of Class B Common Stock is less
than 12-1/2% of the total number of outstanding shares of common stock, then
the holders of Class A Common Stock will continue to elect a number of Class A
Directors equal to 25% of the total number of directors constituting the whole
Board of Directors and, in addition, will vote together with the holders of
Class B Common Stock to elect the remaining directors to be elected at such
meeting, with the holders of Class A Common Stock entitled to one (1) vote per
share and the holders of Class B Common Stock entitled to five (5) votes per
shares.
(ii) Any vacancy in the office of a Class A Director may be
filled by a vote of the holders of the Class A Common Stock, voting as a
separate class, and any vacancy in the office of a Class B Director may be
filled by a vote of the holders of the Class B Common Stock, voting as a
separate class or, in the absence of a stockholder vote, in the case of a
vacancy in the office of a director elected by either class, such vacancy may
be filled by the remaining directors of such class, or, if there are no such
directors, such vacancy may be filled by the remaining directors.
Notwithstanding the foregoing, if at the time of a vacancy in the office of a
Class B Director the holders of Class B Common Stock would not be entitled to
elect directors, voting as a separate class, pursuant to subparagraph (1)(ii),
the holders of Class A Common Stock and Class B Common Stock, voting together,
shall instead be entitled to fill such vacancy. Any directors elected by
either class of the Board of Directors to fill a vacancy shall serve until the
next annual meeting of stockholders and until his or her successor has been
elected and has qualified. Should the Board of Directors increase the number
of directors, any vacancy so created may be filled by the Board of Directors,
provided that, so long as the holders of Class A Common Stock have the rights
provided in subparagraphs (1)(i) and (1)(ii) of this Article in respect of the
last preceding annual meeting of stockholders, the
5
<PAGE> 6
Board of Directors may be so enlarged by the Board of Directors only to the
extent that at least 25% of the enlarged board consists of directors elected by
the holders of the Class A Common Stock or by persons appointed to fill
vacancies created by the death, resignation or removal of persons elected by
the holders of the Class A Common Stock. Directors may be removed with or
without cause only by the holders of a majority of the share of the class of
common stock which elected them, or, of such holders of such class of Common
Stock would not be entitled at such time to elect a director to fill a vacancy,
by the holders of common stock who would be so entitled.
(iii) The holders of Class A Common Stock and Class B Common
Stock shall in all matters not specified in sections (i) and (ii) of this
subparagraph (1) vote together as a single class, provided that the holders of
Class A Common Stock shall have one (1) vote per share and the holders of Class
B Common Stock shall have five (5) votes per shares.
(2) Conversion. Each holder of record of Class B Common Stock may
at any time, or from time to time, in such holder's sole discretion and at such
holder's option, convert any whole number of shares or all of such holder's
Class B Common Stock into shares of fully paid and nonassessable Class A Common
Stock at the rate of one share of Class A Common Stock for each share of Class
B Common Stock surrendered for conversion. Any such conversion may be effected
by any holder of Class B Common Stock surrendering such holder's certificate or
certificates for the Class B Common Stock to be converted, duly endorsed, at
the office of the Corporation or any transfer agent for the Class B Common
Stock, together with a written notice to the Corporation at such office that
such holder elects to convert all or a specified number of shares of Class B
Common Stock and stating the name or names in which such holder desires the
certificate or certificates for such Class A Common Stock to be issued.
Promptly thereafter, the Corporation shall issue and deliver to such holder or
such holder's nominee or nominees, a certificate or certificates for the number
of shares of
6
<PAGE> 7
Class A Common Stock to which such holder shall be entitled as aforesaid. Such
conversion shall be deemed to have been made at the close of business on the
date of such surrender and the person or persons entitled to receive the Class
A Common Stock issuable on such conversion shall be treated for all purposes as
the record holder or holders of such Class A Common Stock on that date.
(3) Dividends. Prior to the date shares of Class A Common stock are
first issued in an underwritten public offering (the "IPO Date"), the Board of
Directors shall have the power to fix the relative rights and the terms of any
dividends or distributions on the Class A Common Stock and the Class B Common
Stock declared or paid prior to the IPO date. Subject to the next preceding
sentence, each share of Class A Common Stock and Class B Common Stock shall be
equal in respect of rights to dividends and other distributions in cash, stock
or property of the Corporation, provided that in the case of dividends or other
distributions payable in stock of the Corporation, including distributions
pursuant to stock split-ups or divisions of stock of the Corporation, which
occur after the IPO Date, only shares of Class A Common Stock shall be
distributed with respect to Class A Common Stock and only shares of Class B
Common Stock shall be distributed with respect to Class B Common Stock.
(c) The shares of Class A Common Stock and Class B Common Stock
shall only be issued in registered form.
4. No Pre-Emptive Rights. No holder of shares of any class shall
have any right, pre-emptive or other, to subscribe for or to purchase from the
Corporation any of the shares of any class of the Corporation hereinafter
issued or sold.
5. Domicile. The domicile of the Corporation shall be in Panama
City, Republic of Panama, however the Corporation may, as provided for by the
Board of Directors, engage in business and establish branches and keep its
files and assets anywhere in the world.
6. Duration. The duration of the Corporation shall be perpetual,
but it may previously be dissolved pursuant to law.
7
<PAGE> 8
7. Board of Directors. The Board of Directors shall consist of no
less than three (3) nor more than fifteen (15) members. Within said minimum
and maximum the number shall be set forth by resolution of the stockholders or
by resolution of the Board of Directors. Directors' meetings may take place in
the Republic of Panama or in any other country, and any Director may be
represented and vote by proxy or proxies at any and all Directors' meetings.
The Board of Directors shall have absolute control and full discretion over the
corporations' affairs, being understood that the Board of Directors shall be
empowered to contract loans or financing in general, to issue guarantees in
respect of its own, its subsidiaries, it and third party obligations, and to
mortgage its properties and assets without the prior consent or authorization
of the Assembly of the Shareholders of the corporation.
8. Officers. The Board of Directors, as soon as possible after the
annual election of directors, may choose a Chairman of the Board, a
Vice-Chairman of the Board, a President, a Chief Executive Officer, a Chief
Operating Officer, a Secretary, a Treasurer, and one or more Vice Presidents,
all of whom shall hold their offices until their successors are chosen and
qualify. More than one office may be held by the same person. The Board of
Directors may from time to time choose such other officers and agents as are
necessary, who shall hold their offices for such terms as are determined by the
Board of Directors. Any officer or agent chosen by the Board of Directors may
be removed at any time with or without cause by the affirmative vote of a
majority of the members of the Board of Directors then in office.
Until the Board of Directors provides otherwise, the legal representative
of the Corporation shall be the President and, in his absence, the Corporation
shall be represented by the Chairman of the Board.
9. Indemnification.
(a) The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any
8
<PAGE> 9
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was a director or an officer of the Corporation, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding
to the fullest extent and in the manner set forth in and permitted by the
General Corporation Law, and any other applicable law, as from time to time in
effect. Such right of indemnification shall not be deemed exclusive of any
other rights to which such director or officer may be entitled apart from the
foregoing provisions. The foregoing provisions of this Section 9(a) shall be
deemed to be a contract between the Corporation and each director and officer
who serves in such capacity at any time while this Article 9 and the relevant
provisions of the Corporation Law of the Republic of Panama and other
applicable law, if any, are in effect, and any repeal or modification thereof
shall not affect any rights or obligations then existing with respect to any
state of facts then or theretofore existing or any action, suit or proceeding
theretofore or thereafter brought or threatened based in whole or in part upon
any such state of facts.
(b) The Corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that he is or was an employee or agent
of the Corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding to the
extent and in the manner set forth in and permitted by the General Corporation
Law of the Republic of Panama, and any other applicable law, as from time to
time in effect. Such right of indemnification shall not be
9
<PAGE> 10
deemed exclusive of any other rights to which any such person may be entitled
apart from the foregoing provisions.
(c) The Corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the Corporation, or is or was serving at the request of the
Corporation, as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out
of his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of Section 9(a) and
9(b) above or under the Corporation Law of the Republic of Panama or any other
provision of law.
10. Adoption, Amendment and/or Repeal of By-Laws. The Board of
Directors may from time to time make, alter or repeal the by-laws of the
Corporation; provided, that any by-laws may be made by the shareholders of the
Corporation; and provided, that any by-laws made, amended or repealed by the
Board of Directors may be amended or repealed by the shareholders of the
Corporation.
10
<PAGE> 11
TRANSITORY PROVISIONS
11. Directors. The names and addresses of the Directors in office
as of the date hereof are as follows:
Name Address
---- -------
Micky Arison 5225 N.W. 87th Avenue
Miami, FL
Ted Arison 3915 Biscayne Blvd.
Miami, FL 33137
Robert H. Dickinson 5225 N.W. 87th Avenue
Miami, FL
Harvey Levinson 3915 Biscayne Blvd.
Miami, FL 33137
Sharon Arison Sueiras 3915 Biscayne Blvd.
Miami, FL 33137
Meshulam Zonis 5225 N.W. 87th Avenue
Miami, FL
In addition to the above directors, the following directors will commence
servicing immediately after the IPO Date:
Name Address
---- -------
Samuel Adler 1221 Brickell Avenue
Miami, Florida 33131
William S. Ruben 1120 Avenue of the
Americas
New York, NY 10019
Stuart Subotnick Harmon Plaza
Secaucus, NJ 07094
Sherwood M. Weiser 3250 Mary Street
Coconut Grove, FL 33131
Uzi Zucker 55 Water Street
New York, NY 10041
11
<PAGE> 12
All of the above directors shall remain in office until their successors are
duly elected and qualified.
12. Registered Agent. The Registered Agent of the Corporation in
Panama City, until the Board of Directors may provide otherwise, shall be
Marcela de Perez, 10 Elvira Mendez Street, Interseco Building, 7th Floor, Post
Office Box 7440, Panama 5, Republic of Panama.
13. Subscription by Incorporators. The name and address of each
signatory to the original Articles of Incorporation and the number of shares
which each such signatory has agreed to take are as follows:
<TABLE>
<CAPTION>
Name Address No. of Shares
---- ------- -------------
<S> <C> <C>
Mariano J. Oteiza No. 8 Aquilino de la 1 1
Guaardia Street,
Panama, R. of P.
Domingo Diaz A. No. 8 Aquilino de la 1 1
Guardia Street,
Panama, R. of P.
</TABLE>
Amended and Restated in ___________, this ____ day of ____________, 1995.
LOWELL ZEMNICK LAURENCE D. WINSON
--------------------------- -------------------------------
Vice President Secretary
12
<PAGE> 1
EXHIBIT 11
CARNIVAL CORPORATION
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
(In thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED FEBRUARY 28,
-------------------------------
1995 1994
---- ----
<S> <C> <C>
Net income $67,552 $65,051
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 1,385 1,385
------- -------
Adjusted net income $68,937 $66,436
======= =======
Weighted average shares
outstanding 282,826 282,674
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
------- -------
Adjusted weighted average
shares outstanding 289,444 289,292
======= =======
Earnings per share:
Primary $0.24 $0.23
Fully Diluted* $0.24 $0.23
</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> 1
EXHIBIT 12
CARNIVAL CORPORATION
RATIO OF EARNINGS TO FIXED CHARGES
(in thousands, except ratios)
<TABLE>
<CAPTION>
Three Months Ended February 28,
-------------------------------
1995 1994
---- ----
<S> <C> <C>
Net Income $ 67,552 $ 65,051
Income tax benefit (4,830) (4,285)
-------- --------
Income before income tax benefit 62,722 60,766
-------- --------
Fixed Charges:
Interest expense, net 17,551 13,137
Interest portion of rental expense (1) 531 735
Capitalized interest 3,805 4,297
-------- --------
TOTAL FIXED CHARGES 21,887 18,169
-------- --------
Fixed Charges Not Currently Affecting Income:
Capitalized interest (3,805) (4,297)
-------- --------
EARNINGS BEFORE FIXED CHARGES $ 80,804 $ 74,638
======== ========
RATIO OF EARNINGS TO FIXED CHARGES 3.7x 4.1x
======== ========
</TABLE>
------------------------
(1) Represents one-third of rental expense, which Company management believes
to be representative of the interest portion of rental expense.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1994
<PERIOD-END> FEB-28-1995
<CASH> 49,710
<SECURITIES> 63,920
<RECEIVABLES> 28,440
<ALLOWANCES> 0
<INVENTORY> 45,771
<CURRENT-ASSETS> 249,821
<PP&E> 3,655,898
<DEPRECIATION> 560,224
<TOTAL-ASSETS> 3,704,025
<CURRENT-LIABILITIES> 583,878
<BONDS> 1,128,365
<COMMON> 2,827
0
0
<OTHER-SE> 1,974,932
<TOTAL-LIABILITY-AND-EQUITY> 3,704,025
<SALES> 0
<TOTAL-REVENUES> 419,820
<CGS> 0
<TOTAL-COSTS> 247,229
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,356
<INCOME-PRETAX> 62,722
<INCOME-TAX> (4,830)
<INCOME-CONTINUING> 67,552
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 67,552
<EPS-PRIMARY> .24
<EPS-DILUTED> .24
</TABLE>
