<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 12, 1996
REGISTRATION NO. 333-13997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
CARNIVAL CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
REPUBLIC OF PANAMA 59-1562976
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
3655 N.W. 87TH AVENUE
MIAMI, FLORIDA 33178-2428
(305) 599-2600
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
-------------------
ARNALDO PEREZ, ESQ.
GENERAL COUNSEL
CARNIVAL CORPORATION
3655 N.W. 87TH AVENUE
MIAMI, FLORIDA 33178-2428
(305) 599-2600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-------------------
COPIES TO:
<TABLE>
<S> <C>
JAMES M. DUBIN, ESQ. ROBERT S. RISOLEO, ESQ.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON SULLIVAN & CROMWELL
1285 AVENUE OF THE AMERICAS 125 BROAD STREET
NEW YORK, NEW YORK 10019-6064 NEW YORK, NEW YORK 10004
(212) 373-3000 (212) 558-4000
</TABLE>
-------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than in connection with dividend or interest reinvestment plans,
please check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: / /
------------
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: / /
------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: / /
-------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) AGGREGATE OFFERING PRICE(2) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock,
$.01 par value. . . . . . . . . . .23,145,000(3) $31.4375 727,620,938 $220,491(4)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Class A Common Stock is not being registered for purposes of sales
outside the United States.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based on the average of the high ($31.625) and
low ($31.250) sales prices of the Registrant's Class A Common Stock on
the New York Stock Exchange on October 10, 1996.
(3) Includes 2,845,000 shares of Class A Common Stock to cover over-allotments,
if any.
(4) Previously paid.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION, DATED NOVEMBER 12, 1996
N82144BE.G01,840,810,H
20,300,000 SHARES
CARNIVAL CORPORATION
CLASS A COMMON STOCK
(PAR VALUE $.01 PER SHARE)
-------------------
Of the 20,300,000 shares of Class A Common Stock offered, 16,240,000 shares
are being offered hereby in the United States and 4,060,000 shares are being
offered in a concurrent international offering outside the United States. The
initial public offering price and the aggregate underwriting discount per share
will be identical for both offerings. See "Underwriting".
All of the 20,300,000 shares of Class A Common Stock offered are being sold
by certain shareholders of the Company. See "Selling Shareholders". The Company
will not receive any of the proceeds from the sale of the shares being sold by
the Selling Shareholders.
The last reported sale price of the Class A Common Stock, which is quoted
under the symbol "CCL," on the New York Stock Exchange on November 11, 1996 was
$30.250 per share. See "Price Range of Class A Common Stock and Dividends".
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------
<TABLE>
<CAPTION>
INITIAL
PUBLIC PROCEEDS TO
OFFERING UNDERWRITING SELLING
PRICE DISCOUNT(1) SHAREHOLDERS(2)
------------- ------------ -------------
<S> <C> <C> <C>
Per Share........................................ $ $ $
Total(3)......................................... $ $ $
</TABLE>
- ------------
(1) The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933.
(2) Before deducting estimated expenses of $ payable by the Company and
$ payable by the Selling Shareholders.
(3) Two of the Selling Shareholders have granted the U.S. Underwriters an
option for 30 days to purchase up to an additional 2,276,000 shares at the
initial public offering price per share, less the underwriting discount,
solely to cover over-allotments. Additionally, two of the Selling
Shareholders have granted the International Underwriters a similar option
with respect to an additional 569,000 shares as part of the concurrent
international offering. If such options are exercised in full, the total
initial public offering price, underwriting discount and proceeds to
Selling Shareholders will be $ , $ and $ ,
respectively. See "Underwriting".
----------------------
The shares offered hereby are offered severally by the U.S. Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that certificates
for the shares will be ready for delivery in New York, New York, on or about
, 1996, against payment therefor in immediately available funds.
GOLDMAN, SACHS & CO.
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
-------------------
The date of this Prospectus is , 1996.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CLASS A COMMON
STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-
THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
-------------------
AVAILABLE INFORMATION
Carnival Corporation (the "Company") is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy materials and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy materials and other information concerning the Company and the
Registration Statement (as defined below) can be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 or at its Regional Offices located at Suite 1400,
500 West Madison Street, Chicago, Illinois 60661 and 7 World Trade Center, 13th
Floor, New York, New York 10048. Copies can be obtained by mail from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. The Commission maintains a web site on the World Wide
Web that contains reports, proxy and other information regarding issuers that
file electronically with the Commission. The address of such site is
"http://www.sec.gov". In addition, reports, proxy statements and other
information concerning the Company can also be inspected at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005, on
which the Company's Class A Common Stock, par value $.01 per share (the "Class A
Common Stock"), and 4 1/2% Convertible Subordinated Notes Due July 1, 1997 (the
"Convertible Notes") are listed.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), with respect to the shares of Class A Common Stock offered hereby (the
"Shares"). This Prospectus does not contain all the information set forth in the
Registration Statement, certain parts of which have been omitted in accordance
with the rules and regulations of the Commission. For further information,
reference is hereby made to the Registration Statement including the exhibits
filed as a part thereof and otherwise incorporated therein. Statements made in
this Prospectus as to the contents of any documents referred to are not
necessarily complete, and in each instance reference is made to such exhibit for
a more complete description and each such statement is qualified in its entirety
by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended November
30, 1995 filed with the Commission (File No. 1-9610) pursuant to the Exchange
Act, the Company's Quarterly Reports on Form 10-Q for the quarters ended
February 28, 1996, May 31, 1996 and August 31, 1996, the Company's Current
Report on Form 8-K dated April 23, 1996 and the description of the Company's
Class A Common Stock contained in its Registration Statement on Form 8-A dated
October 31, 1991 filed with the Commission pursuant to Section 12(d) of the
Exchange Act, including any amendments or reports filed for the purpose of
updating such description, are incorporated herein by reference.
All other documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Shares made hereby shall be
deemed incorporated by reference in this Prospectus and to be a part hereof from
the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated herein by reference, or contained in
this Prospectus, shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus has been delivered, upon written or oral request of such person, a
copy (without exhibits other than exhibits specifically incorporated by
reference) of any or all documents incorporated by reference into this
Prospectus. Requests for such copies should be directed to Investor Relations,
Carnival Corporation, 3655 N.W. 87th Avenue, Miami, Florida 33178-2428;
telephone number (305) 599-2600.
2
<PAGE>
PROSPECTUS SUMMARY
The following is a summary of certain information contained in this
Prospectus. This summary is not intended to be complete and should be read in
conjunction with, and is qualified in its entirety by, the more detailed
information and financial statements appearing elsewhere in this Prospectus or
incorporated herein by reference. Unless indicated otherwise, the information
contained in this Prospectus assumes the Underwriters' over-allotment options
are not exercised. For all periods, the information contained in this Prospectus
reflects a two for one stock split of the Company's Common Stock that was
effective on November 30, 1994. Investors should carefully consider the
information set forth in "Certain Considerations" before making any decision to
invest in the Class A Common Stock. Certain Statements in this Prospectus
(including this Prospectus Summary) constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995 (the
"Reform Act"). See "Special Note Regarding Forward-Looking Statements."
THE COMPANY
Carnival Corporation is the world's largest multiple-night cruise company
based on the number of passengers carried and revenues generated. The Company
offers a broad range of cruise products, serving the contemporary cruise market
through Carnival Cruise Lines, the premium market through Holland America Line
and the luxury market through Windstar Cruises and the Company's joint venture,
Seabourn Cruise Line. In total, the Company owns and operates 21 cruise ships
(not including three ships owned by the Seabourn joint venture), with an
aggregate capacity of 28,195 passengers based on two passengers per cabin. The
ten Carnival Cruise Lines ships have an aggregate capacity of 17,690 passengers
with itineraries in the Caribbean, the Mexican Riviera and Alaska. The eight
Holland America Line ships have an aggregate capacity of 10,061 passengers, with
itineraries in the Caribbean, the Mediterranean and Alaska and through the
Panama Canal, as well as other worldwide itineraries. The three Windstar ships
have an aggregate capacity of 444 passengers with itineraries in the Caribbean,
the South Pacific, the Mediterranean and the Far East. The three Seabourn ships
have an aggregate capacity of 612 passengers with itineraries in the Caribbean,
the Baltic, the Mediterranean and the Far East.
The Company has signed agreements with a Finnish shipyard providing for the
construction of two additional SuperLiners, each with a capacity of 2,040
passengers, for Carnival Cruise Lines with delivery expected in March 1998 and
November 1998. The Company also has agreements with an Italian shipyard for the
construction of two cruise ships, each with a capacity of 2,640 passengers, for
Carnival Cruise Lines with delivery expected in October 1996 and mid-1999 and
for the construction of one cruise ship with a capacity of 1,320 passengers and
two cruise ships, each with a capacity of 1,440 passengers, for Holland America
Line, with delivery expected in October 1997, February 1999 and September 1999,
respectively. As a result of this shipbuilding program and planned ship sales
and retirements, the Company currently expects its passenger capacity to
increase by 11,463 to 39,658 in mid-1999.
The Company also operates a tour business, through Holland America
Line-Westours Inc. ("Holland America Westours"), which markets sightseeing tours
both separately and as a part of Holland America Line cruise/tour packages.
Holland America Westours operates 16 hotels in Alaska and the Canadian Yukon,
two luxury day-boats offering tours to the glaciers of Alaska and the Yukon
River, over 290 motor coaches used for sightseeing and charters in the states of
Washington and Alaska and in the Canadian Rockies and 13 private domed rail cars
which are run on the Alaskan railroad between Anchorage and Fairbanks.
3
<PAGE>
In April 1996, the Company acquired a 29.5% interest in Airtours plc
("Airtours") for approximately $307 million. Airtours is a leisure travel
company publicly traded on the London Stock Exchange and provides air inclusive
packaged holidays to the British, Scandinavian and North American markets.
Airtours provides holidays to approximately 4.4 million people per year and owns
or operates 41 hotels, 3 cruise ships and 31 aircraft. The Company's investment
in Airtours significantly broadens the Company's geographic reach, providing
enhanced access to the important European and Canadian markets. The investment
also serves to expand the Company's scope of operations into other segments of
the leisure travel industry.
In September 1996, the Company entered into a joint venture agreement with
Hyundai Merchant Marine Co., Ltd. ("HMM") to develop the Asian cruise vacation
market. Under the joint venture agreement, the Company and HMM will each make a
capital contribution of $10 million to the new joint venture which intends to
create a cruise product specifically tailored to the desires and tastes of the
growing middle-class market of Asian vacation travelers. The Company has also
entered into an agreement with the joint venture to sell Carnival Cruise Lines'
cruise ship Tropicale to the joint venture, subject to the immediate charter
back of the vessel to the Company. A charter agreement between the Company and
the joint venture will allow the Company to operate the Tropicale until the
joint venture begins its cruise operations, which is currently expected to occur
in the spring of 1998. The closing of the joint venture is subject to the
consummation of certain ancillary agreements, which are expected to be entered
into in the near future.
The Company was incorporated under the laws of the Republic of Panama in
November 1974. The Company's executive offices are located at 3655 N.W. 87th
Avenue, Miami, Florida 33178-2428, telephone number (305) 599-2600. The
Company's registered office in Panama is located at 10 Elvira Mendez Street,
Interseco Building, Panama, Republic of Panama.
4
<PAGE>
THE OFFERINGS
<TABLE>
<CAPTION>
Class A Common Stock offered by the Selling Shareholders(1):
<S> <C>
U.S. Offering................................ 16,240,000 shares
International Offering....................... 4,060,000 shares
Total........................................ 20,300,000 shares
Class A Common Stock
outstanding (2)............................ 239,519,675 shares of Class A Common Stock.
In addition, 54,957,142 shares of the
Company's Class B Common Stock, par value
$.01 per share (the "Class B Common Stock"
and, collectively with the Class A Common
Stock, the "Common Stock"), are outstanding.
NYSE Symbol.................................. CCL
Use of Proceeds.............................. The Company will not receive any proceeds
from the sale of the Shares being sold by the
Selling Shareholders (as defined below). See
"Use of Proceeds".
Selling Shareholders......................... The selling shareholders are Ted Arison, The
Arison Foundation, Inc., The Royal Bank of
Scotland Trust Company (Jersey) Limited, as
trustee for the Ted Arison Charitable Trust
and New World Symphony Supporting Foundation,
Inc.(collectively, the "Selling Shareholders").
Ted Arison is selling his Shares for certain
estate planning and other related purposes.
</TABLE>
- ------------
(1) Ted Arison and New World Symphony Supporting Foundation, Inc. have granted
the U.S. and International Underwriters over-allotment options to purchase
a total of 2,845,000 additional shares of Class A Common Stock.
(2) Excludes approximately 2,545,140 shares of Class A Common Stock subject to
outstanding options granted under the Company's stock option plans and
approximately 2,599,954 shares that are reserved for issuance upon
conversion of the Convertible Notes.
5
<PAGE>
SUMMARY FINANCIAL INFORMATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
AUGUST 31, YEAR ENDED NOVEMBER 30,
----------------------- --------------------------------------------------------------
1996(1) 1995(1) 1995 1994 1993 1992(2) 1991
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS DATA:
Revenues.............. $1,737,613 $1,545,244 $1,998,150 $1,806,016 $1,556,919 $1,473,614 $1,404,704
Operating income
before income from
affiliated
operations............ 458,360 397,300 490,038 443,674 347,666 324,896 315,905
Income from affiliated
operations(3)......... 12,956 -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating income...... 471,316 397,300 490,038 443,674 347,666 324,896 315,905
Income from continuing
operations............ 451,479 366,863 451,091 381,765 318,170 281,773 253,824
Discontinued
operations(4)......... -- -- -- -- -- -- (168,836)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income............ 451,479 366,863 451,091 381,765 318,170 276,584 84,988
Earnings per share:
Continuing
operations............ $ 1.56 $ 1.29 $ 1.59 $ 1.35 $ 1.13 $ 1.00 $ .93
Net income.......... $ 1.56 $ 1.29 $ 1.59 $ 1.35 $ 1.13 $ .98 $ .31
Dividends declared per
share................. $ .27 $ .225 $ .315 $ .285 $ .280 $ .280 $ .245
Weighted average
shares................ 288,524 283,921 284,220 282,744 282,474 281,686 273,832
Passenger cruise
days.................. 8,088 6,825 9,201 8,102 7,003 6,766 6,365
Percentage of total
cruise capacity(5).... 109.7% 105.1% 105.0% 104.0% 105.3% 105.3% 105.7%
</TABLE>
<TABLE>
<CAPTION>
AUGUST 31,
1996
------------
<S> <C>
BALANCE SHEET DATA:
Cash and cash equivalents and short-term investments.................................... $ 104,673
Total current assets.................................................................... 263,695
Total assets............................................................................ 4,703,096
Customer deposits(6).................................................................... 311,765
Total current liabilities............................................................... 689,568
Long-term debt and convertible notes.................................................... 1,059,519
Total shareholders' equity.............................................................. 2,937,219
</TABLE>
- ------------
(1) In the nine months ended August 31, 1996, the Company recognized a $32.0
million gain from the settlement of bankruptcy claims against Wartsila (as
defined herein) and a loss of $15.8 million on the sale of notes receivable
generated from the sale of Carnival's Crystal Palace Resort and Casino (the
"CCP Resort"). In the nine months ended August 31, 1995, the Company
recognized a $14.4 million gain from the settlement of litigation with Metra
Oy, the former parent of Wartsila.
(2) In the fiscal year ended November 30, 1992, the Company took an
extraordinary charge of $5.2 million in connection with the early redemption
of its Zero Coupon Convertible Subordinated Notes due 2005.
(3) Represents income from affiliated companies, including Airtours. The Company
acquired a 29.5% interest in Airtours in April 1996 and starting with the
quarter ended August 31, 1996, the Company's share of Airtours' operating
results is being recorded by the Company on a two-month lag basis.
(4) In November 1991, the Company adopted a formal plan to dispose of the CCP
Resort, which comprised the entire resort and casino segment of the
Company's operations. At that time, the Company recorded a provision for the
loss on disposal of the CCP Resort of approximately $135 million,
representing a write-down of $95 million to record the property at its
estimated net realizable value and a provision of $40 million for the
possible funding of the CCP Resort prior to disposal.
(5) In accordance with cruise industry practice, total capacity is calculated
based on two passengers per cabin even though some cabins can accommodate
three or four passengers. The percentages in excess of 100% indicate that
more than two passengers occupied some cabins.
(6) Represents customer deposits for cruises and tours which will be recognized
as revenue when earned in the future.
6
<PAGE>
CERTAIN CONSIDERATIONS
TAXATION OF THE COMPANY
The Company believes that it is not subject to United States corporate tax
on its income from the international operation of ships ("Shipping Income").
(Certain of the Company's United States source income, such as Holland America
Line's income from bus, hotel and tour operations, is not Shipping Income, and
thus is subject to United States tax.) The applicable exemption from United
States corporate income tax, which is provided by Section 883 of the Internal
Revenue Code of 1986, as amended (the "Code"), is available under current United
States law for as long as the Company and its subsidiaries that earn Shipping
Income (collectively, the "Shipping Companies") meet both an "Incorporation
Test" and a "CFC Test".
A corporation meets the Incorporation Test if it is organized under the laws
of a foreign country that grants an equivalent exemption to corporations
organized in the United States (an "equivalent exemption jurisdiction"). The
Company believes that all of the Shipping Companies are organized in equivalent
exemption jurisdictions.
A Shipping Company meets the CFC Test if it is a controlled foreign
corporation ("CFC"), as defined in Section 957(a) of the Code. A foreign
corporation is a CFC if stock representing more than 50% of such corporation's
voting power or equity value is owned (or considered as owned) by United States
persons each of whom owns (or is considered to own) stock representing 10% or
more of the corporation's voting power.
The Company and the Shipping Companies meet the CFC Test because stock of
the Company representing more than 50% of the voting power of all the Company's
stock is owned by the Micky Arison 1994 "B" Trust, a United States trust whose
primary beneficiary is Micky Arison (the "B Trust"). If the Company and the
Shipping Companies were to cease to meet the CFC test, and no other basis for
exemption were available, much of their income would become subject to taxation
by the United States at higher than normal corporate tax rates.
CONTROL BY PRINCIPAL SHAREHOLDERS
Following the sale of the Shares, Ted Arison, the B Trust, certain members
of the Arison family, trusts for the benefit of Mr. Ted Arison's children and
the Arison Foundation, Inc., a private foundation established by Ted Arison
(collectively, the "Principal Shareholders"), will beneficially own, in the
aggregate, approximately 48.24% of the outstanding capital stock and will
control, in the aggregate, approximately 70.37% of the voting power of the
Company. For as long as the B Trust holds a majority of the shares of the Class
B Common Stock and the number of outstanding shares of Class B Common Stock is
at least 12 1/2% of the number of outstanding shares of both Class A and Class B
Common Stock, the B Trust will have the power to elect at least 75% of the
directors and to substantially influence the Company's affairs and policies.
Micky Arison, the Chairman and Chief Executive Officer of the Company, has the
sole right to vote and direct the sale of the Class B Common Stock held by the B
Trust, subject, during Ted Arison's lifetime, to the consent of the trustee of
the B Trust. The Company has agreed under certain loan agreements to ensure that
Ted Arison or members of his immediate family beneficially own, directly or
indirectly, a number of shares of the Company's capital stock at least
sufficient to elect the majority of the directors.
7
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares being
sold by the Selling Shareholders. Ted Arison is selling his Shares for certain
estate planning and other related purposes.
PRICE RANGE OF CLASS A COMMON STOCK AND DIVIDENDS
The Company's Class A Common Stock is listed on the New York Stock Exchange
under the symbol "CCL". There is no established public trading market for the
Company's Class B Common Stock.
The following table sets forth for the periods indicated the high and low
intra-day prices for the Class A Common Stock, as reported on the New York Stock
Exchange-Composite Transactions, and dividends paid on the Class A Common Stock.
<TABLE>
<CAPTION>
CLASS A
COMMON STOCK
PRICES
------------------
HIGH LOW DIVIDENDS
------- ------- ---------
<S> <C> <C> <C>
1996:
Fourth Quarter (through November 11, 1996)................. $31.875 $29.250 $.110
Third Quarter............................................. 31.500 24.500 .090
Second Quarter............................................ 30.125 26.125 .090
First Quarter............................................. 29.000 22.750 .090
1995:
Fourth Quarter............................................ 27.125 20.625 .090
Third Quarter............................................. 24.250 20.375 .075
Second Quarter............................................ 26.625 22.125 .075
First Quarter............................................. 23.750 19.125 .075
1994:
Fourth Quarter............................................ 23.125 20.563 .075
Third Quarter............................................. 24.063 21.750 .070
Second Quarter............................................ 25.438 21.000 .070
First Quarter............................................. 26.125 23.000 .070
</TABLE>
As of November 11, 1996, there were approximately 3,741 holders of record of
the Company's Class A Common Stock. All of the issued and outstanding shares of
Class B Common Stock are held by the B Trust. The last reported sale price of
the Class A Common Stock on the New York Stock Exchange on November 11, 1996 was
$30.250 per share.
8
<PAGE>
DIVIDEND POLICY
The Company declared cash dividends of $.070 per share in each of the first
three quarters of fiscal 1994, $.075 per share in the fourth quarter of fiscal
1994 and the first three quarters of fiscal 1995, $.090 per share in the fourth
quarter of fiscal 1995 and the first three quarters of fiscal 1996 and $.110 per
share in the fourth quarter of fiscal 1996. Payment of future quarterly
dividends will depend, among other factors, upon the Company's earnings,
financial condition and capital requirements and certain tax considerations of
certain of the Principal Shareholders, some of whom are required to include a
portion of the Company's earnings in their taxable income whether or not the
earnings are distributed. The Company may also declare special dividends to all
shareholders in the event that the Principal Shareholders are required to pay
additional income taxes by reason of their ownership of the Common Stock, either
because of an income tax audit of the Company or the Principal Shareholders or
because of certain actions by the Company (such as a failure by the Company to
maintain its investment in shipping assets at a certain level) that would
trigger adverse tax consequences to the Principal Shareholders under the special
tax rules applicable to them.
Any dividend declared by the Board of Directors on the Company's Common
Stock will be paid concurrently at the same rate on the Class A Common Stock and
the Class B Common Stock.
While no tax treaty currently exists between the Republic of Panama and the
United States, under current law the Company believes that distributions to its
shareholders are not subject to taxation under the laws of the Republic of
Panama. Dividends paid by the Company will be taxable as ordinary income for
United States Federal income tax purposes to the extent of the Company's current
or accumulated earnings and profits, but generally will not qualify for any
dividends-received deduction.
The payment and amount of any dividend is within the discretion of the Board
of Directors, and it is possible that the amount of any dividend may vary from
the levels discussed above. If the law regarding the taxation of the Company's
income to the Principal Shareholders were to change so that the amount of tax
payable by the Principal Shareholders were increased or reduced, the amount of
dividends paid by the Company might be more or less than is currently
contemplated.
9
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company at August
31, 1996. The information set forth below should be read in conjunction with the
financial statements and related notes incorporated in this Prospectus by
reference.
<TABLE>
<CAPTION>
AUGUST 31, 1996
-----------------
(AMOUNTS IN
THOUSANDS)
<S> <C>
Current portion of long-term debt......................................... $ 72,525
-----------------
-----------------
Long-term debt and convertible notes:
Mortgages and other loans payable bearing interest at rates ranging from
8% to 9.9%, secured by vessels........................................ $ 98,446
Unsecured Revolving Credit Facility Due 2000............................ 25,000
Multi-currency Revolving Credit Facility Due 2001....................... 166,000
Other loans payable..................................................... 75,336
5.75% Notes Due March 15, 1998.......................................... 200,000
6.15% Notes Due October 1, 2003......................................... 124,951
7.70% Notes Due July 15, 2004........................................... 99,910
7.05% Notes Due May 15, 2005............................................ 99,826
7.20% Debentures Due October 1, 2023.................................... 124,870
4.50% Convertible Subordinated Notes Due July 1, 1997................... 45,180
-----------------
Total long-term debt and convertible notes.......................... $ 1,059,519
-----------------
Shareholders' equity:
Class A Common Stock ($.01 par value; one vote per share; 399,500 shares
authorized; 239,348 shares issued and outstanding)........................ $ 2,393
Class B Common Stock ($.01 par value; five votes per share; 100,500
shares authorized; 54,957 shares issued and outstanding).............. 550
Paid-in capital......................................................... 812,808
Retained earnings....................................................... 2,125,374
Less--other............................................................. (3,906)
-----------------
Total shareholders' equity.......................................... 2,937,219
-----------------
Total capitalization................................................ $ 3,996,738
-----------------
-----------------
</TABLE>
10
<PAGE>
SELECTED FINANCIAL DATA
The selected financial data presented below for the fiscal years ended
November 30, 1991 through 1995 and as of the end of each such fiscal year are
derived from the financial statements of the Company and should be read in
conjunction with such financial statements and the related notes incorporated in
this Prospectus by reference. The selected financial data for the nine-month
periods ended August 31, 1996 and 1995 are unaudited and, in the opinion of
management, include all adjustments, consisting of only normal recurring
accruals, necessary for a fair presentation of such data. The Company's
operations are seasonal, and results for interim periods are not necessarily
indicative of the results for the entire year. Certain amounts in prior years
have been reclassified to conform with the current year's presentation.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
AUGUST 31, YEAR ENDED NOVEMBER 30,
----------------------- --------------------------------------------------------------
1996(1) 1995(1) 1995 1994 1993 1992(2) 1991
---------- ---------- ---------- ---------- ---------- ---------- ----------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS DATA:
Revenues.................. $1,737,613 $1,545,244 $1,998,150 $1,806,016 $1,556,919 $1,473,614 $1,404,704
Costs and expenses:
Operating expenses....... 962,435 865,311 1,131,113 1,028,475 907,925 865,587 810,317
Selling and
administrative............ 209,221 187,880 248,566 223,272 207,995 194,298 193,316
Depreciation and
amortization.............. 107,597 94,753 128,433 110,595 93,333 88,833 85,166
---------- ---------- ---------- ---------- ---------- ---------- ----------
1,279,253 1,147,944 1,508,112 1,362,342 1,209,253 1,148,718 1,088,799
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating income before
income from affiliated
operations................ 458,360 397,300 490,038 443,674 347,666 324,896 315,905
Income from affiliated
operations(3)............. 12,956 -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating income.......... 471,316 397,300 490,038 443,674 347,666 324,896 315,905
Nonoperating income
(expense):
Interest income.......... 17,280 10,311 14,403 8,668 11,527 16,946 10,596
Interest expense, net of
capitalized interest...... (49,889) (48,583) (63,080) (51,378) (34,325) (53,792) (65,428)
Other income (expense)... 23,778 18,931 19,104 (9,146) (1,201) 2,731 1,746
Income tax expense....... (11,006) (11,096) (9,374) (10,053) (5,497) (9,008) (8,995)
---------- ---------- ---------- ---------- ---------- ---------- ----------
(19,837) (30,437) (38,947) (61,909) (29,496) (43,123) (62,081)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income from continuing
operations................ 451,479 366,863 451,091 381,765 318,170 281,773 253,824
Discontinued operations:
Loss from operations of
hotel and casino
segment(4)................ -- -- -- -- -- -- (33,373)
Estimated loss on
disposal of hotel and
casino segment(4)...... -- -- -- -- -- -- (135,463)
Extraordinary item:
Loss on early
extinguishment of
debt(2)................... -- -- -- -- -- (5,189) --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income................ $ 451,479 $ 366,863 $ 451,091 $ 381,765 $ 318,170 $ 276,584 $ 84,988
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
Earnings per share:
Continuing operations.... $ 1.56 $ 1.29 $ 1.59 $ 1.35 $ 1.13 $ 1.00 $ .93
Net income............... $ 1.56 $ 1.29 $ 1.59 $ 1.35 $ 1.13 $ .98 $ .31
Dividends declared per
share..................... $ .270 $ .225 $ .315 $ .285 $ .280 $ .280 $ .245
Weighted average shares... 288,524 283,921 284,220 282,744 282,474 281,686 273,832
Passenger cruise days..... 8,088 6,825 9,201 8,102 7,003 6,766 6,365
Percent of total cruise
capacity(5)............... 109.7% 105.1% 105.0% 104.0% 105.3% 105.3% 105.7%
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
AUGUST 31, NOVEMBER 30,
---------- --------------------------------------------------------------
1996(1) 1995(1) 1994 1993 1992(1) 1991
---------- ---------- ---------- ---------- ---------- ----------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents and
short-term investments.............. $ 104,673 $ 103,760 $ 124,220 $ 148,920 $ 226,062 $ 278,136
Total current assets................. 263,695 256,378 240,449 253,798 311,424 363,788
Total assets......................... 4,703,096 4,105,487 3,669,823 3,218,920 2,645,607 2,650,252
Customer deposits(6)................. 311,765 292,606 257,505 228,153 178,945 167,723
Total current liabilities............ 689,568 594,710 564,957 549,994 474,781 551,287
Long-term debt and convertible
notes................................ 1,059,519 1,150,031 1,161,904 1,031,221 776,600 921,689
Total shareholders' equity........... 2,937,219 2,344,873 1,928,934 1,627,206 1,384,845 1,171,129
</TABLE>
- ------------
(1) In the nine months ended August 31, 1996, the Company recognized a $32.0
million gain from the settlement of bankruptcy claims against Wartsila and a
loss of $15.8 million on the sale of notes receivable generated from the
sale of the CCP Resort. In the nine months ended August 31, 1995, the
Company recognized a $14.4 million gain from the settlement of litigation
with Metra Oy, the former parent of Wartsila.
(2) In the fiscal year ended November 30, 1992, the Company took an
extraordinary charge of $5.2 million in connection with the early redemption
of its Zero Coupon Convertible Subordinated Notes due 2005.
(3) Represents income from affiliated companies, including Airtours. The Company
acquired a 29.5% interest in Airtours in April 1996 and starting with the
quarter ended August 31, 1996, the Company's share of Airtours' operating
results is being recorded by the Company on a two-month lag basis.
(4) In November 1991, the Company adopted a formal plan to dispose of Carnival's
Crystal Palace Resort and Casino (the "CCP Resort"), which comprised the
entire resort and casino segment of the Company's operations. At that time,
the Company recorded a provision for the loss on disposal of the CCP Resort
of approximately $135 million, representing a write-down of $95 million to
record the property at its estimated net realizable value and a provision of
$40 million for the possible funding of the CCP Resort prior to disposal.
(5) In accordance with cruise industry practice, total capacity is calculated
based on two passengers per cabin even though some cabins can accommodate
three or four passengers. The percentages in excess of 100% indicate that
more than two passengers occupied some cabins.
(6) Represents customer deposits for cruises and tours which will be recognized
as revenue when earned in the future.
12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Certain statements contained in "Management's Discussion of Financial
Condition and Results of Operations" constitute forward-looking statements under
the Reform Act. See "Special Note Regarding Forward-Looking Statements."
RESULTS OF OPERATIONS
The Company earns cruise revenues primarily from (i) the sale of passenger
tickets, which include 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. The Company also derives revenues from the tour and related
operations of HAL Antillen N.V., a subsidiary of the Company ("HAL").
The following table presents statements of operations data expressed as a
percentage of total revenues and selected statistical information for the
periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
AUGUST 31 YEAR ENDED NOVEMBER 30,
---------------------- -----------------------------------
1996 1995 1995 1994 1993
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
REVENUES......................... 100 % 100 % 100 % 100 % 100 %
OPERATING COSTS AND EXPENSES:
Operating expenses............. 56 56 57 57 58
Selling and administrative..... 12 12 12 12 14
Depreciation and
amortization....................... 6 6 6 6 6
--- --- --- --- ---
OPERATING INCOME BEFORE INCOME
FROM AFFILIATED OPERATIONS......... 26 26 25 25 22
INCOME FROM AFFILIATED
OPERATIONS......................... 1 -- -- -- --
--- --- --- --- ---
OPERATING INCOME................. 27 26 25 25 22
NONOPERATING INCOME (EXPENSE).... (1) (2) (2) (4) (2)
--- --- --- --- ---
INCOME FROM CONTINUING
OPERATIONS......................... 26 % 24 % 23 % 21 % 20 %
--- --- --- --- ---
--- --- --- --- ---
SELECTED STATISTICAL INFORMATION:
Passengers carried............... 1,351,000 1,139,000 1,543,000 1,354,000 1,154,000
Passenger cruise days............ 8,088,000 6,825,000 9,201,000 8,102,000 7,003,000
Occupancy percentage............. 109.7 % 105.1 % 105.0 % 104.0 % 105.3 %
</TABLE>
GENERAL
The growth in the Company's revenues during the last three fiscal years has
primarily been a function of the expansion of its fleet capacity.
Fixed costs, including depreciation, fuel, insurance, and crew costs
represent more than one-third of the Company's operating expenses and do not
significantly change in relation to changes in passenger loads and aggregate
passenger ticket revenue. 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 June through August and lower during the fall months. 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
and Europe and HAL typically obtains higher pricing for these summer products.
Demand for HAL
13
<PAGE>
cruises is lower during the winter months when HAL ships sail in more
competitive markets. 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.
In April 1996, the Company made an investment in Airtours which it records
using the equity basis of accounting. Starting with the Company's quarter ending
August 31, 1996, the Company's share of Airtours' operating results is being
recorded by the Company on a two month lag basis. Airtours' earnings are
seasonal due to the seasonal nature of the European leisure travel industry.
During the last two fiscal years, Airtours' third and fourth fiscal quarters,
ending June 30 and September 30, respectively, have been profitable, with the
fourth quarter being its most profitable quarter. During this same period,
Airtours experienced seasonal losses in its first and second fiscal quarters
ending on December 31 and March 31, respectively.
Average capacity is expected to increase 8.2% during the fourth fiscal
quarter of 1996 as compared with the same period in 1995, as a result of the
introduction into service of the Inspiration in March 1996 and the Veendam in
May 1996. See "Special Note Regarding Forward-Looking Statements."
NINE MONTHS ENDED AUGUST 31, 1996 COMPARED TO NINE MONTHS ENDED AUGUST 31, 1995
REVENUES
The increase in total revenues of $192.4 million, or 12.4%, from the first
nine months of 1995 to the first nine months of 1996 was primarily comprised of
a $180.2 million, or 13.2%, increase in cruise revenues. The increase in cruise
revenues was primarily the result of a 13.5% increase in capacity for the period
resulting from the addition of the Carnival cruise ships Imagination in July
1995 and Inspiration in March 1996 and Holland America Line's cruise ship
Veendam in May 1996. Occupancy rates were up 4.4% and gross pricing was down
4.5% resulting in a decrease of 0.3% in gross yield (total revenue per lower
berth). Net yields, i.e., net revenue per lower berth (net revenue is total
revenues less travel agent commissions, airfare costs and other less significant
cruise costs), increased 1.1% during the first nine months of the year due to
improved occupancy rates. Also affecting cruise revenues during 1995 were lost
revenues caused by the shipboard incident described under "--Nonoperating Income
(Expense)" below.
Revenues from the Company's tour operations increased $20.9 million, or
9.6%, to $238.6 million in 1996 from $217.7 million in 1995. The increase was
primarily the result of an increase in tour and transportation revenues due to
an increase in the number of tour passengers.
COSTS AND EXPENSES
Operating expenses increased $97.1 million, or 11.2%, from the first nine
months of 1995 to the first nine months of 1996. Cruise operating costs
increased by $85.0 million, or 11.4%, to $827.9 million in the first nine months
of 1996 from $742.9 million in the first nine months of 1995, primarily due to
additional costs associated with the increased capacity.
Tour operating expenses increased $20.8 million, or 12.7%, from the first
nine months of 1995 to the first nine months of 1996, primarily due to an
increase in the number of tour passengers.
Selling and administrative costs increased $21.3 million, or 11.4%, mainly
due to an increase in advertising expenses and an increase in payroll and
related costs associated with the increase in capacity during the first nine
months of 1996 as compared with the same period of 1995.
14
<PAGE>
Depreciation and amortization increased by $12.8 million, or 13.6%, to
$107.6 million in the first nine months of 1996 from $94.8 million in the first
nine months of 1995, primarily due to the addition of the Imagination,
Inspiration and the Veendam.
AFFILIATED OPERATIONS
During April 1996, the Company acquired a 29.5% interest in Airtours and is
recording its share of Airtours' earnings on a two-month lag basis. During the
Company's quarter ended August 31, 1996, the Company's share of earnings for
Airtours was recorded for Airtours' quarter ended June 30, 1996. The Company
also began reporting its equity in earnings of certain other affiliates.
NONOPERATING INCOME (EXPENSE)
Total nonoperating expense (net of nonoperating income) decreased to $19.8
million for the first nine months of 1996 from $30.4 million in the first nine
months of 1995. Interest income increased $7.0 million primarily due to the
Company's holding of 13% Senior Secured Notes (which were redeemed in April
1996) of Norwegian Cruise Line, Ltd. (the "NCL Bonds") and, to a lesser degree,
increases in cash balances. Cash balances, up to the closing of the Airtours
transaction in April 1996, increased due to United Kingdom regulatory
requirements applicable to the Company's tender offer to acquire its interest in
Airtours. Gross interest expense (excluding capitalized interest) increased $6.6
million primarily as a result of additional borrowings required in connection
with the acquisition of Airtours. Capitalized interest increased $5.3 million
due to higher investment levels in vessels under construction.
Other income increased to $23.8 million in the first nine months of 1996
primarily as a result of a $32.0 million gain from settlement of bankruptcy
claims against Wartsila (see "Business-- Litigation"), less a loss on the sale
of the notes receivable generated from the sale of CCP Resort of $15.8 million.
Other income of $18.9 million in the first nine months of 1995 included a $14.4
million gain from the settlement of litigation with Metra Oy (see
"Business--Litigation") and a gain on the sale of the Company's entire interest
in Epirotiki Cruise Line less a loss of $3.0 million from a fire on Carnival
Cruise Lines' Celebration as well as other non-related, non-recurring items. In
addition, the Company estimated the loss of revenue, net of related variable
expense, from the Celebration being out of service due to the fire reduced
operating income and net income by an additional $7.3 million in the third
quarter of 1995.
FISCAL YEAR ENDED NOVEMBER 30, 1995 COMPARED TO FISCAL YEAR ENDED
NOVEMBER 30, 1994
REVENUES
The increase in total revenues of $192.1 million from 1994 to 1995 was
comprised primarily of a $177.7 million, or 10.9%, increase in cruise revenues.
The increase in cruise revenues was primarily the result of a 12.5% increase in
capacity for the period resulting from the addition of Carnival's cruise ship
Fascination in July 1994, HAL's Ryndam in October 1994, and Carnival's
Imagination in July 1995, partially offset by the discontinuation of the
FiestaMarina division of Carnival in September 1994. Also affecting cruise
revenues were lower gross passenger per diems. 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. Occupancy rates increased by approximately 1%. Also affecting cruise
revenues in 1995 and 1994 were lost revenues caused by the incidents described
under "--Nonoperating Income (Expense)" below.
15
<PAGE>
Revenues from the Company's tour operations increased $14.3 million, or
6.3%, to $241.9 million in 1995 from $227.6 million in 1994. The increase was
primarily the result of an increase in the tour and transportation revenues
generated by the Company's tour business and Gray Line of Alaska tour and
motorcoach operations.
COSTS AND EXPENSES
Operating expenses increased $102.6 million, or 10.0%, from 1994 to 1995.
Cruise operating costs increased by $93.8 million, or 10.5%, to $990.0 million
in 1995 from $896.3 million in 1994, primarily due to additional costs
associated with the increased capacity in 1995.
Tour operating expenses increased $8.7 million, or 4.9%, from 1994 to 1995,
primarily due to an increase in tour passengers.
Selling and administrative expenses increased $25.3 million, or 11.3%,
primarily due to a 14.6% increase in advertising expenses and an increase in
payroll and related costs during 1995 as compared with the same period in 1994.
Depreciation and amortization increased by $17.8 million, or 16.1%, to
$128.4 million in 1995 from $110.6 million in 1994 primarily due to the addition
of the Ryndam, the Fascination and the Imagination.
NONOPERATING INCOME (EXPENSE)
Total nonoperating expense (net of nonoperating income) decreased to $38.9
million in 1995 from $61.9 million in 1994. Interest income increased $5.7
million in 1995 due to the recognition of interest income on notes received from
the sale of the CCP Resort and higher investment balances. Total interest
expense increased to $81.9 million in 1995 from $73.2 million in 1994, primarily
as a result of increased average debt levels and higher variable interest rates.
The higher debt levels were the result of expenditures made in connection with
the ongoing construction and delivery of new cruise ships. Capitalized interest
decreased to $18.8 million in 1995 from $21.9 million in 1994 due to lower
levels of investments in vessels under construction.
Other income increased to $19.1 million in 1995 primarily as a result of a
$14.4 million gain from the settlement of litigation with Metra Oy and a gain
from the sale of the Company's entire interest in Epirotiki Cruise Line. These
gains were partially offset by the loss from the Celebration incident discussed
below and certain other non-related, non-recurring items. See "Business--
Litigation."
In June 1995, a fire, which was quickly extinguished, broke out in the
engine control room on Carnival's 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 caused the cancellation of four one-week cruises. Costs
associated with repairs to the ship, passenger handling and various other
expenses, net of estimated insurance recoveries, amounted to $3.0 million and
were included in other expenses. In addition, the Company estimates that the
loss of revenue, net of related variable expenses, from the Celebration being
out of service, reduced operating income and net income by an additional $7.3
million in 1995.
Other expenses of $9.1 million in 1994 were primarily the result of two
events. In September 1994, the Company discontinued its FiestaMarina division
because of lower than expected passenger occupancy levels which resulted in a
charge of $3.2 million to other expenses. In August 1994, HAL's Nieuw Amsterdam
ran aground in Alaska resulting in the cancellation of three one-week cruises.
Costs associated with repairs to the ship, passenger handling and various other
16
<PAGE>
expenses, net of estimated insurance recoveries, amounted to $6.4 million and
were included in other expenses. In addition, the Company estimates that the
loss of revenue, net of related variable expenses, from the Nieuw Amsterdam
being out of service during that three-week period, reduced operating income and
net income by an additional $4.5 million in 1994.
FISCAL YEAR ENDED NOVEMBER 30, 1994 COMPARED TO FISCAL YEAR ENDED
NOVEMBER 30, 1993
REVENUES
The increase in total revenues of $249.1 million from 1993 to 1994 was
comprised of a $241.6 million, or 17.5%, increase in cruise revenues and an
increase of $7.5 million, or 4.3%, in tour revenues for the period. The increase
in cruise revenues was primarily the result of a 17.2% increase in capacity for
the period. This capacity increase resulted from additional capacity provided by
Carnival's SuperLiners Sensation and Fascination which entered service in
November 1993 and July 1994, respectively, and Holland America Line's Maasdam
and Ryndam which entered service in December 1993 and October 1994,
respectively. Also affecting cruise revenues were slightly higher yields,
slightly lower occupancies and lost revenues related to the grounding of the
Nieuw Amsterdam which resulted in the cancellation of three one-week cruises in
August 1994. See "--Nonoperating Income (Expense)" above.
Revenues from the Company's tour operations increased to $227.6 million in
1994 from $214.4 million in 1993 primarily due to an increase in the number of
tour passengers.
COSTS AND EXPENSES
Operating expenses increased $120.6 million, or 13.3%, from 1993 to 1994.
Cruise operating costs increased by $113.4 million, or 14.5%, to $896.3 million
in 1994 from $782.8 million in 1993. Cruise operating costs increased primarily
due to costs associated with the increased capacity in 1994.
Selling and administrative expenses increased $15.3 million, or 7.3%, from
1993 to 1994. These increases were attributable to additional advertising and
other costs associated primarily with the increase in capacity.
Depreciation and amortization increased by $17.3 million, or 18.5%, to
$110.6 million in 1994 from $93.3 million in 1993. Depreciation and amortization
increased primarily due to the additional capacity discussed above. Also, the
depreciable lives of four of the Carnival ships built in the 1980s were extended
from 20 or 25 years to 30 years to conform to industry standards. This resulted
in a reduction of depreciation of approximately $4 million during 1994.
NONOPERATING INCOME (EXPENSE)
Total nonoperating expense (net of nonoperating income) increased in 1994 to
$61.9 million from $29.5 million in 1993. Interest income decreased to $8.7
million in 1994 from $11.5 million in 1993 due to a lower level of investments
in 1994. Interest expense increased to $73.3 million in 1994 from $58.9 million
in 1993 as a result of increased debt levels. Both the lower investment levels
and higher debt levels were the result of expenditures made in connection with
the ongoing construction and delivery of cruise ships. Capitalized interest
decreased to $21.9 million in 1994 from $24.6 million in 1993.
17
<PAGE>
Other expenses increased to $9.1 million in 1994 because of two events which
occurred during 1994 which are discussed in the nonoperating income (expense)
section for the fiscal year ended November 30, 1995 compared to fiscal year
ended November 30, 1994, above.
Income tax expense increased to $10.1 million in 1994, primarily as a result
of taxes, of approximately $3.0 million on a dividend paid by the tour company,
a U.S. company, to its parent company, a foreign shipping company.
LIQUIDITY AND CAPITAL RESOURCES
SOURCES AND USES OF CASH
The Company's business provided $587.2 million of net cash from operations
during the year ended November 30, 1995 (an increase of 9.3% over the comparable
period in 1994) and $656.2 million of net cash from operations during the nine
months ended August 31, 1996 (an increase of 25.6% over the comparable period in
1995). The increase in fiscal 1995 was primarily the result of higher net income
for the period. The increase during the nine months ended August 31, 1996 was
primarily the result of an increase in net income and changes in working capital
accounts.
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 during fiscal 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 and made
borrowings of $269 million under its $750 million revolving credit facility due
2000 (the "$750 Million Revolver").
During fiscal 1995 and the nine months ended August 31, 1996, the Company
spent approximately $484 million and $514 million, respectively, on capital
projects. During fiscal 1995, $432 million was spent in connection with its
ongoing shipbuilding program, and $34 million was spent on the purchase and
expansion of the Company's shore side operations facilities located in Miami,
Florida. During the nine months ended August 31, 1996, $447 million was spent in
connection with the Company's ongoing ship-building program, and $36 million was
spent on the expansion of the Company's shore side operations facilities located
in Miami, Florida.
The Company also made scheduled principal payments during fiscal 1995,
totaling approximately $79.6 million, under various individual vessel mortgage
loans and repaid $322 million of the outstanding balance on the $750 Million
Revolver. During the nine months ended August 31, 1996, the Company made
scheduled principal payments totaling approximately $43 million under various
individual vessel mortgage loans and a repayment of $160 million on the $750
Million Revolver. During the nine months ended August 31, 1996, the Company
borrowed and repaid $475 million under the $750 Million Revolver for the final
payment on the Inspiration and the Veendam.
Additionally, approximately $70 million of the Company's $115 million of
Convertible Notes were converted into approximately four million shares of the
Company's Class A Common Stock during the nine months ending August 31, 1996.
During the year ended November 30, 1995 and the nine months ended August 31,
1996, the Company paid cash dividends of approximately $85 million and $77
million, respectively.
In October 1995, the Company purchased $101 million face amount of NCL Bonds
for $81 million. In February 1996, the Company sold an option to NCL Holding AS,
the parent company of Norwegian Cruise Line, Ltd. (formerly named Kloster Cruise
Ltd.), to purchase the NCL Bonds. The
18
<PAGE>
option was exercised in April 1996, and the Company sold the NCL Bonds to NCL
Holding AS. The transaction resulted in a small gain.
In April 1996, the Company acquired a 29.5% interest in Airtours. The
Company paid approximately $163 million in cash and funded the remaining $144
million through the issuance of 5,301,186 shares of the Company's Class A Common
Stock. The Company borrowed $168 million under a $200 million multi-currency
revolving credit facility due 2001 (the "$200 Million Multi-currency Revolver")
to fund the cash portion of the Airtours investment described above.
FUTURE COMMITMENTS
The Company is scheduled to take delivery of seven new vessels over the next
three years. The Company will pay approximately $374 million in the twelve month
period ending August 31, 1997 related to the construction and delivery of ships
and $1.7 billion beyond August 31, 1997. In addition, the Company has $1.1
billion of outstanding long-term debt and convertible notes of which
approximately $73 million is due in the twelve month period ending August 31,
1997. The Company also enters into forward foreign currency contracts and
interest rate swap agreements to hedge the impact of foreign currency and
interest rate fluctuations. See "Special Note Regarding Forward-Looking
Statements."
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 revolving credit facilities and/or through the
issuance of long-term debt in the public or private markets. At August 31, 1996,
approximately $725 million was available for borrowing by the Company under the
$750 Million Revolver, $34 million was available under the $200 Million
Multi-currency Revolver and an additional $250 million was available under a
short-term general purpose revolving credit facility (the "$250 Million
Revolver"). The Company intends to initiate a $1 billion commercial paper
program that is supported by the $750 Million Revolver and the $250 Million
Revolver.
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 $200 Million Multi-Currency Revolver, the $750 Million Revolver, the
$250 Million Revolver, or the commercial paper program, 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 August 31,
1996, the Company had issued $230 million of debt securities under the shelf. A
balance of $270 million aggregate principal amount of debt or equity securities
remains available for issuance under the Shelf Registration.
19
<PAGE>
BUSINESS
The Company is the world's largest multiple-night cruise company based on
the number of passengers carried and revenues generated. The Company offers a
broad range of cruise products, serving the contemporary cruise market through
Carnival Cruise Lines, the premium market through Holland America Line and the
luxury market through Windstar Cruises and the Company's joint venture, Seabourn
Cruise Line. In total, the Company owns and operates 21 cruise ships (not
including three ships held through the Seabourn joint venture) with an aggregate
capacity of 28,195 passengers based on two passengers per cabin. The Company
also operates a tour business through Holland America Westours.
Certain statements under this heading "Business" constitute "forward-looking
statements" under the Reform Act. See "Special Note Regarding Forward-Looking
Statements."
CRUISE SHIP SEGMENT
INDUSTRY
The passenger cruise industry as it exists today began in approximately
1970. Over time, the industry has evolved from a trans-ocean carrier service
into a vacation alternative to land-based resorts and sight-seeing destinations.
According to Cruise Lines International Association ("CLIA"), an industry trade
group, approximately 500,000 North American passengers took cruises in 1970 for
three consecutive nights or more. CLIA estimates that this number reached 4.4
million passengers in 1995, an average compound annual growth rate of 9% since
1970. Also, according to CLIA, by the end of 1995 the number of ships in service
totaled 124 with an aggregate capacity of approximately 106,000 berths.
CLIA estimates that the number of cruise passengers will grow to 4.8 million
in 1996. CLIA also projects that by the end of 1996, North America will be
served by 120 vessels having an aggregate capacity of approximately 112,000
berths.
The following table sets forth the North American industry and Company
growth over the past five years based on passengers carried for at least three
consecutive nights:
<TABLE>
<CAPTION>
NORTH AMERICAN COMPANY CRUISE
CRUISE PASSENGERS
YEAR PASSENGERS CARRIED
- ----------------------------------------- -------------- --------------
<S> <C> <C>
CALENDAR (FISCAL)
1995..................................... 4,378,000 1,543,000
1994..................................... 4,448,000 1,354,000
1993..................................... 4,480,000 1,154,000
1992..................................... 4,136,000 1,153,000
1991..................................... 3,979,000 1,100,000
</TABLE>
- ------------
Source: CLIA.
From 1991 through 1995, the Company's average compound annual growth rate in
number of passengers carried was 8.8% versus the industry average of 2.0%.
The Company's passenger capacity has grown from 17,973 at November 30, 1991
to 28,195 at August 31, 1996. The delivery of the Statendam, Sensation and
Maasdam in 1993 increased capacity by 4,572 passengers, more than offsetting a
capacity decrease of 906 passengers related to the sale of the Mardi Gras in
that year. During 1994, net capacity increased by 2,369 passengers due to the
delivery of the Fascination and Ryndam, net of the 937 decrease in
20
<PAGE>
passenger capacity related to the sale of the FiestaMarina. In 1995, with the
delivery of the Imagination, capacity increased by 2,040. To date in 1996, net
capacity increased by 2,158 passengers due to the delivery of the Inspiration
and the Veendam, net of the 1,146 decrease in passenger capacity related to the
charter of the Festivale to Dolphin Cruise LIne. See "--Other Cruise
Activities".
In spite of the cruise industry's growth since 1970, the Company believes
cruises represent only approximately 2% of the applicable North American
vacation market, defined as persons who travel for leisure purposes on trips of
three nights or longer involving at least one night's stay in a hotel. Only an
estimated 7% of the North American population has ever cruised.
CRUISE SHIPS AND ITINERARIES
Under the Carnival Cruise Lines name, the Company serves the contemporary
market with ten ships (collectively, the "Carnival Ships"). All of the Carnival
Ships were designed by and built for Carnival, including nine SuperLiners which
are among the largest in the cruise industry. Eight of the Carnival Ships
operate in the Caribbean and two Carnival Ships call on ports in the Mexican
Riviera. During 1996, the Carnival ship Tropicale began operating in Alaska
during the summer season. Carnival also offers cruises through the Panama Canal
and to the Hawaiian Islands. See "--Sales and Marketing."
Through its subsidiary, HAL, the Company operates eleven ships offering
premium or luxury specialty vacations. Eight of these ships, the Rotterdam, the
Nieuw Amsterdam, the Noordam, the Westerdam, the Statendam, the Maasdam, the
Ryndam and the Veendam are operated under the Holland America Line name (the
"HAL Ships"). The remaining three ships, the Wind Star, the Wind Song and the
Wind Spirit, are operated under the Windstar Cruises name (the "Windstar
Ships"). Seven of the HAL Ships were designed by and built for HAL. The three
Windstar Ships were built for Windstar Sail Cruises, Ltd. ("WSCL") between 1986
and 1988.
HAL offers premium cruises of various lengths in the Caribbean, Alaska,
Panama Canal, Europe, the Mediterranean, Hawaii, Mexico, South Pacific, South
America and the Orient. Cruise lengths for HAL vary from one to 99 days, with a
large proportion being seven or ten days in length. Periodically, the HAL Ships
make longer grand cruises or operate on short-term special itineraries. For
example, in 1996, the Rotterdam made a 50-day world cruise and a 99-day Grand
South America voyage. HAL will continue to offer these special and longer
itineraries in order to increase travel opportunities for its customers and
strengthen its cruise offerings in view of the fleet expansion. The majority of
the HAL Ships operate in the Caribbean during fall to late spring and in Alaska
during late spring to early fall. The three Windstar Ships currently operate in
the Caribbean, the Mediterranean and the South Pacific.
21
<PAGE>
The following table presents summary information concerning the Company's
ships. Areas of operation are based on current itineraries and are subject to
change.
<TABLE>
<CAPTION>
GROSS
PASSENGER REGISTERED PRIMARY AREAS
VESSEL REGISTRY BUILT CAPACITY(1) TONS OF OPERATION
- ----------------------------------- ------------ ----- ----------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
CARNIVAL CRUISE LINES:
Inspiration........................ Panama 1996 2,040 70,367 Caribbean
Imagination........................ Panama 1995 2,040 70,367 Caribbean
Fascination........................ Panama 1994 2,040 70,367 Caribbean
Sensation.......................... Panama 1993 2,040 70,367 Caribbean
Ecstasy............................ Liberia 1991 2,040 70,367 Caribbean
Fantasy............................ Liberia 1990 2,044 70,367 Bahamas
Celebration........................ Liberia 1987 1,486 47,262 Caribbean
Jubilee............................ Panama 1986 1,486 47,262 Mexican Riviera
Holiday............................ Panama 1985 1,452 46,052 Mexican Riviera
Tropicale.......................... Liberia 1982 1,022 36,674 Caribbean, Alaska
-----------
Total Carnival Ships Capacity.... 17,690
-----------
HOLLAND AMERICA LINE:
Veendam............................ Bahamas 1996 1,266 55,451 Alaska, Caribbean
Ryndam............................. Netherlands 1994 1,266 55,451 Alaska, Caribbean
Maasdam............................ Netherlands 1993 1,266 55,451 Europe, Caribbean
Statendam.......................... Netherlands 1993 1,266 55,451 Alaska, Caribbean
Westerdam.......................... Netherlands 1986 1,494 53,872 Canada, Caribbean
Noordam............................ Netherlands 1984 1,214 33,930 Alaska, Caribbean
Nieuw Amsterdam.................... Netherlands 1983 1,214 33,930 Alaska, Caribbean
Rotterdam.......................... Netherlands 1959 1,075 37,783 Alaska, Worldwide
-----------
Total HAL Ships Capacity......... 10,061
-----------
WINDSTAR CRUISES:
Wind Spirit........................ Bahamas 1988 148 5,736 Caribbean,
Mediterranean
Wind Song.......................... Bahamas 1987 148 5,703 South Pacific
Wind Star.......................... Bahamas 1986 148 5,703 Caribbean,
Mediterranean
-----------
Total Windstar Ships Capacity.... 444
-----------
Total Capacity................... 28,195
-----------
-----------
</TABLE>
Carnival Corporation also owns the Festivale, a 1,146 berth vessel built in
196`1, which it currently charters to Dolphin Cruise Line. In addition, Holland
America Line's Rotterdam is expected to be replaced in September 1997 by the
Rotterdam VI, which is currently under construction, and the Tropicale is
expected to enter service with the HMM joint venture in the spring of 1998.
- ------------
(1) In accordance with cruise industry practice, passenger capacity is
calculated based on two passengers per cabin even though some cabins can
accommodate three or four passengers.
22
<PAGE>
CRUISE SHIP CONSTRUCTIONS
The Company is currently constructing four cruise ships to be operated under
the Carnival name and three cruise ships to be operated under the Holland
America Line name. The following table presents summary information concerning
ships under construction:
<TABLE>
<CAPTION>
EXPECTED PASSENGER APPROXIMATE
VESSEL SERVICE DATE SHIPYARD CAPACITY(1) TONS COST
- --------------------------- -------------- --------------- ----------- ------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
CARNIVAL CRUISE LINES:
Carnival Destiny........... November 1996 Fincantieri(2) 2,640 101,000 $ 430,000
Elation.................... March 1998 Masa-Yards 2,040 70,367 300,000
Paradise................... December 1998 Masa-Yards 2,040 70,367 300,000
Carnival Triumph........... July 1999 Fincantieri(2) 2,640 101,000 415,000
----------- --------------
Total Carnival Ships..... 9,360 $1,445,000
----------- --------------
HOLLAND AMERICA LINE:
Rotterdam VI............... October 1997 Fincantieri(2) 1,320 62,000 235,000
To Be Named................ February 1999 Fincantieri(2) 1,440 63,000 300,000
To Be Named................ September 1999 Fincantieri(2) 1,440 63,000 300,000
----------- --------------
Total HAL Ships.......... 4,200 835,000
----------- --------------
Total.................... 13,560 $2,280,000
----------- --------------
----------- --------------
</TABLE>
- ------------
(1) In accordance with cruise industry practice, passenger capacity is
calculated based on two passengers per cabin even though some cabins can
accommodate three or four passengers.
(2) The construction contracts with such shipyards are denominated in Italian
Lire. Contracts denominated in foreign currencies have been fixed into U.S.
Dollars through the utilization of forward currency contracts.
OTHER CRUISE ACTIVITIES
In April 1992, the Company acquired 25% of the capital stock of Seabourn
Cruise Line Limited ("Seabourn"). As part of the transaction, the Company also
made a subordinated secured ten-year loan of $15 million to Seabourn and a $10
million convertible loan to Seabourn. In December 1995, the $10 million
convertible loan was converted by the Company into an additional 25% equity
interest in Seabourn. Seabourn operates three ultra-luxury ships, which have an
aggregate capacity of 612 passengers and have itineraries in the Caribbean, the
Baltic, the Mediterranean and the Far East.
CRUISE TARIFFS
The table below sets forth certain price information for the Company's
cruises. Unless otherwise noted, brochure prices include round trip airfare from
over 175 cities in the United States and Canada. If a passenger chooses not to
have the Company provide air transportation, the ticket price is reduced.
Brochure prices vary depending on size and location of cabin, the time of year
that the voyage takes place, and when the booking is made. The cruise brochure
price includes a wide variety of activities and facilities, such as a fully
equipped casino, nightclubs, theatrical shows, movies, parties, a discotheque, a
health club and swimming pools on each ship. The brochure price also includes
numerous dining opportunities daily.
23
<PAGE>
Brochure pricing information below is per person based on double occupancy:
<TABLE>
<CAPTION>
AREA OF OPERATION CRUISE LENGTH PRICE RANGE
- ----------------------------------------------------------- ------------- --------------
<S> <C> <C>
CARNIVAL CRUISE LINES:
Caribbean.................................................. 3-day $ 579- 1,199
4-day 679- 1,369
7-day 1,399- 2,469
Mexico..................................................... 3-day 579- 1,199
4-day 679- 1,369
7-day 1,369- 2,469
HOLLAND AMERICA LINE (1):
Alaska..................................................... 7-day $ 975- 7,000
Caribbean.................................................. 7-day 1,212- 5,775
10-day 2,030- 6,000
Europe..................................................... 10- to 12-day 3,335-14,045
Panama Canal............................................... 10- to 22-day 2,795-15,400
WINDSTAR CRUISES (1):
Caribbean.................................................. 7-day $3,195- 3,295
Mediterranean.............................................. 7- to 16-day 2,695- 6,095
South Pacific.............................................. 7-day 3,195- 3,495
</TABLE>
- ------------
(1) Prices represent cruise only.
Brochure prices are regularly discounted through the Company's early booking
discount program and other promotions.
ON-BOARD AND OTHER REVENUES
The Company derives revenues from certain on-board activities and services
including casino gaming, liquor sales, gift shop sales, shore tours, photography
and promotional advertising by merchants located in ports of call.
The casinos, which contain slot machines and gaming tables including
blackjack, craps, roulette and stud poker, are open when the ships are at sea in
international waters. The Company also earns revenue from the sale of alcoholic
beverages. Certain onboard activities are managed by independent concessionaires
from which the Company collects a percentage of revenues, while certain other
activities are managed by the Company.
The Company receives additional revenue from the sale to its passengers of
shore excursions at each ship's ports of call. On the Carnival Ships, such shore
excursions are operated by independent tour operators and include bus and taxi
sight-seeing excursions, local boat and beach parties, and nightclub and casino
visits. On the HAL Ships, shore excursions are operated by Holland America
Westours and independent parties.
In conjunction with its cruise vacations on the Carnival Ships, the Company
sells pre- and post-cruise land packages. Such packages generally include one,
two or three-night vacations at locations such as Walt Disney World in Orlando,
Florida or resorts in the South Florida and the San Juan, Puerto Rico areas.
In conjunction with its cruise vacations on the HAL Ships, HAL sells
pre-cruise and post-cruise land packages which are more fully described below.
See "--Tour Segment".
24
<PAGE>
PASSENGERS
The following table sets forth the aggregate number of passengers carried
and percentage occupancy for the Company's ships for the periods indicated:
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30,
NINE MONTHS ENDED -----------------------------------
AUGUST 31, 1996 1995 1994 1993
----------------- --------- --------- ---------
<S> <C> <C> <C> <C>
Number of Passengers................. 1,351,000 1,543,000 1,354,000 1,154,000
Occupancy Percentage(1).............. 109.7% 105.0% 104.0% 105.3%
</TABLE>
- ------------
(1) In accordance with cruise industry practice, total capacity is calculated
based on two passengers per cabin even though some cabins can accommodate
three or four passengers. Occupancy percentages in excess of 100% indicate
that more than two passengers occupied some cabins.
The following table sets forth the actual occupancy percentage for all
cruises on the Company's ships for each quarter since the third quarter of
fiscal 1994:
<TABLE>
<CAPTION>
OCCUPANCY
QUARTER ENDING PERCENTAGE
- -------------------------------------------------------------- ----------
<S> <C>
August 31, 1996............................................... 114.5%
May 31, 1996.................................................. 107.2
February 28, 1996............................................. 107.1
November 30, 1995............................................. 104.6
August 31, 1995............................................... 114.6
May 31, 1995.................................................. 100.3
February 28, 1995............................................. 99.9
November 30, 1994............................................. 100.9
August 31, 1994............................................... 113.4
</TABLE>
SALES AND MARKETING
The Company's products are positioned to appeal to the contemporary, premium
and luxury specialty segments. The luxury specialty segment, which is not as
large as the other segments, is served by cruises with per diems of $300 or
higher. The premium segment typically is served by cruises that last for seven
to 14 days or more at per diem rates of $250 or higher, and appeal principally
to more affluent customers. The contemporary segment, on the other hand, is
served typically by cruises that are seven days or shorter in length, are priced
at per diem rates of $200 or less, and feature a casual ambience. The Company
believes that the success and growth of the Carnival cruises is attributable in
large part to its early recognition of this market segmentation and its efforts
to reach and promote the expansion of the contemporary segment.
Carnival believes that its success is due in large part to its unique
product positioning within the industry. Carnival markets the Carnival Ship
cruises not only as alternatives to competitors' cruises, but as vacation
alternatives to land-based resorts and sight-seeing destinations. Carnival seeks
to attract passengers from the broad vacation market, including those who have
never been on a cruise ship before and who might not otherwise consider a cruise
as a vacation alternative. Carnival's strategy has been to emphasize the cruise
experience itself rather than particular destinations, as well as the advantages
of a prepaid, all-inclusive vacation package. Carnival markets the Carnival Ship
cruises as the "Fun Ships(R)" experience, which includes a wide variety of
shipboard activities and entertainment, such as full-scale casinos and
nightclubs, an atmosphere of pampered service and unlimited food.
25
<PAGE>
The Company markets the Carnival Ships as the "Fun Ships(R)" and uses the
themes "Carnival's Got the Fun(R)" and "The Most Popular Cruise Line in the
World(R)", among others. Carnival advertises nationally directly to consumers on
network television and through extensive print media featuring its spokesperson,
Kathie Lee Gifford. Carnival believes its advertising generates interest in
cruise vacations generally and results in a higher degree of consumer awareness
of the "Fun Ships(R)" concept and the "Carnival(R)" name. Substantially all of
Carnival's cruise bookings are made through travel agents, which arrangement is
encouraged as a matter of policy. In fiscal 1995, Carnival took reservations
from about 29,000 of approximately 45,000 travel agencies in the United States
and Canada. Travel agents receive a standard commission of 10% (15% in the State
of Florida), plus the potential of an additional commission based on sales
volume. Moreover, because cruise vacations are substantially all-inclusive,
sales of Carnival cruise vacations yield a significantly higher commission to
travel agents than selling air tickets and hotel rooms. During fiscal 1995, no
one travel agency accounted for more than 2% of Carnival's revenues.
Carnival engages in substantial promotional efforts designed to motivate and
educate retail travel agents about its "Fun Ships(R)" cruise vacations. Carnival
employs approximately 90 field sales representatives and 30 in-house service
representatives to motivate independent travel agents and promote its cruises.
Carnival believes it has the largest sales force in the industry.
To facilitate access and to simplify the reservation process, Carnival
employs approximately 360 reservation agents to take bookings from independent
travel agents. Carnival's fully-automated reservation system allows its
reservation agents to respond quickly to book cabins on its ships. Carnival has
a policy of pricing comparable cabins (based on size, location and length of
voyage) on its various ships at the same rate ("common rating"). Such common
rate includes round-trip airfare, which means that any passenger can fly from
any one of over 140 cities in the United States and Canada to ports of
embarkation for the same price. Through common rating, Carnival is able to offer
customers a wider variety of voyages for the same price, which the Company
believes improves occupancy on all its cruises. However, discounts from brochure
prices may vary depending upon the ship, intinerary, time of year and demand for
each cruise.
Carnival's cruises generally are substantially booked several months in
advance of the sailing date. This lead time allows Carnival to adjust its
prices, if necessary, in relation to demand for available cabins, as indicated
by the level of advance bookings. Carnival's SuperSaver fares, introduced
several years ago, are designed to encourage potential passengers to book cruise
reservations earlier, which helps the Company to more effectively manage yields
(pricing and occupancy). Carnival's payment terms require that a passenger pay
approximately 15% of the cruise price within seven days of the reservation date
and the balance not later than 45 days before the sailing date for three- and
four-day cruises and 60 days before the sailing date for seven-day cruises.
The HAL and Windstar Ships cater to the premium and luxury specialty
markets, respectively. The Company believes that the hallmarks of the HAL
experience are beautiful ships and gracious attentive service. HAL communicates
this difference as "A Tradition of Excellence(R)", a reference to its long
standing reputation as a first class and grand cruise line.
Substantially all of HAL's bookings are made through travel agents, which
arrangement HAL encourages as a matter of policy. In fiscal 1995, HAL took
reservations from about 20,000 of approximately 45,000 travel agencies in the
United States and Canada. Travel agents receive a standard commission of between
10% and 15%, depending on the specific cruise product sold, with the potential
for override commissions based upon sales volume. During 1995, no one travel
agency accounted for more than 1% of HAL's total revenue.
HAL has focused much of its recent sales effort at creating an excellent
relationship with the travel agency community. This is related to the HAL
marketing philosophy that travel agents have a
26
<PAGE>
large impact on the consumer cruise selection process, and will recommend HAL
more often because of its excellent reputation for service to both consumers and
independent travel agents. HAL solicits continuous feedback from consumers and
the independent travel agents making bookings with HAL to insure they are
receiving excellent service.
HAL's marketing communication strategy is primarily composed of newspaper
and magazine advertising, large scale brochure distribution and direct mail
solicitations to past passengers (referred to as "alumni") and television. HAL
engages in substantial promotional efforts designed to motivate and educate
retail travel agents about its products. HAL employs approximately 50 field
sales representatives, 15 teleaccount sales representatives and 15 sales and
service representatives to support the field sales force. Carnival's field sales
representatives also promote HAL products. To facilitate access to HAL and to
simplify the reservation process for the HAL ships, HAL employs approximately
260 reservation agents to take bookings from travel agents. HAL's cruises
generally are booked several months in advance of the sailing date. The Company
solicits current and former passengers of the Carnival Ships to take future
cruises on the HAL and Windstar Ships.
Windstar Cruises has its own marketing and reservations staff. Field sales
representatives for both HAL and Carnival act as field sales representatives for
Windstar. Marketing efforts are primarily devoted to (a) travel agent support
and awareness, (b) direct mail solicitation of past passengers, and (c)
distribution of brochures. The marketing features the distinctive nature of the
graceful, modern sail ships and the distinctive "casually elegant" experience on
"intimate itineraries" (apart from the normal cruise experience). Windstar's
cruise market positioning is embodied in the phrase "180 deg. from ordinary".
SEASONALITY
The Company's revenue from the sale of passenger tickets for the Carnival
Ships is moderately seasonal. Historically, demand for Carnival cruises has been
greater during the periods from late June through August. Demand traditionally
is lower during the period from September through mid-December and during May.
To allow for full availability during peak periods, drydocking maintenance is
usually performed in September, October and early December. 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 and Europe
and HAL typically obtains higher prices for these summer products. Demand for
HAL cruises is lower during the winter months when HAL ships sail in more
competitive markets.
COMPETITION
Cruise lines compete for consumer disposable leisure time dollars with other
vacation alternatives such as land-based resort hotels and sight-seeing
destinations, and public demand for such activities is influenced by general
economic conditions.
The Carnival Ships compete with cruise ships operated by six different
cruise lines which operate year round from Florida, California and Puerto Rico
with similar itineraries and with ten other cruise lines operating seasonally
from other ports in Florida, California, and Puerto Rico, including cruise ships
operated by HAL. Competition for cruise passengers in South Florida is
substantial. Ships operated by Royal Caribbean Cruise Line and Norwegian Cruise
Line sail regularly from Miami on itineraries similar to those of the Carnival
Ships. Carnival competes year round with ships operated by Royal Caribbean
Cruise Line and Princess Cruises embarking from Los Angeles to the west coast of
Mexico. Cruise lines such as Norwegian Cruise Lines, Royal Caribbean Cruise
Line, Costa Cruise Lines, Cunard and Princess Cruises offer voyages competing
with Carnival from San Juan to the Caribbean.
27
<PAGE>
In the Alaska market, HAL and Carnival compete directly with cruise ships
operated by ten different cruise lines with the largest competitors being
Princess Cruises and Royal Caribean Cruise Lines. Over the past several years,
there has been a steady increase in the available capacity among all cruise
lines in the Alaska market.
In the Caribbean market, HAL competes with cruise ships operated by 16
different cruise lines, its primary competitors being Princess Cruises, Royal
Caribbean Cruise Line and Norwegian Cruise Line, as well as the Carnival Ships.
GOVERNMENTAL REGULATION
The Ecstasy, Fantasy, Celebration and Tropicale are Liberian flagged ships,
the Festivale is a Bahamian flagged ship, and the balance of the Carnival Ships
are registered in Panama. The, Ryndam, Maasdam, Statendam, Westerdam, Noordam,
Nieuw Amsterdam and Rotterdam are registered in the Netherlands, while the
Veendam is flagged in the Bahamas. The Windstar Ships are registered in the
Bahamas. The ships are subject to inspection by the United States Coast Guard
for compliance with the Convention for the Safety of Life at Sea and by the
United States Public Health Service for sanitary standards. The Company is also
regulated by the Federal Maritime Commission, which, among other things,
certifies ships on the basis of the ability of the Company to meet obligations
to passengers for refunds in case of non-performance. The Company believes it is
in compliance with all material regulations applicable to its ships and has all
licenses necessary to the conduct of its business. In connection with a
significant portion of its Alaska cruise operations, HAL relies on a concession
permit from the National Park Service to operate its cruise ships in Glacier Bay
National Park, which is periodically renewed. There can be no assurance that the
permits will continue to be renewed or that regulations relating to the renewal
of such permits, including preference rights, will remain unchanged in the
future.
The International Maritime Organization has adopted safety standards as part
of the "Safety of Life at Sea" ("SOLAS") Convention, applicable generally to all
passenger ships carrying 36 or more passengers. Generally, SOLAS imposes
enhanced vessel structural requirements designed to improve passenger safety.
The SOLAS requirements are phased in through the year 2010. However, certain
stringent SOLAS fire safety requirements must be implemented by 1997. Only two
of the Company's vessels, the Festivale (which is chartered to Dolphin Cruise
Line) and the Rotterdam are expected to be significantly affected by the SOLAS
1997 requirements. The Rotterdam will be retired from service effective
September 30, 1997. The decision regarding the additional SOLAS related
investment for the Festivale has not yet been made, but such expenditures would
not be material to the Company.
Public Law 89-777 administered by the Federal Maritime Commission ("FMC")
requires most cruise line operators to establish financial responsibility for
nonperformance of transportation. The FMC's regulations require that a cruise
line demonstrate its financial responsibility through a guaranty, escrow
arrangement, surety bond, insurance or self-insurance. Currently, the amount
required must equal 110% of the cruise line's highest amount of customer
deposits over a two-year period up to a maximum coverage level of $15 million
subject to a sliding scale. The FMC has proposed increasing the coverage
requirements under the FMC regulations. The proposed new regulations are viewed
favorably by the Company and are not expected to have a material effect on the
Company. The FMC has received public comments regarding the proposed regulations
and may take final action at any time.
From time to time various other regulatory and legislative changes have been
or may in the future be proposed that could have an effect on the cruise
industry in general.
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<PAGE>
TOUR SEGMENT
In addition to its cruise business, HAL markets sight-seeing tours
separately and as a part of cruise/tour packages under the Holland America
Westours name. Tour operations are based in Alaska, Washington State and western
Canada. Since a substantial portion of Holland America Westours' business is
derived from the sale of tour packages in Alaska during the summer tour season,
tour operations are highly seasonal.
HOLLAND AMERICA WESTOURS
Holland America Westours is a wholly-owned subsidiary of HAL. The group of
subsidiaries which together comprise the tour operations perform three
independent yet interrelated functions. During 1995, as part of an integrated
travel program to destinations in Alaska, the tour service group offered 35
different tour programs varying in length from seven to 19 days. The
transportation group and hotel group support the tour service group by supplying
facilities needed to conduct tours. Facilities include dayboats, motor coaches,
rail cars and hotels.
Two luxury dayboats perform an important role in the integrated Alaska
travel program offering tours to the glaciers and fjords of Alaska and the Yukon
River. The Yukon Queen cruises the Yukon River between Dawson City, Yukon
Territory and Eagle, Alaska and the Ptarmigan operates on Portage Lake in
Alaska. The two dayboats have a combined capacity of 249 passengers.
A fleet of over 290 motor coaches using the trade name Gray Line operates in
Alaska, Washington and western Canada. These motor coaches are used for extended
trips, city sight-seeing tours and charter hire. HAL conducts its tours both as
part of a cruise/tour package and as individual sight-seeing products sold under
the Gray Line name. In addition, HAL operates express Gray Line motor coach
service between downtown Seattle and the Seattle-Tacoma International Airport.
Thirteen private domed rail cars, which are called "McKinley Explorers", run
on the Alaska railroad between Anchorage and Fairbanks, stopping at Denali
National Park.
In connection with its tour operations, HAL owns or leases motor coach
maintenance shops in Seattle, and at Juneau, Denali Park, Fairbanks, Anchorage,
Skagway and Ketchikan in Alaska. HAL also owns or leases service offices at
Anchorage, Fairbanks, Juneau, Ketchikan and Skagway in Alaska, at Whitehorse in
the Yukon Territory, in Seattle and at Vancouver in British Columbia. Certain
real property facilities on federal land are used in HAL's tour operations
pursuant to permits from the applicable federal agencies.
WESTMARK HOTELS
HAL owns and/or operates 16 hotels in Alaska and the Canadian Yukon under
the name Westmark Hotels. Four of the hotels are located in Canada's Yukon
Territory and offer a combined total of 585 rooms. The remaining 12 hotels, all
located throughout Alaska, provide a total of 1,649 rooms, bringing the total
number of hotel rooms to 2,234.
The hotels play an important role in HAL's tour program during the summer
months when they provide accommodations to the tour passengers. The hotels
located in the larger metropolitan areas remain open during the entire year,
acting during the winter season as centers for local community activities while
continuing to accommodate the traveling public. HAL hotels include dining,
lounge and conference or meeting room facilities. Certain hotels have gift shops
and other tourist services on the premises.
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The hotels are summarized in the following table:
<TABLE>
<CAPTION>
OPEN DURING
HOTEL NAME LOCATION ROOMS 1996 SEASON
- ------------------------------------------------------- ------------ ----- -----------
<S> <C> <C> <C>
ALASKA HOTELS:
Westmark Anchorage................................... Anchorage 198 year-round
Westmark Inn......................................... Anchorage 90 seasonal
Westmark Inn......................................... Fairbanks 173 seasonal
Westmark Fairbanks................................... Fairbanks 238 year-round
Westmark Juneau...................................... Juneau 105 year-round
The Baranof.......................................... Juneau 193 year-round
Westmark Cape Fox.................................... Ketchikan 72 year-round
Westmark Kodiak...................................... Kodiak 81 year-round
Westmark Shee Atika.................................. Sitka 101 year-round
Westmark Inn Skagway................................. Skagway 209 seasonal
Westmark Tok......................................... Tok 92 seasonal
Westmark Valdez...................................... Valdez 97 year-round
CANADIAN HOTELS (YUKON TERRITORY):
Westmark Inn......................................... Beaver Creek 174 seasonal
Westmark Klondike Inn................................ Whitehorse 99 seasonal
Westmark Whitehorse.................................. Whitehorse 181 year-round
Westmark Inn......................................... Dawson 131 seasonal
</TABLE>
Thirteen of the hotels are owned by a HAL subsidiary. The remaining three
hotels, Westmark Anchorage, Westmark Cape Fox and Westmark Shee Atika, are
operated by Westmark under arrangements involving third parties such as
management agreements and leases.
For the hotels that operate year-round, the occupancy percentage for 1995
was 58.9%, and for the hotels that operate only during the summer months, the
occupancy percentage for 1995 was 76.7%.
SEASONALITY
The Company's tour revenues are extremely seasonal with a large majority
generated during the late spring and summer months in connection with the Alaska
cruise season. Holland America Westours' tours are conducted in Washington and
Alaska. The Alaska tours coincide to a great extent with the Alaska cruise
season, May through September. Washington tours are conducted year-round
although demand is greatest during the summer months. During periods in which
tour demand is low, HAL seeks to maximize its motor coach charter activity such
as operating charter tours to ski resorts in Washington and Canada.
SALES AND MARKETING
HAL tours are marketed both separately and as part of cruise-tour packages.
Although most HAL cruise-tours include a HAL cruise as the cruise segment, other
cruise lines also market HAL tours as a part of their cruise tour packages and
sight-seeing excursions. Tours sold separately are marketed through independent
travel agents and also directly by HAL, utilizing sales desks in major hotels.
General marketing for the hotels is done through various media in Alaska, Canada
and the continental United States. Travel agents, particularly in Alaska, are
solicited, and displays are used
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in airports in Seattle, Washington, Portland, Oregon and various Alaskan cities.
Rates at Westmark Hotels are on the upper end of the scale for hotels in Alaska
and the Canadian Yukon.
CONCESSIONS
Certain tours in Alaska are conducted on federal property requiring
concession permits from the applicable federal agencies such as the National
Park Service or the United States Forest Service.
COMPETITION
Holland America Westours competes with independent tour operators and motor
coach charter operators in Washington, Alaska and the Canadian Rockies. The
primary competitors in Alaska are Princess Tours (which owns approximately 130
motor coaches and three hotels) and Alaska Sightseeing/Trav-Alaska (which owns
approximately 43 motor coaches). The primary competitor in Washington is Gazelle
(with approximately 18 motor coaches). The primary competitors in the Canadian
Rockies are Tauck Tours, Princess Tours and Brewster Transportation.
Westmark Hotels compete with various hotels throughout Alaska, including the
Super 8 national motel chain, many of which charge prices below those charged by
HAL. Dining facilities in the hotels also compete with the many restaurants in
the same geographic areas.
GOVERNMENT REGULATION
HAL's motor coach operations are subject to regulation both at the federal
and state levels, including primarily the U.S. Department of Transportation, the
Washington Utilities Department of Transportation, the British Columbia Motor
Carrier Commission and the Alaska Department of Transportation. Certain of HAL's
tours involve federal properties and are subject to regulation by various
federal agencies such as the National Park Service, the Federal Maritime
Administration and the U.S. Forest Service.
In connection with the operation of its beverage facilities in the Westmark
Hotels, HAL is required to comply with state, county and/or city ordinances
regulating the sale and consumption of alcoholic beverages. Violations of these
ordinances could result in fines, suspensions or revocation of such licenses and
preclude the sale of any alcoholic beverages by the hotel involved.
In the operation of its hotels, HAL is required to comply with applicable
building and fire codes. Changes in these codes have in the past and may in the
future, require substantial capital expenditures to insure continuing compliance
such as the installation of sprinkler systems.
AIRTOURS
In April 1996, the company acquired a 29.5% interest in Airtours for
approximately $307 million. Airtours is a leisure travel company publicly traded
on the London Stock Exchange and provides air inclusive packaged holidays to the
British, Scandinavian and North American markets. Airtours provides holidays to
approximately 4.4 million people per year and owns or operates 41 hotels, 3
cruise ships and 31 aircraft.
Airtours was founded in the United Kingdom in 1972 and is currently the
second largest provider of air inclusive packages in the United Kingdom. In
1994, Airtours entered the Scandinavian market via the acquisition of the
Scandinavian Leisure Group and expanded its share of this market in 1996 with
the acquisition of Spies. In 1995 Airtours acquired Sunquest Vacations, a
Canadian tour operator. Today Airtours is the market leader in Scandinavia and
is one of Canada's leading tour operators.
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<PAGE>
Airtours principal brands in the United Kingdom are Airtours, Aspro and
Tradewinds. Airtours and Aspro offer packaged tours on charter flights primarily
to the Mediterranean, Canary Islands, Caribbean and Florida. Tradewinds focuses
on long haul destinations and offers scheduled flights. In addition , Eurosites
provides self drive camping holidays mainly to the south of France. Eurosites is
also sold in Germany, Holland and Denmark.
In Scandinavia, Airtours' primary brands are Ving, Spies, Tjacreborg, Saga
and Always. Each brand is focused on a particular segment of the Scandinavian
market and primarily provides holidays to the Mediterranean and Canary Islands.
Sunquest and Alba are Airtours main brands in Canada and their principal
destinations are the Caribbean, the United States and Mexico. In contrast to the
United Kingdom and Scandinavia, Canada's peak season is the winter. Alba also
offers a summer program to Italy.
Under the Going Places brand, Airtours owns over 700 retail travel branches,
most of which offer foreign exchange facilities. Going Places is the second
largest travel agency in the United Kingdom and distributes Airtours's own
products together with those of other tour operators. In 1994, Airtours acquired
Late Escapes, a telephone sales business specializing in the sale of vacations
within eight weeks of departure.
Airtours operates 18 aircraft exclusively for its U.K. tour operators
providing a large proportion of their flying requirements. In addition,
Airtours' subsidiary Premiair operates a fleet of 13 aircraft, which provides
most of the flying requirements for Airtours' Scandinavian tour operators.
Airtours owns or operates 41 hotels (6,500 rooms) which provide rooms to
Airtours' tour operators principally in the Mediterranean and the Canary
Islands. 16 of the hotels are marketed by Airtours' tour operators under the
exclusive Sunwing brand. In addition, Airtours has a 50% interest in Tenerife
Sol, a joint venture with Sol Hotels Group of Spain, which owns and operates
three hotels in the Canary Islands providing 1,300 rooms.
Through its subsidiary Sun Cruises, Airtours owns and operates two cruise
ships. Both the 800-berth MS Seawing and the 1,062-berth MS Carousel commenced
operations in 1995. Recently, Airtours acquired a third ship, the MS Song of
Norway, which is a sister ship of the MS Carousel. The MS Song of Norway is
expected to commence operations in May 1997. The ships operate in the
Mediterranean, the Caribbean and around the Canary Islands and are sold
exclusively by Airtours' tour operators.
LITIGATION
Wartsila Marine Industries Incorporated ("Wartsila") operated a Finnish
shipyard and had contracted to build three ships for the Company in the late
1980s. Wartsila filed for bankruptcy in 1989 without completing construction of
the vessels, causing the Company to incur incremental costs to complete the
ships and to lose profits because of the delay in their delivery. During 1995,
the Company received $40 million in cash from the settlement of litigation with
Metra Oy, the former parent company of Wartsila, related to losses suffered in
connection with the construction of these three ships. Of the $40 million
received, $6.2 million was used to pay related legal fees, $14.4 million was
recorded as other income and $19.4 million was used to reduce the cost basis of
certain ships which had been the subject of the Company's lawsuit against Metra
Oy.
On June 25, 1996, the Company reached an agreement with the trustees of
Wartsila and creditors for the bankruptcy which resulted in an additional cash
payment of approximately $80 million. Of the $80 million received, $5 million
was used to pay certain costs, $32 million was recorded as other income and $43
million was used to reduce the cost basis of certain ships which had been
affected by the bankruptcy.
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<PAGE>
The United States Attorney for the District of Alaska has commenced an
investigation to determine if a Holland America Line vessel discharged bilge
water, alleged to have contained oil or oily mixtures, at various locations
allegedly within United States territorial waters at various times during the
summer and early fall of 1994. It is unknown whether any proceedings will be
initiated and, if so, what violations will be alleged. To date, no penalties
have been sought or imposed. Management does not believe that the amount of
potential penalties will have a material impact on the Company.
In April 1996, a complaint was filed in the Circuit Court of the Eleventh
Judicial Circuit against the Company and a complaint was filed in the Superior
Court of Washington against Holland America Westours (the "Port Charges
Complaints"). The Port Charges Complaints, brought on behalf of a purported
class of all persons who traveled on a Company ship within the past four years
and paid "Port Charges" to the Company, allege that statements made by the
Company in advertising and promotional materials concerning Port Charges were
false and misleading. The Port Charges Complaints allege claims of negligent
misrepresentation and unjust enrichment and violations of the Washington
Consumer Protection Act and seek unspecified compensatory damages on behalf of
the purported class (or, alternatively, refunds of Port Charges allegedly in
excess of certain charges levied by governmental authorities), attorney's fees
and costs and punitive damages and injunctive relief. Two other complaints
containing allegations similar to those set forth in the Port Charges Complaints
have been filed in the Circuit Court of the Eleventh Judicial Circuit against
the Company since the filing of the Port Charges Complaints.
In June and August 1996, respectively, two complaints were filed against
both the Company and Holland America Westours in the Superior Court for the
State of California for the County of Los Angeles (the "Travel Agent
Complaints"). The Travel Agent Complaints, brought on behalf of a class of all
travel agencies who during the past four years booked a cruise with the Company,
contain allegations that the Company's advertising practices regarding Port
Charges resulted in an improper and concealed form of commission bypass. The
Travel Agent Complaints allege claims of breach of contract, negligent
misrepresentation, unjust enrichment, unlawful business practices and common law
fraud and seek unspecified compensatory damages (or alternatively, the payment
by the Company of usual and customary commissions on Port Charges in excess of
certain charges levied by government authorities), attorneys' fees and costs,
punitive damages and injunctive relief.
The Port Charges Complaints and the Travel Agent Complaints are in
preliminary stages and it is not now possible to determine the ultimate outcome
of the lawsuits. Management of the Company believes that the Company has
substantial and meritorious defenses to the claims and intends to vigorously
defend the lawsuits. Management understands that purported class action lawsuits
similar to the Port Charges Complaints and the Travel Agent Complaints have been
filed against five other cruise lines.
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.
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<PAGE>
SELLING SHAREHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Class A Common Stock as of November 11, 1996, and as adjusted
to reflect the sale of the Shares offered hereby, for the Selling Shareholders:
<TABLE>
<CAPTION>
SHARES OF CLASS A SHARES OF CLASS A
COMMON STOCK COMMON STOCK TO BE
BENEFICIALLY OWNED BENEFICIALLY OWNED
BEFORE SALE UNDER THIS AFTER SALE UNDER THIS
PROSPECTUS PROSPECTUS
NAME OF SELLING ----------------------- SHARES TO BE -----------------------
SHAREHOLDER NUMBER PERCENTAGE SOLD NUMBER PERCENTAGE
- ----------------------------------- ---------- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
Ted Arison(1)...................... 74,289,600 31.0% 15,225,000(2) 59,064,600 24.7%
Arison Foundation, Inc.(3)......... 3,175,000 1.3% 3,175,000 0 0%
The Royal Bank of Scotland
Trust Company (Jersey) Limited,
as Trustee for the
Ted Arison Charitable Trust....... 1,900,000 (5) 1,900,000 0 0%
New World Symphony
Supporting Foundation, Inc........ 1,300,000(4) (5) (4) 1,300,000(4) (5)
---------- ----- ------------ ---------- ----------
79,364,600 33.1% 20,300,000 59,064,600 24.7%
---------- ----- ------------ ---------- ----------
---------- ----- ------------ ---------- ---------
- ------------
(1) Includes 2,332,458 shares of Class A Common Stock held by TAMMS Investment
Company, Limited Partnership ("TAMMS"). TAMMS' general partners are Ted
Arison and TAMMS Management Corporation ("TAMMS Corp."), a corporation
wholly-owned by Ted Arison. By virtue of his interest in TAMMS Corp., Ted
Arison may be deemed to beneficially own all of the 2,332,458 shares of
Class A Common Stock owned by TAMMS. Ted Arison disclaims beneficial
ownership of 1,810,364 of such shares, which are beneficially owned by the
partners of TAMMS (other than TAMMS Corp.).
(2) Ted Arison has granted the U.S. and International Underwriters
over-allotment options to purchase a total of 1,545,000 additional shares
of Class A Common Stock. If such options are exercised, Ted Arison will
beneficially own 57,519,600 shares of Class A Common Stock, representing
24.0% of the total issued and outstanding shares of Class A Common Stock.
(3) Shari Arison, Ted Arison's daughter, is a director of the Company and
President of the Arison Foundation, Inc. (the "Foundation"). The Foundation
is directed by six trustees, a majority of whom are affiliates of Ted
Arison. Ted Arison disclaims beneficial ownership of the 3,175,000 shares
owned by the Foundation. In addition, Micky Arison, the Chairman of the
Board and Chief Executive Officer of the Company, is the son of Ted Arison.
(4) New World Symphony Supporting Foundation, Inc. has granted the U.S. and
International Underwriters over-allotment options to purchase a total of
1,300,000 shares of Class A Common Stock. If such options are exercised,
New World Symphony Supporting Foundation, Inc. will beneficially own no
shares of Class A Common Stock.
(5) Less than one percent of the outstanding shares of Class A Common Stock.
</TABLE>
CERTAIN RELATED TRANSACTIONS
CONSULTING AGREEMENT. In November 1990, subsequent to his resignation as
Chairman of the Board, Ted Arison and the Company entered into a consulting
agreement (the "Consulting Agreement") whereby Ted Arison agreed to act as a
consultant to the Company with respect to the construction of cruise ships. In
July 1992, the Consulting Agreement was replaced by a new consulting agreement
(the "New Consulting Agreement") between the Company and Arison Investments Ltd.
("AIL"), a corporation affiliated with Ted Arison. The New Consulting Agreement
was amended in August 1996 to extend the terms of the agreement to November 25,
1999. Under the New Consulting Agreement, the Company has agreed to pay AIL
$500,000 per year and to reimburse it for all customary and usual expenses. The
New Consulting Agreement also has a non-competition clause under which AIL has
agreed that during the term of the New Consulting Agreement it will not, and
will cause its affiliate not to compete in any way with the Company. In each of
fiscal 1993, 1994, and 1995, $500,000 in fees were paid to AIL under the New
Consulting Agreement. In connection with the performance of his consulting
services, Mr. Arison periodically utilizes an airplane leased by the Company.
Mr. Arison reimburses the Company for his personal
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<PAGE>
use of the airplane. In 1994 and 1995, Mr. Arison paid the Company $396,720 and
$264,000, respectively, for his personal use of the airplane.
REGISTRATION RIGHTS AGREEMENT. Under a registration rights agreement (the
"Arison Registration Rights Agreement"), the Company has granted certain
registration rights to Ted Arison with respect to the shares of Class A Common
Stock beneficially owned by Ted Arison (the "Arison Shares"). If, at any time,
Ted Arison makes a written demand for the registration of any number of the
Arison Shares, subject to a minimum amount of 500,000 shares, the Company will
within 90 days prepare and file with the SEC a registration statement, subject
to certain limitations. In addition, if the Company determines to file a
registration statement on its behalf or on behalf of any security holders (other
than a registration statement filed for the purpose of registering shares
issuable to employees under an employee benefit plan or in connection with a
business combination) relating to its Common Stock or any class of securities
convertible into Common Stock, Ted Arison may register the Arison Shares
pursuant to such registration statement, subject to certain limitations. The
Company has agreed to bear all expenses relating to such demand and piggyback
registrations, except for fees and disbursements of counsel for Ted Arison,
selling costs, underwriting discounts and applicable filing fees. In April 1995,
the Company filed a registration statement at the request of certain trusts for
the sale of 13,800,000 shares of the Company's Class A Common Stock pursuant to
the terms of the Arison Registration Rights Agreement. The Company incurred
approximately $300,000 in expenses in connection with the registration of such
shares. In addition, this Registration Statement was filed at the request of Ted
Arison pursuant to the terms of the Arison Registration Rights Agreement and the
Company expects to incur approximately $501,639 of expenses in connection with
this offering.
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<PAGE>
DESCRIPTION OF CAPITAL STOCK
GENERAL
The Company's authorized capital stock consists of 399,500,000 shares of
Class A Common Stock and 100,500,000 shares of Class B Common Stock.
VOTING
Holders of Class A Common Stock and Class B Common Stock vote as a single
class on all matters submitted to a vote of the shareholders, with each share of
Class A Common Stock entitled to one vote and each share of Class B Common Stock
entitled to five votes, except (i) for the election of directors, and (ii) as
otherwise provided by law. In the annual election of directors, the holders of
Class A Common Stock, voting as a separate class, are entitled to elect 25% of
the directors to be elected (rounded up to the nearest whole number). The
holders of Class B Common Stock, voting as a separate class, are entitled to
elect 75% of the directors to be elected (rounded down to the nearest whole
number), so long as the number of outstanding shares of Class B Common Stock is
at least 12 1/2% of the number of outstanding shares of both classes of Common
Stock. If the number of outstanding shares of Class B Common Stock falls below
12 1/2%, directors that would have been elected by a separate vote of that class
will instead be elected by the holders of both classes of Common Stock, with
holders of Class A Common Stock having one vote per share and holders of Class B
Common Stock having five votes per share.
Directors may be removed, with or without cause, by the holders of the class
or classes of Common Stock that elected them. Vacancies in a directorship may be
filled by the vote of the class of shares that had previously filled that
vacancy, or by the remaining directors of that class; if there are no such
directors, however, the vacancy may be filled by the remaining directors of the
other class.
Except for the election or removal of directors as described above and
except for class votes as required by law, holders of both classes of Common
Stock vote or consent as a single class on all matters, with each share of Class
A Common Stock having one vote per share and each share of Class B Common Stock
having five votes per share.
CONVERSION
At the option of the holder of record, each share of Class B Common Stock is
convertible at any time into one share of Class A Common Stock. Shares of Class
A Common Stock are not convertible into shares of Class B Common Stock.
DIVIDENDS
The holders of the Common Stock are entitled to receive such dividends, if
any, as may be declared by the Board of Directors in its discretion out of funds
legally available therefor. Any dividend declared by the Board of Directors on
the Company's Common Stock must be paid concurrently at the same rate on the
Class A Common Stock and the Class B Common Stock. Panamanian law permits the
payment of dividends to the extent of retained earnings.
OTHER PROVISIONS
Upon liquidation or dissolution of the Company, the holders of shares of
Common Stock are entitled to receive on a pro rata basis all assets remaining
for distribution to common stockholders. The Common Stock has no preemptive or
other subscription rights and there are no other
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<PAGE>
conversion rights or redemption or sinking fund provisions with respect to such
shares. All shares of Class A Common Stock that are currently outstanding are
fully paid and non-assessable.
The B Trust is a party to an amended and restated shareholders agreement
with the Company and certain other parties pursuant to which the B Trust may not
voluntarily transfer its shares of Class B Common Stock until July 1, 1997,
except under certain conditions designed to ensure, to the extent feasible, that
the transfer will not affect the Company's CFC status. In addition, until such
date, pursuant to the shareholder's agreement, the B Trust may not cause the
Company to authorize or issue any securities, if after giving effect to the
issuance thereof and to any related transactions, the Company would cease to be
a CFC. The B Trust also may not convert its shares of Class B Common Stock into
Class A Common Stock until July 1, 1997.
Neither Panamanian law nor the Company's Articles of Incorporation or
By-laws impose limitations on the right of non-resident or foreign owners to
hold or vote shares of the Common Stock. While no tax treaty currently exists
between the Republic of Panama and the United States, under current law the
Company believes that distributions to its shareholders are not subject to
taxation under the laws of the Republic of Panama.
Under Panamanian law, directors of the Company may vote by proxy.
The Company's transfer agent and registrar for the Class A Common Stock is
First Union National Bank of North Carolina.
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<PAGE>
TAXATION
The following discussion summarizes certain United States Federal income tax
consequences to United States persons holding the Company's Class A Common
Stock. This discussion is a summary for general information only, and is not a
complete analysis of the tax considerations that may be applicable to a
prospective investor. This discussion also does not address the tax consequences
that may be relevant to particular categories of investors subject to special
treatment under certain Federal income tax laws, such as dealers in securities,
tax-exempt entities, banks, insurance companies and foreign individuals and
entities. In addition, it does not describe any tax consequences arising out of
the tax laws of any state, locality or foreign jurisdiction. The discussion is
based upon currently existing provisions of the Code, existing and proposed
regulations thereunder and current administrative rulings and court decisions.
All of the foregoing are subject to change and any such change could affect the
continuing validity of this discussion. In connection with the foregoing,
investors should be aware that the Tax Reform Act of 1986 (hereinafter, the
"1986 Tax Act") changed significantly the United States Federal income tax rules
applicable to the Company and certain holders of its stock (including the
Principal Shareholders). Although the relevant provisions of the 1986 Tax Act
are discussed herein, those provisions have not yet been the subject of
extensive administrative or judicial interpretation. Accordingly, there can be
no assurance that such interpretation will not have an adverse impact on an
investment in the Class A Common Stock.
PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE
PARTICULAR TAX CONSEQUENCES TO THEM OF ANY INVESTMENT IN THE CLASS A COMMON
STOCK, INCLUDING THE APPLICATION OF FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS.
DIVIDENDS; UNDISTRIBUTED INCOME OF THE COMPANY
A United States person whose holdings of the Company's Class A Common Stock
(including shares such person is considered to own under applicable attribution
rules) represent less than 10 percent of the total combined voting power of all
classes of the Company's capital stock, generally is not required to recognize
income by reason of the Company's earnings until such earnings are distributed.
Dividends paid by the Company to such a shareholder will be taxable to such
shareholder as dividend income to the extent of the Company's current or
accumulated earnings and profits. Such dividends generally will not be eligible
for any dividends-received deduction. The same treatment will apply to any
dividends that may be distributed to all shareholders by reason of certain tax
liabilities of the Principal Shareholders.
If, however, the Company is a CFC for an uninterrupted period of 30 days
during any taxable year of the Company, a United States person who owns (or is
considered to own) 10% or more of the Company's voting power (a "Ten Percent
Shareholder") on the last day of such taxable year on which the Company is a CFC
will generally be required to include in ordinary income his pro rata share of
the Company's "subpart F income" for that taxable year and, in addition, certain
other items, including, under certain circumstances, the Company's increase in
earnings invested in United States property, and amounts of previously excluded
subpart F income withdrawn by the Company from investment in certain shipping
and related assets, whether or not any amounts are actually distributed to
shareholders. "Subpart F income" includes, among other things, "foreign base
company shipping income," which is defined to include income derived from using
or chartering a vessel in foreign commerce or from the sale, exchange or other
disposition of a vessel. Accordingly, a substantial part of the Company's
earnings will be subpart F income. Earnings and profits of the Company already
included in income by a Ten Percent Shareholder by reason of the CFC provisions
discussed above are not again included in income by such Ten Percent Shareholder
or his assignee when an actual distribution is made. Other distributions by the
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<PAGE>
Company by way of dividends with respect to the Common Stock out of current or
accumulated earnings and profits will be taxed to Ten Percent Shareholders as
ordinary income.
The Company is currently a CFC and thus, the special rules discussed above
will apply to certain of the Principal Shareholders.
DISPOSITIONS OF CLASS A COMMON STOCK
In general, any gain or loss on the sale or exchange of Class A Common Stock
of the Company by a United States shareholder will be capital gain or loss,
provided such stock is held as a capital asset. However, any United States
person who was a Ten Percent Shareholder of the Company at any time during the
five-year period ending on the date of sale or exchange (or a distribution
liquidation) when the Company was a CFC may be required to treat all or a
portion of the gain from a sale or exchange of Class A Common Stock as ordinary
income (to the extent of his proportionate share of certain earnings and profits
of the Company) rather than as capital gain. Any capital gain or loss recognized
on a sale or exchange of Class A Common Stock will be long-term capital gain or
loss if the shareholder has held the Class A Common Stock for more than one
year.
OTHER JURISDICTIONS
The Company anticipates that distributions to its shareholders will not be
subject to taxation under the laws of the Republic of Panama.
39
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
among the Company, the Selling Shareholders and the U.S. Underwriters named
below, each of the Selling Shareholders has severally agreed to sell to each of
the U.S. Underwriters, and each of such U.S. Underwriters, for whom Goldman,
Sachs & Co., Bear, Stearns & Co. Inc., Lehman Brothers Inc. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated are acting as representatives, has severally
agreed to purchase from the Selling Shareholders the respective number of shares
of Class A Common Stock set forth opposite its name below:
<TABLE>
<CAPTION>
NUMBER OF SHARES
OF CLASS A
UNDERWRITER COMMON STOCK
- ---------------------------------------------------------------- ----------------
<S> <C>
Goldman, Sachs & Co.............................................
Bear, Stearns & Co. Inc.........................................
Lehman Brothers Inc. ...........................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..........................................
----------------
Total................................................. 16,240,000
----------------
----------------
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the U.S.
Underwriters are committed to take and pay for all of the shares offered hereby,
if any are taken.
The U.S. Underwriters propose to offer the shares of Class A Common Stock in
part directly to the public at the initial public offering price set forth on
the cover page of this Prospectus and in part to certain securities dealers at
such price less a concession of $ per share. The U.S. Underwriters may allow,
and such dealers may reallow, a concession not in excess of $ per share to
certain brokers and dealers. After the shares of Class A Common Stock are
released for sale to the public, the offering price and other selling terms may
from time to time be varied by the representatives.
The Company and the Selling Shareholders have entered into an underwriting
agreement (the "International Underwriting Agreement") with the underwriters of
the international offering (the "International Underwriters") providing for the
concurrent offer and sale of 4,060,000 shares of Class A Common Stock in an
international offering outside the United States. The offering price and
aggregate underwriting discounts and commissions per share for the two offerings
are identical. The closing of the offering made hereby is a condition to the
closing of the international offering, and vice versa. The representatives of
the International Underwriters are Goldman Sachs International, Bear, Stearns
International Limited, Lehman Brothers International (Europe) and Merrill Lynch
International.
40
<PAGE>
Pursuant to an agreement between the U.S. and international underwriting
syndicates (the "Agreement Between") relating to the two offerings, each of the
U.S. Underwriters named herein has agreed that, as a part of the distribution of
the shares offered hereby and subject to certain exceptions, it will offer, sell
or deliver the shares of Class A Common Stock, directly or indirectly, only in
the United States of America (including the States and the District of
Columbia), its territories, its possessions and other areas subject to its
jurisdiction (the "United States") and to U.S. persons, which term shall mean,
for purposes of this paragraph: (a) any individual who is a resident of the
United States or (b) any corporation, partnership or other entity organized in
or under the laws of the United States or any political subdivision thereof and
whose office most directly involved with the purchase is located in the United
States. Each of the International Underwriters has agreed or will agree pursuant
to the Agreement Between that, as part of the distribution of the shares offered
as a part of the international offering, and subject to certain exceptions, it
will (i) not, directly or indirectly, offer, sell or deliver shares of Class A
Common Stock, (a) in the United States or to any U.S. persons or (b) to any
person who it believes intends to reoffer, resell or deliver the shares in the
United States or to any U.S. persons, and (ii) cause any dealer to whom it may
sell such shares at any concession to agree to observe a similar restriction.
Pursuant to the Agreement Between, sales may be made between the U.S.
Underwriters and the International Underwriters of such number of shares of
Class A Common Stock as may be mutually agreed. The price of any shares so sold
shall be the initial public offering price, less an amount not greater than the
selling concession.
Ted Arison and New World Symphony Supporting Foundation, Inc. have granted
the U.S. Underwriters an option exercisable for 30 days after the date of this
Prospectus to purchase up to an aggregate of 2,276,000 additional shares of
Class A Common Stock solely to cover over-allotments, if any. If the U.S.
Underwriters exercise their over-allotment option, the U.S. Underwriters have
severally agreed, subject to certain conditions, to purchase approximately
the same percentage thereof that the number of shares to be purchased by each
of them, as shown in the foregoing table, bears to the 16,240,000 shares of
Class A Common Stock offered. Ted Arison and New World Symphony Supporting
Foundation, Inc. have granted the International Underwriters a similar option
to purchase up to an aggregate of 569,000 additional shares of Common Stock.
For a period of 90 and 365 days, respectively, after the date of this
Prospectus, the Company and the Selling Shareholders have agreed not to offer,
sell, contract to sell or otherwise dispose of any shares of Class A Common
Stock or any security substantially similar thereto, or any other security
convertible into, or exchangeable for, shares of Class A Common Stock of the
Company or any security substantially similar thereto, other than the conversion
of shares of Class B Common Stock into shares of Class A Common Stock, without
the prior written consent of Goldman, Sachs & Co., except for any securities
issued by the Company pursuant to employee benefit plans or upon the conversion
of convertible or exchangeable securities currently outstanding. However, if
the over-allotment options are not exercised in full by the U.S. and
International Underwriters, New World Symphony Supporting Foundation, Inc.
will not be subject to any of the foregoing restrictions. In addition, for a
period of 365 days after the date of this Prospectus, each of Ted Arison
and Micky Arison has agreed not to consent to any such disposition by any trust
that owns shares of Class A Common Stock, Class B Common Stock or other
securities of the type described in the preceding sentence over which such
person has voting or dispositive power, other than the conversion of shares of
Class B Common Stock into shares of Class A Common Stock, without the prior
written consent of Goldman, Sachs & Co.
The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the Act.
This Prospectus may be used by underwriters and dealers in connection with
offers and sales of Class A Common Stock, including shares initially sold in the
international offering, to persons located in the United States.
41
<PAGE>
Mr. Uzi Zucker, a Director of the Company, is a Senior Managing Director of
Bear, Stearns & Co. Inc. ("Bear Stearns"). Bear Stearns is one of the investment
banking firms serving as a U.S. Underwriter in this offering and Bear, Stearns
International Limited is one of the International Underwriters in the
International Offering. In addition, Bear Stearns (i) is one of the investment
banking firms serving as an agent of the Company in connection with the
Company's ongoing offering of $100,000,000 of Medium Term Notes and (ii) has
served as an underwriter in previous public offerings by the Company. In
addition, Bear Stearns has provided other investment banking and consulting
services to the Company during the fiscal years ended November 30, 1995, 1994
and 1993, and during the current fiscal year. It is expected that Bear Stearns
may continue to provide investment banking and consulting services to the
Company when so requested by the Company.
VALIDITY OF SECURITIES
The validity of the Shares will be passed upon by Tapia Linares y Alfaro,
Panama City, Republic of Panama. Paul, Weiss, Rifkind, Wharton & Garrison, New
York, New York, has acted as special United States counsel to the Company in
connection with the offering of the Shares. Sullivan & Cromwell, New York, New
York, has acted as counsel for the Underwriters. James M. Dubin, a partner of
Paul, Weiss, Rifkind, Wharton & Garrison, is the sole stockholder of the trustee
of the B Trust and a director of the Company. Paul, Weiss, Rifkind, Wharton &
Garrison also serves as counsel to Micky Arison. See "Certain
Considerations--Control by Principal Shareholders".
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Annual Report on Form 10-K for the year ended November 30, 1995, have been so
incorporated in reliance on the report of Price Waterhouse LLP, independent
certified public accountants, given on the authority of said firm as experts in
auditing and accounting.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements under the headings "Prospectus Summary," "The Company,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business" and elsewhere in this Prospectus constitute
"forward-looking statements" within the meaning of the Reform Act. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors, which may cause the actual results, performances or achievements
of the Company to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: general economic and business
conditions which may impact levels of disposable income of consumers and pricing
and passenger yields for the Company's cruise products; increases in cruise
industry capacity in the Caribbean and Alaska; changes in tax laws and
regulations (especially any change affecting the Company's status as a
"controlled foreign corporation" as defined in Section 957(a) of the Code (see
"Certain Considerations--Taxation of the Company")); the ability of the Company
to implement its shipbuilding program and to expand its business outside the
North American market where it has less experience; delivery of new vessels on
schedule and at the contracted price; weather patterns in the Caribbean;
unscheduled ship repairs and drydocking; incidents involving cruise vessels at
sea; and changes in laws and government regulations applicable to the Company
(including the implementation of the "Safety of Life at Sea Convention" and
changes in Federal Maritime Commission surety and guaranty arrangements).
42
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
-------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 2
Incorporation of Certain Documents by
Reference............................. 2
Prospectus Summary.................... 3
Certain Considerations................ 7
Use of Proceeds....................... 8
Price Range of Class A Common Stock
and Dividends......................... 8
Dividend Policy....................... 9
Capitalization........................ 10
Selected Financial Data............... 11
Management's Discussion and Analysis
of Financial Condition and Results
of Operations......................... 13
Business.............................. 20
Selling Shareholders.................. 34
Description of Capital Stock.......... 36
Taxation.............................. 38
Underwriting.......................... 40
Validity of Securities................ 42
Experts............................... 42
Special Note Regarding Forward-Looking
Statements............................ 42
</TABLE>
20,300,000 SHARES
CARNIVAL CORPORATION
CLASS A COMMON STOCK
(PAR VALUE $.01 PER SHARE)
--------------
[CARNIVAL LOGO]
--------------
GOLDMAN, SACHS & CO.
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
REPRESENTATIVES OF THE UNDERWRITERS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the issuance and distribution of
the securities being registered, other than underwriting discounts and
commissions, are set forth in the following table. All of the amounts shown are
estimates, except the Securities and Exchange Commission registration fee.
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission Fee....................... $236,639
Accountants' fees and expenses............................... 30,000
Legal fees and expenses...................................... 125,000
Printing and engraving....................................... 100,000
Miscellaneous expenses....................................... 10,000
--------
Total.................................................. $501,639
--------
--------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles of Incorporation and By-Laws provide, subject to the
requirements set forth therein, that with respect to any person who was or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
the Company shall indemnify such person by reason of the fact that he is or was
a director or an officer, and may indemnify such person by reason of the fact
that he is or was an employee or agent of the Company or is or was serving at
its request as a director, officer, employee or agent in another corporation,
partnership, joint venture, trust or other enterprise, in either case against
expenses (including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The Company has entered
into indemnity agreements with Shari Arison, Maks L. Birnbach, Richard G. Capen,
Jr., David Crossland, James M. Dubin, Modesto Maidique, William S. Ruben, Stuart
Subotnick, Sherwood M. Weiser and Uzi Zucker providing essentially the same
indemnities as are described in the Company's Articles of Incorporation.
Under a registration rights agreement among the Company and certain
irrevocable trusts (the "Trusts"), the Trusts have agreed to indemnify the
Company, its directors and officers and each person who controls the Company
within the meaning of the Exchange Act, against certain liabilities. In
addition, under a registration rights agreement between the Company and Ted
Arison, Ted Arison has agreed to indemnify the Company, its directors and
officers and each person who controls the Company within the meaning of the Act
against certain liabilities.
II-1
<PAGE>
ITEM 16. EXHIBITS
The following Exhibits are filed as part of this Registration Statement:
<TABLE>
<C> <S>
1 -- Form of U.S. Underwriting Agreement to be entered into by the Selling
Shareholders, the Company and the U.S. Underwriters
4(a) -- Form of Amended and Restated Articles of Incorporation of the Company
(Incorporated by reference to Exhibit No. 4.1 to the Company's Quarterly Report
on Form 10-Q for the quarter ended February 28, 1995 (File No. 1-9610))
4(b) -- Form of By-laws of the Company (Incorporated by reference to Exhibit No. 3.2 to
the Company's Amendment No. 1 to the Registration Statement on Form S-1 (File No.
33-14844))
5 -- Opinion of Tapia, Linares y Alfaro as to the legality of the Class A Common
Stock
8 -- Opinion of Paul, Weiss, Rifkind, Wharton & Garrison as to tax matters
23(a) --Consent of Price Waterhouse LLP
23(b) -- Consent of Tapia, Linares y Alfaro (included in their opinion filed as Exhibit
5)
23(c) -- Consent of Paul, Weiss, Rifkind, Wharton & Garrison (included in their opinion
filed as Exhibit 8)
*24 --Power of Attorney
</TABLE>
- ------------
* Previously filed.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(c) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining the liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 2 to Registration Statement to be filed on its behalf by the undersigned,
thereunto duly authorized, in the City of Miami, State of Florida, on the 12th
day of November, 1996.
CARNIVAL CORPORATION
By /s/ MICKY ARISON
...................................
Micky Arison
(Chief Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------- ---------------------------------- ------------------
<S> <C> <C>
/s/ MICKY ARISON Chairman of the Board, Chief November 12, 1996
.................................. Executive Officer, Director and
Micky Arison Authorized Representative
* Vice-Chairman, Chief Financial and November 12, 1996
.................................. Accounting Officer and Director
Howard S. Frank
* Director November 12, 1996
..................................
Shari Arison
* Director November 12, 1996
..................................
Maks L. Birnbach
* Director November 12, 1996
..................................
Richard G. Capen, Jr.
* Director November 12, 1996
..................................
David Crossland
* Director November 12, 1996
..................................
Robert H. Dickinson
* Director November 12, 1996
..................................
James M. Dubin
* Director November 12, 1996
..................................
A. Kirk Lanterman
* Director November 12, 1996
..................................
Modesto A. Maidique
* Director November 12, 1996
..................................
William S. Ruben
* Director November 12, 1996
..................................
Stuart Subotnick
* Director November 12, 1996
..................................
Sherwood M. Weiser
* Director November 12, 1996
..................................
Meshulam Zonis
* Director November 12, 1996
..................................
Uzi Zucker
*By: /s/ MICKY ARISON
..................................
Name: Micky Arison
Title: Attorney-in-Fact
</TABLE>
II-3
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIAL
PAGE
EXHIBITS NUMBER
- -------- ----------
<C> <S> <C>
1 -- Form of U.S. Underwriting Agreement to be entered into by the
Selling Shareholders, the Company and the U.S. Underwriters
4(a) -- Form of Amended and Restated Articles of Incorporation of the
Company (Incorporated by reference to Exhibit No. 4.1 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
February 28, 1995 (File No. 1-9610))
4(b) -- Form of By-laws of the Company (Incorporated by reference to
Exhibit No. 3.2 to the Company's Amendment No. 1 to the
Registration Statement on Form S-1 (File No. 33-14844))
5 -- Opinion of Tapia, Linares y Alfaro as to the legality of the
Class A Common Stock
8 -- Opinion of Paul, Weiss, Rifkind, Wharton & Garrison as to tax
matters
23(a) --Consent of Price Waterhouse LLP
23(b) -- Consent of Tapia, Linares y Alfaro (included in their opinion
filed as Exhibit 5)
23(c) -- Consent of Paul, Weiss, Rifkind, Wharton & Garrison (included in
their opinion filed as Exhibit 8)
*24 --Power of Attorney
</TABLE>
- ------------
* Previously filed.
<PAGE>
CARNIVAL CORPORATION
CLASS A COMMON STOCK
(PAR VALUE $.01 PER SHARE)
_________________________
UNDERWRITING AGREEMENT
(U.S. VERSION)
November __, 1996
Goldman, Sachs & Co.,
Bear, Stearns & Co. Inc.,
Lehman Brothers Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated,
As representatives of the several Underwriters
named in Schedule II hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Certain stockholders named in Schedule V hereto (the "Selling
Stockholders") of Carnival Corporation, a company incorporated under the
laws of the Republic of Panama (the "Company"), propose, subject to the
terms and conditions stated herein, to sell to the underwriters named in
Schedule II hereto (the "Underwriters"), for whom you (the
"Representatives") are acting as representatives, an aggregate of
16,240,000 shares (the "Firm Shares") and, at the election of the
Underwriters, up to 2,436,000 additional shares (the "Optional Shares") of
Class A Common Stock, par value $.01 per share ("Stock") of the Company
(the Firm Shares and the Optional Shares that the Underwriters elect to
purchase pursuant to Section 2 hereof being collectively called the
"Shares").
It is understood and agreed to by all parties that the Company
and the Selling Stockholders are concurrently entering into an agreement
(the "International Underwriting Agreement") providing for the sale by the
Selling Stockholders of up to a total of 4,669,000 shares of Stock (the
"International Shares"), including the overallotment option thereunder,
<PAGE>
through arrangements with certain underwriters outside the United States
(the "International Underwriters"), for whom Goldman Sachs International,
Bear, Stearns International Limited, Lehman Brothers International (Europe)
and Merrill Lynch International are acting as lead managers. Anything
herein or therein to the contrary notwithstanding, the respective closings
under this Agreement and the International Underwriting Agreement are
hereby expressly made conditional on one another. The Underwriters
hereunder and the International Underwriters are simultaneously entering
into an Agreement between U.S. and International Underwriting Syndicates
(the "Agreement between Syndicates") which provides, among other things,
for the transfer of shares of Stock between the two syndicates. Two forms
of prospectus are to be used in connection with the offering and sale of
shares of Stock contemplated by the foregoing, one relating to the Shares
hereunder and the other relating to the International Shares. The latter
form of prospectus will be identical to the former except for the front
cover page, back cover page, and the text under the captions "Underwriting"
and "Taxation". Except as used in Sections 2, 3, 4 and 9 herein, and except
as the context may otherwise require, references hereinafter to the Shares
shall include all the shares of Stock which may be sold pursuant to either
this Agreement or the International Underwriting Agreement, and references
herein to any prospectus whether in preliminary or final form, and whether
as amended or supplemented, shall include both the U.S. and the
international versions thereof.
1. REPRESENTATIONS AND WARRANTIES. (A) The Company represents
and warrants to, and agrees with, each Underwriter as set forth below in
this Section 1. Certain terms used in this Section 1 are defined at the
end of this Section 1.
(a) If the offering of the Shares is a Delayed Offering (as
specified in Schedule I hereto), paragraph (i) below is applicable
and, if the offering of the Shares is a Non-Delayed Offering (as so
specified), paragraph (ii) below is applicable.
(i) The Company meets the requirements for the use of Form
S-3 under the Securities Act of 1933 (the "Act") and has filed
with the Securities and Exchange Commission (the "Commission") a
registration statement (the file number of which is set forth in
Schedule I hereto) on such Form, including a basic prospectus,
for registration under the Act of the offering and sale of the
Shares. The Company may have filed one or more amendments
thereto, and may have used a Preliminary Final Prospectus, each
of which has previously been furnished to you. Such registration
statement, as so amended, has become effective. The offering of
the Shares is a Delayed Offering and, although the Basic
Prospectus may not include all the information with respect to
the Shares and the offering thereof required by the Act and the
rules thereunder to be included in the Final Prospectus, the
Basic Prospectus includes all such information required by the
Act and the rules and regulations thereunder to be included
therein as of the Effective Date. The Company will next file
with the Commission pursuant to Rule 424(b)(2) or (5) a final
supplement to the form of prospectus included in such
registration statement relating to the Shares and the offering
thereof. As filed, such final prospectus supplement shall
include all required information with respect to the Shares and
the offering thereof and, except to the extent the
Representatives shall agree in writing to a modification, shall
be in all substantive respects in the form furnished to you prior
to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
2
<PAGE>
information and other changes (beyond those contained in the
Basic Prospectus and any Preliminary Final Prospectus) as the
Company has advised you, prior to the Execution Time, will be
included or made therein.
(ii) The Company meets the requirements for the use of Form
S-3 under the Act and has filed with the Commission a
registration statement (the file number of which is set forth in
Schedule I hereto) on such Form, including a basic prospectus,
for registration under the Act of the offering and sale of the
Shares. The Company may have filed one or more amendments
thereto, including a Preliminary Final Prospectus, each of which
has previously been furnished to you. The Company will next file
with the Commission either (x) a final prospectus relating to the
Shares in accordance with Rules 430A and 424(b) (1) or (4), or
(y) prior to the effectiveness of such registration statement, an
amendment to such registration statement, including the form of
final prospectus. In the case of clause (x), the Company has
included in such registration statement, as amended at the
Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder to be
included in the Final Prospectus with respect to the Shares and
the offering thereof. As filed, such final prospectus supplement
or such amendment and form of final prospectus supplement shall
contain all Rule 430A Information, together with all other such
required information, with respect to the Shares and the offering
thereof and, except to the extent the Representatives shall agree
in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution Time
or, to the extent not completed at the Execution Time, shall
contain only such specific additional information and other
changes (beyond that contained in the Basic Prospectus and any
Preliminary Final Prospectus) as the Company has advised you,
prior to the Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Final Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date, the Final
Prospectus (and any supplement thereto) will, comply in all material
respects with the applicable requirements of the Act, the Securities
Exchange Act of 1934 (the "Exchange Act") and the respective rules
thereunder; on the Effective Date, the Registration Statement did not
or will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and, on the
Effective Date, the Final Prospectus, if not filed pursuant to Rule
424(b), did not or will not, and on the date of any filing pursuant to
Rule 424(b) and at each Time of Delivery (as defined herein), the
Final Prospectus (together with any supplement thereto) will not,
include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no
representations or warranties as to the information contained in or
omitted from the Registration Statement or the Final Prospectus (or
any supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through the Representatives specifically for inclusion in
the Registration Statement or the Final Prospectus (or any supplement
thereto).
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(c) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Final Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Final Prospectus, in either
case which could reasonably be expected to have a material adverse
effect on the general affairs, business, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries taken as a whole; and, since the respective dates as of
which information is given in the Registration Statement and the Final
Prospectus, there has not been (i) any change in the capital stock or
increase in long-term debt of the Company on a consolidated basis
other than any increase in the capital stock upon the issuance of
shares or options pursuant to employee stock option or other benefit
plans, pursuant to contracts with officers or employees of the Company
and its subsidiaries, any increase in capital stock upon the
conversion of the Company's 41/2% Convertible Subordinated Notes due
July 15, 1997, and any increase in long term debt in excess of
$10,000,000, or (ii) any increase in short-term debt of the Company in
excess of $10,000,000 or (iii) any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, business, management, financial
position, shareholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Final Prospectus;
(d) The subsidiaries of the Company listed on Schedule III hereto
are hereinafter referred to as the "Subsidiaries." All other
Subsidiaries of the Company, in the aggregate, do not constitute a
"Significant Subsidiary" as defined in Regulation S-X. The Company
and each Subsidiary has good and marketable title to all real property
and good and marketable title to all personal property owned by it, in
each case free and clear of all liens, encumbrances and defects except
such as are described in the Final Prospectus, such as are identified
on Schedule III or IV hereof or such as in the aggregate do not have
and can reasonably be expected in the future not to have a material
adverse effect upon the general affairs, business, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole; and any real property and buildings
held under lease by the Company or any of the Subsidiaries are held by
it under valid, subsisting and enforceable leases with such exceptions
described in the Final Prospectus or such exceptions that in the
aggregate do not have and can reasonably be expected in the future not
to have a material adverse effect upon the general affairs, business,
financial position, shareholders' equity or results of operations of
the Company and its subsidiaries, taken as a whole;
(e) The Company and each of the Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
(where applicable) under the laws of its jurisdiction of
incorporation, with full power and authority (corporate and other),
and all necessary consents, authorizations, approvals, orders,
licenses, certificates and permits of and from, and declarations and
filings with, all federal, state, local and other governmental
authorities, to own, lease, license and use its properties and conduct
its business as described in the Final Prospectus (except for such
consents, authorizations, approvals, orders, licenses, certificates,
permits, declarations and filings, for which the failure to have
obtained, individually or in the aggregate, does not and can
reasonably
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<PAGE>
be expected in the future not to have a material adverse effect upon
the general affairs, business, financial position, shareholders'
equity or results of operations of the Company and its subsidiaries,
taken as a whole), and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, which requires such
qualification (except where the failure to be so qualified or in good
standing does not, and can reasonably be expected in the future not
to, have a material adverse effect upon the general affairs, business,
financial position, shareholders' equity or results of operations of
the Company and its subsidiaries, taken as a whole);
(f) The Company has an authorized capitalization as set forth in
the Final Prospectus, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued and are
fully paid and non-assessable; and all of the issued shares of capital
stock of each Subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, security interests or claims, except as otherwise
disclosed in Schedule III hereto;
(g) The Company has all requisite power and authority to execute,
deliver and perform this Agreement and the International Underwriting
Agreement. All necessary corporate proceedings of the Company have
been duly taken to authorize the execution, delivery and performance
by the Company of this Agreement and the International Underwriting
Agreement. The issue and sale of the Shares and the compliance by the
Company with all of the provisions of this Agreement and the
International Underwriting Agreement, and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any material indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which the Company
or any of the Subsidiaries is bound or to which any of the property or
assets of the Company or any of the Subsidiaries is subject; nor will
such actions result in any violation of any statute or any order, rule
or regulation binding on the Company or any of the Subsidiaries or any
of their properties, except, with respect to jurisdictions outside the
United States and Panama, for violations which, individually or in the
aggregate, would not have a material adverse effect on the business,
financial condition or results of operations of the Company and its
subsidiaries taken as a whole or on the ability of the Underwriters to
receive good and valid title to the Shares being sold hereunder; and
no consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the issue and sale of the Shares or the consummation by
the Company of transactions contemplated by this Agreement and the
International Underwriting Agreement, except the registration under
the Act of the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state or
foreign securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters and the
International Underwriters;
(h) Other than as set forth in the Final Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is subject, which
5
<PAGE>
could reasonably be expected to individually or in the aggregate have
a material adverse effect on the consolidated financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole; and, to the Company's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others. Neither the Company nor any
subsidiary is in violation of, or in default with respect to, any law,
rule, regulation, order, judgment or decree, except as may be properly
described in the Final Prospectus and such as in the aggregate do not
now have and can reasonably be expected in the future not to have a
material adverse effect on the general affairs, business, financial
position, shareholders' equity or results of operations of the Company
and the subsidiaries, taken as a whole; nor is the Company or any
subsidiary required to take any action in order to avoid such
violation or default;
(i) Price Waterhouse LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of
the Commission thereunder;
(j) All patents, patent applications, trademarks, trademark
applications, trade names, service marks, copyrights, franchises and
other intangible properties and assets (all of the foregoing being
herein called "Intangibles") that the Company or any of its
subsidiaries owns or has pending, or under which it is licensed, are
in good standing and uncontested, except for such Intangibles
(individually or in the aggregate) where the failure to be in good
standing and uncontested does not and can reasonably be expected in
the future not to have a material adverse effect upon the general
affairs, business, financial position, shareholders' equity or results
of operations of the Company and its subsidiaries, taken as a whole.
Neither the Company nor any of its subsidiaries has infringed, is
infringing, or has received notice of infringement with respect to
asserted Intangibles of others, except such as individually or in the
aggregate do not now have and can reasonably be expected in the future
not to have a material adverse effect upon the general affairs,
business, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole. To
the knowledge of the Company, there is no infringement by others of
Intangibles of the Company or of any of its subsidiaries except such
as individually or in the aggregate do not now have and can reasonably
be expect in the future not to have a material adverse effect upon the
general affairs, business, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, taken as a
whole;
(k) Neither the Company, nor any subsidiary, is now or is
expected by the Company or any subsidiary to be in violation or breach
of, or in default with respect to, complying with any material
provision of any contract, agreement instrument, lease, license,
arrangement or understanding which is material to the Company and its
subsidiaries, taken as a whole, and each such contract, agreement,
instrument, lease, license, arrangement and understanding is in full
force and is the legal, valid and binding obligation of the Company
and its subsidiaries and is enforceable as to them is accordance with
its terms. Each of the Company and each Subsidiary enjoys peaceful
and undisturbed possession under all material leases and licenses
under which it is operating. Neither the Company nor any Subsidiary
is a party to or bound by any contract, agreement, instrument, lease,
license, arrangement or understanding, or subject
6
<PAGE>
to any charter or other restriction, which has had or may in the
future be reasonably expect to have a material adverse effect on
the general affairs, business, financial position, shareholders'
equity or results of operations of the Company and its
subsidiaries, taken as a whole. Neither the Company nor any
Subsidiary is in violation or breach of, or in default with
respect to, any term of its certificate of incorporation (or
other charter document) or by-laws;
(l) The Company, directly or indirectly, holds good and
marketable title to each of the vessels listed on Schedule IV hereto,
subject only to the liens listed therein and maritime liens in the
ordinary course of business. Each such vessel is duly registered
under the laws of the jurisdiction listed opposite its name on
Schedule IV hereto;
(m) The Company is not an "investment company", as such term is
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act"); and
The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "the Effective Date" shall mean each date
that the Registration Statement and any post-effective amendment or
amendments thereto became or become effective. "Execution Time" shall mean
the date and time that this Agreement is executed and delivered by the
parties hereto. "Basic Prospectus" shall mean the prospectus referred to
in paragraph (a) above contained in the Registration Statement at the
Effective Date including, in the case of a Non-Delayed Offering, any
Preliminary Final Prospectus. "Preliminary Final Prospectus" shall mean
any preliminary prospectus which describes the Shares and the offering
thereof and is used prior to filing of the Final Prospectus. "Final
Prospectus" shall mean the prospectus relating to the Shares that is first
filed pursuant to Rule 424(b) after the Execution Time, together with the
Basic Prospectus or, if, in the case of a Non-Delayed Offering, no filing
pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Shares, including the Basic Prospectus, included
in the Registration Statement at the Effective Date. "Registration
Statement" shall mean the registration statement referred to in paragraph
(a) above, including incorporated documents, exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto becomes effective prior to the
First Time of Delivery (as defined in Section 4 hereof), shall also mean
such registration statement as so amended. Such term shall include any
Rule 430A Information deemed to be included therein at the Effective Date
as provided by Rule 430A. "Rule 415," "Rule 424," "Rule 430A," "Regulation
S-K" and "Regulation S-X" refer to such rules or regulation under the Act.
"Rule 430A Information" means information with respect to the Shares and
the offering thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A. Any reference
herein to the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as
the case may
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<PAGE>
be; and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall
be deemed to refer to and include the filing of any document under the
Exchange Act after the Effective Date of the Registration Statement or the
issue date of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be, deemed to be incorporated therein by
reference. A "Non-Delayed Offering" shall mean an offering of securities
which is intended to commence promptly after the effective date of a
registration statement, with the result that, pursuant to Rules 415 and
430A, all information (other than Rule 430A Information) with respect to
the securities so offered must be included in such registration statement
at the effective date thereof. A "Delayed Offering" shall mean an offering
of securities pursuant to Rule 415 which does not commence promptly after
the effective date of a registration statement, with the result that only
information required pursuant to Rule 415 need be included in such
registration statement at the effective date thereof with respect to the
securities so offered. Whether the offering of the Shares is a Non-Delayed
Offering or a Delayed Offering shall be set forth in Schedule I hereto.
(B) Each of the Selling Stockholders severally represents and
warrants to, and agrees with, each of the Underwriters and the Company
that:
(a) All consents, approvals, authorizations and orders, if any,
necessary for the execution and delivery by such Selling Stockholder
of this Agreement, the International Underwriting Agreement, the Power
of Attorney and the Custody Agreement hereinafter referred to, and for
the sale of and delivery of the Shares to be sold by such Selling
Stockholder hereunder and under the International Underwriting
Agreement, have been obtained; subject, however, to consents,
approvals, authorizations and orders, the violations of which
individually or in the aggregate, would not have a material adverse
effect on the business, financial condition or results of operations
of the Company and its subsidiaries taken as a whole or on the ability
of the Underwriters to receive good and valid title to the Shares
being sold hereunder and to the exception that orders or other
authorizations may be required under the 1933 Act or under state
securities or Blue Sky laws in connection with the purchase and
distribution by the Underwriters of the Shares to be sold by such
Selling Stockholder; and such Selling Stockholder has full right,
power and authority to enter into this Agreement, the International
Underwriting Agreement, the Power of Attorney and the Custody
Agreement and to sell, assign, transfer and deliver the Shares to be
sold by such Selling Stockholder hereunder and under the International
Underwriting Agreement;
(b) The sale of the Shares to be sold by such Selling
Stockholder hereunder and under the International Underwriting
Agreement and the compliance by such Selling Stockholder with all of
the provisions of this Agreement, the International Underwriting
Agreement, the Power of Attorney and the Custody Agreement, and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder is bound or to which any of the property or
assets of such Selling Stockholder is subject, subject, however, to
conflicts, breaches or violations which individually or in the
aggregate would not have a material adverse effect on the business,
financial condition or results of operations of such Selling
Stockholder or the Company and its subsidiaries taken as a whole or on
the ability of the Underwriters to receive good and valid title to the
Shares being sold hereunder, nor will such action result in any
violation of the provisions of the Articles of Incorporation, By-laws,
governing trust indenture, or other governing instrument, as the case
may be, of such Selling Stockholder or any statute or any order,
8
<PAGE>
rule or regulation of any court or governmental agency or body having
jurisdiction over such Selling Stockholder or the property of such
Selling Stockholder;
(c) Such Selling Stockholder has, and immediately prior to each
Time of Delivery (as defined in Section 4 hereof), when such Selling
Stockholder is selling Shares hereunder, such Selling Stockholder will
have, good and valid title to the Shares to be sold by such Selling
Stockholder hereunder and under the International Underwriting
Agreement, free and clear of all liens, encumbrances, equities or
claims; and, upon delivery of such Shares and payment therefor
pursuant hereto, good and valid title to such Shares, free and clear
of all liens, encumbrances, equities or claims, will pass to the
several Underwriters or the International Underwriters, as the case
may be;
(d) During the period beginning from the date hereof and
continuing to and including the date 365 days after the date of the
Final Prospectus, not to offer, sell, contract to sell or otherwise
dispose of, except as provided hereunder or under the International
Underwriting Agreement, any shares of Stock or any security of the
Company substantially similar thereto, or any other security
convertible into or exchangeable for, or that represents the right to
receive, Stock or any security substantially similar thereto (other
than pursuant to employee stock option plans existing on, or upon the
conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement), without the prior
written consent of the Goldman, Sachs & Co.;
(e) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result
in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(f) To the extent that any statements or omissions made in the
Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus, the Final Prospectus or any amendment or supplement
thereto are made in reliance upon and in conformity with written
information furnished to the Company by such Selling Stockholder
expressly for use therein, such Basic Prospectus, Preliminary Final
Prospectus and the Registration Statement did, and the Final
Prospectus and any further amendments or supplements to the
Registration Statement and the Final Prospectus, when they become
effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Act and
the rules and regulations of the Commission thereunder and, in the
case of the Registration Statement, will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading and, in the case of such other documents, will
not contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the
light of the circumstances under which they are made, not misleading;
(g) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder will deliver to you prior to or
at the First Time of Delivery (as defined in Section 4 hereof) a
properly
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<PAGE>
completed and executed United States Treasury Department Form W-8 or
W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof);
(h) Certificates in negotiable form representing all of the
Shares to be sold by such Selling Stockholder hereunder and under the
International Underwriting Agreement have been placed in custody under
a Custody Agreement, in the form heretofore furnished to you (the
"Custody Agreement"), duly executed and delivered by such Selling
Stockholder to Paul, Weiss, Rifkind, Wharton & Garrison as custodian
(the "Custodian"), and such Selling Stockholder has duly executed and
delivered a Power of Attorney, in the form heretofore furnished to you
(the "Power of Attorney"), appointing James M. Dubin and Kevin J.
O'Brien, and each of them, as such Selling Stockholder's
attorneys-in-fact (each an "Attorney-in-Fact") with authority to
execute and deliver this Agreement on behalf of such Selling
Stockholder, to determine the purchase price to be paid by the
Underwriters and the International Underwriters to the Selling
Stockholders as provided in Section 2 hereof, to authorize the
delivery of the Shares to be sold by such Selling Stockholder
hereunder and otherwise to act on behalf of such Selling Stockholder
in connection with the transactions contemplated by this Agreement,
the International Underwriting Agreement and the Custody Agreement;
and
(i) The Shares represented by the certificates held in custody
for such Selling Stockholder under the Custody Agreement are subject
to the interests of the Underwriters hereunder and the International
Underwriters under the International Underwriting Agreement; the
arrangements made by such Selling Stockholder for such custody, and
the appointment by such Selling Stockholder of the Attorneys-in-Fact
by the Power of Attorney, are to that extent irrevocable; the
obligations of such Selling Stockholder hereunder shall not be
terminated by operation of law, whether by the death or incapacity of
any individual Selling Stockholder or, in the case of an estate or
trust, by the death or incapacity of any executor or trustee or the
termination of such estate or trust, or in the case of a partnership
or corporation, by the dissolution of such partnership or corporation,
or by the occurrence of any other event; if any individual Selling
Stockholder or any such executor or trustee should die or become
incapacitated, or if any such estate or trust should be terminated, or
if any such partnership or corporation should be dissolved, or if any
other such event should occur, before the delivery of the Shares
hereunder, certificates representing the Shares shall be delivered by
or on behalf of such Selling Stockholder in accordance with the terms
and conditions of this Agreement, of the International Underwriting
Agreement and of the Custody Agreement; and actions taken by the
Attorneys-in-Fact pursuant to the Powers of Attorney shall be as valid
as if such death, incapacity, termination, dissolution or other event
had not occurred, regardless of whether or not the Custodian, the
Attorneys-in-Fact, or any of them, shall have received notice of such
death, incapacity, termination, dissolution or other event.
2. PURCHASE AND SALE. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, (a) each
of the Selling Stockholders agrees, severally and not jointly, to sell to
each Underwriter, and each Underwriter agrees, severally and not jointly,
to purchase from each of the Selling Stockholders, at a purchase price per
share as set forth in Schedule I hereto, the number of Firm Shares (to be
adjusted by you so as to eliminate fractional shares) determined by
multiplying the aggregate number of Firm Shares to
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<PAGE>
be sold by each of the Selling Stockholders as set forth opposite their
respective names in Schedule V hereto by a fraction, the numerator of which
is the aggregate number of Firm Shares to be purchased by such Underwriter
as set forth opposite the name of such Underwriter in Schedule II hereto
and the denominator of which is the aggregate number of Firm Shares to be
purchased by all of the Underwriters from all of the Selling Stockholders
hereunder and (b) in the event and to the extent that the Underwriters
shall exercise the election to purchase Optional Shares as provided below,
the Selling Stockholder specified in Schedule V hereto (the "Specified
Selling Stockholder") agrees to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the
Specified Selling Stockholder, at the purchase price per share as set forth
in Schedule I hereto, that portion of the number of Optional Shares as to
which such election shall have been exercised (to be adjusted by you so as
to eliminate fractional shares) determined by multiplying such number of
Optional Shares by a fraction the numerator of which is the maximum number
of Optional Shares which such Underwriter is entitled to purchase as set
forth opposite the name of such Underwriter in Schedule II hereto and the
denominator of which is the maximum number of Optional Shares that all of
the Underwriters are entitled to purchase hereunder.
The Specified Selling Stockholder in Schedule V hereto hereby
grants to the Underwriters the right to purchase at their election up to
2,436,000 Optional Shares, at the purchase price per share set forth in the
paragraph above, for the sole purpose of covering overallotments in the
sale of the Firm Shares. Any such election to purchase Optional Shares may
be exercised from time to time by written notice from you to an
Attorney-in-Fact, given within a period of 30 calendar days after the
Execution Time and setting forth the aggregate number of Optional Shares to
be purchased and the date on which such Optional Shares are to be
delivered, as determined by you but in no event (i) earlier than the First
Time of Delivery (as defined in Section 4 hereof) or, (ii) unless you and
an Attorney-in-Fact otherwise agree in writing, earlier than two or later
than ten business days after the date of such notice.
3. OFFERING OF SHARES. Upon the authorization by you of the
release of the Firm Shares, the several Underwriters propose to offer the
Firm Shares for sale upon the terms and conditions set forth in the Final
Prospectus.
4. DELIVERY AND PAYMENT. Delivery of and payment for the Firm
Shares shall be made on the date and at the time specified in Schedule I
hereto, which date and time may be postponed by agreement between the
Representatives and the Selling Stockholders or as provided in Section 9
hereof (such date and time of delivery and payment for the Firm Shares
being herein called the "First Time of Delivery"). Delivery of and payment
for the Optional Shares shall be on the date and at the time specified by
you as provided above in the written notice given by you of the
Underwriters' election to purchase the Optional Shares, or at such other
time and date as you and an Attorney-in-Fact may agree upon in writing.
Such date and time of delivery of the Optional Shares, if not the First
Time of Delivery, being herein called the "Second Time of Delivery," and
each time and date for delivery is herein called a "Time of Delivery".
Delivery of the Shares shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the
several Underwriters through the Representatives of the purchase price
thereof to or upon the order of the Custodian, by wire transfer in the
funds specified in Schedule I. Delivery of the Shares shall be made at
such location as the Representatives shall reasonably designate at least
one business day in advance of the Time of Delivery for such Shares and
payment for the Shares shall be made at the office specified in
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Schedule I hereto. Certificates in definitive form for the Shares shall be
registered in such names and in such denominations as the Representatives
may request not less than two full business days in advance of the Time of
Delivery for such Shares.
Each of the Selling Stockholders agrees to have the Firm Shares
available for inspection, checking and packaging by the Representatives in
New York, New York, not later than 1:00 PM on the business day prior to the
First Time of Delivery. The Specified Selling Stockholder agrees to have
the Optional Shares available for inspection, checking and packaging by the
Representatives in New York, New York, not later than 1:00 PM on the
business day prior to the Time of Delivery for such Shares.
5. AGREEMENTS. The Company agrees with the several Underwriters
that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and
any amendment thereto, to become effective. Prior to the termination
of the offering of the Shares, the Company will not file any amendment
of the Registration Statement or supplement to the Basic Prospectus
(including the Final Prospectus or any Preliminary Final Prospectus)
unless the Company has furnished to you a copy for your prompt review
prior to filing and will not file any such proposed amendment or
supplement to which you reasonably object. Subject to the foregoing
sentence, the Company will cause the Final Prospectus, properly
completed, and any supplement thereto to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time
period prescribed and will provide evidence reasonably satisfactory to
the Representatives of such timely filing. The Company will promptly
advise the Representatives (i) when the Registration Statement, if not
effective at the Execution Time, and any amendment thereto, shall have
become effective, (ii) when the Final Prospectus, and any supplement
thereto, shall have been filed with the Commission pursuant to Rule
424(b), (iii) when, prior to termination of the offering of the
Shares, any amendment to the Registration Statement shall have been
filed or become effective, (iv) of any request by the Commission for
any amendment of the Registration Statement or supplement to the Final
Prospectus or for any additional information, (v) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any
proceeding for that purpose and (vi) of the receipt by the Company of
any notification with respect to the suspension of the qualification
of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company will use
its best efforts to prevent the issuance of any such stop order and,
if issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Act, any event occurs as a result
of which the Final Prospectus as then supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or supplement
the Final Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will prepare and
file with the Commission, subject to the second sentence of paragraph
(a) of this Section 5, an amendment or supplement which will correct
such statement or omission
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or effect such compliance.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earning statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(d) The Company will furnish to the Representatives and counsel
for the Underwriters, without charge, copies of the Registration
Statement (including exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, as
many copies of any Preliminary Final Prospectus and, prior to 10:00
a.m., New York City time, on the New York Business Day next succeeding
the date of this Agreement and from time to time, copies of the Final
Prospectus and any supplement thereto as the Representatives may
reasonably request. The Company will pay the expenses of printing any
Agreement Among Underwriters, this Agreement, the Blue Sky Memorandum
and any other documents in connection with the offering, purchase,
sale and delivery of the Shares. For the purposes of this Section 4,
"New York Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive
order to close.
(e) Until the date set forth on Schedule I hereto, except for
securities issuable upon conversion of (i) shares of the Company's
Class B Common Stock (the "Class B Common Stock"), (ii) the Company's
41/2% Convertible Subordinated Notes due July 1, 1997 or (iii) the
issuance of shares or options pursuant to employee benefit plans, the
Company will not, without the prior written consent of Goldman, Sachs
& Co., offer, sell or contract to sell, or otherwise dispose of,
directly or indirectly, or announce the offering of, any shares of
Stock or any security of the Company substantially similar thereto, or
any other security convertible into or exchangeable for, or that
represents the right to receive, shares of Stock or any security
substantially similar thereto.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters, as to the Shares to be delivered at each
Time of Delivery, to purchase the Shares shall be subject to the accuracy
of the representations and warranties on the part of the Company and of the
Selling Stockholders contained herein as of the Execution Time and such
Time of Delivery, to the accuracy of the statements of the Company and of
the Selling Stockholders made in any certificates pursuant to the
provisions hereof, to the performance by the Company and by each of the
Selling Stockholders of its obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement has not become effective prior
to the Execution Time, unless the Representatives agree in writing to
a later time, the Registration Statement will become effective not
later than (i) 6:00 p.m. New York City time, on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 p.m. New York City time on such date or
(ii) 12:00 Noon on the business day following the day on which the
public offering price was determined, if such determination occurred
after 3:00 p.m. New York City time on such date; if filing of the
Final Prospectus, or any supplement thereto, is required pursuant to
Rule 424(b), the
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Final Prospectus, and any such supplement, shall have been filed in
the manner and within the time period required by Rule 424(b); and no
stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have furnished to the Underwriters the
opinion of Paul, Weiss, Rifkind, Wharton & Garrison ("Paul Weiss"),
counsel for the Company, dated such Time of Delivery, to the effect
that:
(i) This Agreement and the International Underwriting
Agreement have been duly executed and delivered by the Company;
(ii) No consent, approval, authorization, order,
registration or qualification of or with any New York or federal
court or governmental agency or body is required for the sale of
the Shares or the consummation by the Company of the transactions
contemplated by the Final Prospectus, this Agreement or the
International Underwriting Agreement, except such as have been
obtained under the Act and such consents, approvals,
authorizations, registrations or qualifications as may be
required under state or foreign securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by
the Underwriters and the International Underwriters;
(iii) Except as noted below, the last sentence of the first
paragraph, the first sentence of the second paragraph and the
entire third paragraph of the section of the Final Prospectus
relating to the Shares captioned "Certain Considerations --
Taxation of the Company" contain a fair and accurate general
description of the U.S. Federal tax provisions discussed therein.
With respect to the last sentence of the first paragraph of the
section of the Prospectus relating to the Shares captioned
"Certain Considerations -- Taxation of the Company," no opinion
is expressed with respect to whether the exemption of Section 883
of the Internal Revenue Code of 1986 is available or applicable
to the Company or any of its subsidiaries;
(iv) Assuming that New York law is applicable, upon
delivery of the Shares pursuant to this Agreement and the
International Underwriting Agreement and payment therefor as
contemplated herein and therein, good and valid title to the
Shares, free and clear of all liens, encumbrances, equities or
claims, shall be transferred to each of the several Underwriters
and International Underwriters who purchase the Shares in good
faith and without notice of any lien, encumbrance, equity or
claim or any other adverse claim within the meaning of the
Uniform Commercial Code of the State of New York;
(v) The Company is not an "investment company" as such term
is defined in the Investment Company Act;
In addition, such counsel shall state that on the basis of
the participation of such counsel in conferences at which the
contents of the Registration Statement and the Final Prospectus
and related matters were discussed, but
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without independent verification by such counsel of the accuracy,
completeness or fairness of the statements contained in the
Registration Statement, the Final Prospectus, any amendment or
supplement thereto or any documents incorporated by reference in
the Final Prospectus or any amendment or supplement thereto, that
they have no knowledge that (other than the financial statements,
schedules and other financial or statistical data which are or
should be contained therein, as to which such counsel need
express no statement):
(1) The documents incorporated by reference in the
Final Prospectus or any further amendment or supplement
thereto made by the Company prior to such Time of Delivery,
when they became effective or were filed with the
Commission, as the case may be, (A) did not comply as to
form in all material respects with the requirements of the
Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and (B) contained
in the case of a registration statement which became
effective under the Act, an untrue statement of a material
fact, or omitted to state a material fact required to be
stated therein or necessary to make the statements therein
not misleading, or, in the case of other documents which
were filed under the Exchange Act with the Commission,
contained an untrue statement of a material fact or omitted
to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made when such documents were so filed, not
misleading;
(2)(A) The Registration Statement and the Final Prospectus
and any further amendment and supplements thereto made by the
Company prior to such Time of Delivery did not comply as to form
in all material respects with the requirements of the Act and the
rules and regulations thereunder; (B) as of their respective
effective dates, the Registration Statement or any further
amendment thereto made by the Company prior to such Time of
Delivery contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that,
as of its date, the Final Prospectus or any further amendment or
supplement thereto made by the Company prior to such Time of
Delivery contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances in which they were
made, not misleading or that, as of such Time of Delivery, the
Final Prospectus or any further amendment or supplement thereto
made by the Company prior to such Time of Delivery contains an
untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; and (C)
any amendment to the Registration Statement required to be filed
with the Commission or of any contracts or other documents of a
character required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into the
Final Prospectus or required to be described in the Registration
Statement or the Final Prospectus which are not filed or
incorporated by reference or described as required.
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(c) The Company shall have furnished to the Underwriters the
opinion of Arnaldo Perez, Esq., General Counsel for the Company, dated
such Time of Delivery, to the effect that:
(i) To the knowledge of such counsel, the Company has all
necessary consents, authorizations, approvals, orders,
certificates and permits of and from, and declarations and
filings with, all federal, state, local and other governmental
authorities, to own, lease, license, and use its properties and
assets and to conduct its business in the manner described in the
Final Prospectus (except for such consents, authorizations,
approvals, orders, licenses, certificates, permits, declarations
and filings, which the failure to have obtained, individually or
in the aggregate, does not and can reasonably be expected in the
future not to have a material adverse effect on the general
affairs, business, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, taken
as a whole);
(ii) To the knowledge of such counsel, HAL Antillen N.V.
("HAL") has all necessary consents, authorizations, approvals,
orders, certificates and permits of and from, and declarations
and filings with, all federal, state, local, and other
governmental authorities, to own, lease, license, and use its
properties and assets and to conduct its business in the manner
described in the Final Prospectus (except for such consents,
authorizations, approvals, orders, licenses, certificates,
permits, declarations and filings, which the failure to have
obtained, individually or in the aggregate, does not, and can
reasonably be expected in the future not to, have a material
adverse effect on the general affairs, business, financial
position, shareholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole);
(iii) Each of the Subsidiaries has been duly qualified as a
foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which
it owns or leases properties, or conducts any business which
requires such qualification (except where the failure to be so
qualified or in good standing does not, and can reasonably be
expected in the future not to, have a material adverse effect
upon the general affairs, business, financial position,
shareholders' equity or results of operations of the Company and
its subsidiaries, taken as a whole);
(iv) To the knowledge of such counsel, except as set forth
in Schedule III to this Agreement, all of the issued shares of
capital stock of each Subsidiary are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances,
security interests or claims;
(v) To the knowledge of such counsel, and other than as set
forth in the Final Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its
Subsidiaries is a party or of which any property of the Company
or any of its Subsidiaries is the subject which, could reasonably
be expected to individually or in the aggregate have a material
adverse effect on the general affairs, business, financial
position, shareholders' equity or results of
16
<PAGE>
operations of the Company and its subsidiaries, taken as a whole;
and, to the knowledge of such counsel, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others;
(vi) To the knowledge of such counsel, the compliance by the
Company with all of the provisions this Agreement and the
International Underwriting Agreement and the consummation of the
transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any material
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the
Company or any of the Subsidiaries is a party or by which the
Company or any of the Subsidiaries is bound or to which any of
the property or assets of the Company or any of the Subsidiaries
is subject, nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws of the
Company or, to the knowledge of such counsel, any statute or any
order, rule or regulation binding on the Company or any of the
Subsidiaries or any of their properties;
(vii) To the knowledge of such counsel, the Company is not
(A) in violation of, or in default with respect to, any law,
rule, regulation, order, judgment or decree, except as may be
properly described in the Final Prospectus or such as in the
aggregate do not now have, and can reasonably be expected in the
future not to have, a material adverse effect on the general
affairs, business, financial position, shareholders' equity or
results of operations of the Company and the Subsidiaries, taken
as a whole; nor is the Company required to take any action in
order to avoid any such violation or default; (B) in violation or
breach of, or in default with respect to, complying with any
material provision of any contract, agreement, instrument, lease,
license, arrangement or understanding which is material to the
Company and its Subsidiaries, taken as a whole; or (C) in
violation or breach of, or in default with respect to, any term
of its certificate of incorporation (or other charter document)
or by-laws;
(viii) The Company, directly or indirectly, holds good and
marketable title to each of the vessels listed on Schedule IV
hereto, subject only to the liens disclosed on Schedule IV and
maritime liens in the ordinary course of business;
(d) The Company shall have furnished to the Underwriters the
opinion of Tapia Linares y Alfaro, Panamanian counsel for the Company,
dated such Time of Delivery, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Republic of Panama, with power and authority (corporate and
other) to own, lease, license and use its properties and conduct
its business as described in the Final Prospectus;
(ii) This Agreement and the International Underwriting
Agreement have been duly authorized by the Company;
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<PAGE>
(iii) No consent, approval, authorization, order,
registration or qualification of or with any Panamanian court or
governmental agency or body is required for the sale of the
Shares, or the consummation by the Company of the transactions
contemplated by this Agreement and the International Underwriting
Agreement, except such as have been obtained under the Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under state or foreign
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters and the
International Underwriters;
(iv) The Company has an authorized capitalization as set
forth or incorporated by reference in the Final Prospectus, and
all of the issued shares of capital stock of the Company
including the Shares being delivered at such Time of Delivery
have been duly and validly authorized and issued and are fully
paid and non-assessable; and
(v) To the knowledge of such counsel, the Company is not in
violation of, or in default with respect to, any law, rule,
regulation, order, judgment or decree, except as may be properly
described in the Final Prospectus or such as in the aggregate do
not now have, and can reasonably be expected in the future not to
have, a material adverse effect on the general affairs, business,
financial position, shareholders' equity or results of operations
of the Company and the Subsidiaries, taken as a whole.
(vi) The Stock conforms in all material respects to the
description of the Stock in the Final Prospectus.
(vii) Good and valid title to the Shares, free and clear of
all liens, encumbrances, equities or claims, has been transferred
to each of the several Underwriters or International
Underwriters, as the case may be, who purchase the Shares in good
faith and without notice of any such lien, encumbrance, equity or
claim or any other adverse claim.
(e) The Company shall have furnished to the Representatives the
opinion of Clifford Chance, counsel to HAL, dated such Time of
Delivery, to the effect that:
(i) HAL is a "naamloze vennootschap" (company with limited
liability) duly organized and validly existing as a corporation
in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to
own, lease, license and use its properties and conduct its
business as described in the Final Prospectus; and
(ii) All of the issued shares of capital stock of HAL have
been duly and validly authorized and issued, and are fully paid.
(f) The Company shall have furnished to the Underwriters the
opinions of local counsel, each dated such Time of Delivery, to the
effect that each vessel listed on Schedule IV hereto is duly
registered, except as noted on Schedule IV, under the laws
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of the jurisdiction listed opposite its name on Schedule IV.
Each such opinion described in 6(b), (c), (d), (e) and (f) above
shall be in form and substance reasonably satisfactory to the
Representatives. In rendering such opinions described in 6(b), (c),
(d), (e) and (f) above, each such counsel may rely (A) as to matters
involving the application of laws other than the laws of the
jurisdiction in which such counsel practices, to the extent such
counsel deems proper and to the extent specified in such opinion, upon
an opinion or opinions (in form and substance reasonably satisfactory
to counsel for the Underwriters) of other counsel, reasonably
acceptable to counsel for the Underwriters, familiar with the
applicable laws; (B) as to matters of fact, to the extent such counsel
deems proper, on certificates of responsible officers of the Company
or of any of the Subsidiaries; and (C) to the extent such counsel
deems proper, upon written statements or certificates of officers of
departments of various jurisdictions having custody of documents
respecting the corporate existence or good standing of the Company or
of any of the Subsidiaries, provided that copies of any such
statements or certificates shall be delivered to counsel for the
Underwriters, and on the absence of a telegram from the Commission.
References to the Final Prospectus in paragraphs 6(b) through (e)
include any amendments or supplements thereto filed prior to such Time
of Delivery.
(g) The respective counsel for each of the Selling Stockholders,
as indicated in Schedule V hereto, each shall have furnished to you
their written opinion with respect to each of the Selling Stockholders
for whom they are acting as counsel, dated such Time of Delivery, in
form and substance reasonably satisfactory to you, to the effect that:
(i) A Power of Attorney and a Custody Agreement have been
duly executed and delivered by such Selling Stockholder and
constitute valid and binding agreements of such Selling
Stockholder in accordance with their terms, subject to
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally and general equitable principles;
(ii) This Agreement and the International Underwriting
Agreement have been duly executed and delivered by or on behalf
of such Selling Stockholder; and the sale of the Shares to be
sold by such Selling Stockholder hereunder and the compliance by
such Selling Stockholder with all of the provisions of this
Agreement and the International Underwriting Agreement, the
Power-of-Attorney and the Custody Agreement and the consummation
of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any terms or
provisions of, or constitute a default under, any statute,
indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument known to such counsel to which
such Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or assets of
such Selling Stockholder is subject, nor will such action result
in any violation of the provisions of the Articles of
Incorporation, By-laws, governing trust indenture or other
governing instrument, as the case may be, of such Selling
Stockholder or any order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over such Selling Stockholder
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<PAGE>
or the property of such Selling Stockholder, except that such
counsel need express no opinion as to compliance with the Act or
any state or foreign securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the
Underwriters;
(iii) To the knowledge of such counsel, no consent,
approval, authorization or order of any court or governmental
agency or body is required for the consummation of the
transactions contemplated by this Agreement and the International
Underwriting Agreement in connection with the Shares to be sold
by such Selling Stockholder hereunder, except such consent,
approvals, authorizations or orders which have been duly obtained
and are in full force and effect, such as have been obtained
under the Act and such as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution
of such Shares by the Underwriters or the International
Underwriters;
(h) Holland & Knight, special U.S. counsel to the Selling
Stockholders, shall have furnished to you their written opinion, dated
such Time of Delivery, in form and substance reasonably satisfactory
to you, to the effect that:
(i) Immediately prior to such Time of Delivery, such
Selling Stockholder had good and valid title to the Shares to be
sold at such Time of Delivery by such Selling Stockholder under
this Agreement and the International Underwriting Agreement, free
and clear of all liens, encumbrances, equities or claims, and
full right, power and authority to sell, assign, transfer and
deliver the Shares to be sold by such Selling Stockholder
hereunder and thereunder; and
(ii) Good and valid title to such Shares, free and clear of
all liens, encumbrances, equities or claims, has been transferred
to each of the several Underwriters or International
Underwriters, as the case may be, who have purchased such Shares
in good faith and without notice of any such lien, encumbrance,
equity or claim or any other adverse claim within the meaning of
the Uniform Commercial Code.
In rendering the opinion in paragraph (iv), such counsel may
rely upon a certificate of such Selling Stockholder in respect of
matters of fact as to ownership of, and liens, encumbrances,
equities or claims on, the Shares sold by such Selling
Stockholder, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such
certificate;
(i) The Underwriters shall have received from Sullivan &
Cromwell, counsel for the Underwriters, such opinion or opinions,
dated such Time of Delivery, with respect to the validity of the
Shares, the Registration Statement, the Final Prospectus (together
with any supplement thereto) and other related matters as the
Underwriters may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request
for the purpose of enabling them to pass upon such matters.
(j) The Company shall have furnished to the Underwriters a
certificate of the
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Company, dated such Time of Delivery and signed by the Chairman of the
Board or the President and the principal financial or accounting
officer of the Company, and the Selling Stockholders shall have
furnished to the Underwriters at each Time of Delivery at which such
Selling Stockholder is delivering Shares, certificates of the Selling
Stockholders, respectively, dated such Time of Delivery, satisfactory
to you as to the accuracy of the representations and warranties of the
Company and the Selling Stockholders, respectively, herein at and as
of such Time of Delivery as to the performance by the Company and the
Selling Stockholders of all of their respective obligations hereunder
to be performed at or prior to such Time of Delivery and as to such
other matters as you may reasonably request and the Company shall have
furnished or caused to be furnished a certificate to the effect that
the signers of such certificate have carefully examined the
Registration Statement, the Final Prospectus, any supplement to the
Final Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects on
and as of such Time of Delivery with the same effect as if made
on such Time of Delivery and the Company has complied with all
the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Time of Delivery;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent audited financial
statements included in the Final Prospectus (exclusive of any
supplement thereto), there has been no material adverse change in
the condition (financial or other), earnings, business or
properties of the Company and its Subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto).
(k) At such Time of Delivery, Price Waterhouse LLP shall have
furnished to the Underwriters a letter or letters (which may refer to
letters previously delivered to one or more of the Representatives),
dated as of such Time of Delivery, in form and substance satisfactory
to the Representatives, confirming that they are independent
accountants within the meaning of the Act and the Exchange Act and the
respective applicable published rules and regulations thereunder and
stating in effect that:
(i) in their opinion the audited financial statements and
schedules included or incorporated in the Registration Statement
and the Final Prospectus and reported on by them comply in form
in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related
published rules and regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
subsidiaries; carrying out certain specified
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procedures (but not an examination in accordance with generally
accepted auditing standards) which could not necessarily reveal
matters of significance with respect to the comments set forth in
such letter, a reading of the minutes of the meetings of the
stockholders, directors and executive and audit committees of the
Company and its subsidiaries; and inquiries of certain officials
of the Company who have responsibility for financial and
accounting matters of the Company and its subsidiaries as to
transactions and events subsequent to the date of the most recent
audited financial statements in or incorporated in the Final
Prospectus, nothing came to their attention which caused them to
believe that:
(1) any unaudited financial statements included or
incorporated in the Registration Statement and the Final
Prospectus do not comply in form in all material respects
with applicable accounting requirements and with the
published rules and regulations of the Commission with
respect to financial statements included or incorporated in
quarterly reports on Form 10-Q under the Exchange Act; and
said unaudited financial statements are not in conformity
with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited
financial statements included or incorporated in the
Registration Statement and the Final Prospectus;
(2) with respect to the period subsequent to the date
of the most recent financial statements (other than any
capsule information), audited or unaudited, in or
incorporated in the Registration Statement and the Final
Prospectus, there were any changes, at a specified date not
more than five business days prior to the date of the
letter, in the consolidated capital stock (other than
issuances of capital stock upon exercise of options and
stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in
each case which were outstanding on the date of the latest
balance sheet included or incorporated by reference in the
Final Prospectus) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or net assets
as compared with the amounts shown on the most recent
consolidated balance sheet included or incorporated in the
Registration Statement and the Final Prospectus, or for the
period from the date of the most recent financial statements
included or incorporated in the Registration Statement and
the Final Prospectus to such specified date there were any
decreases, as compared with the corresponding period in the
preceding year in consolidated net revenues, operating
income, net income or earnings per share, except in all
instances for changes or decreases set forth in such letter,
in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof
unless said explanation is not deemed necessary by the
Representatives; or
(3) the amounts included in any unaudited "capsule"
information included or incorporated in the Registration
Statement and the Final
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Prospectus do not agree with the amounts set forth in the
unaudited financial statements for the same periods or were
not determined on a basis substantially consistent with that
of the corresponding amounts in the audited financial
statements included or incorporated in the Registration
Statement and the Final Prospectus.
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries which is subject to the Company's
system of internal accounting controls) set forth in the
Registration Statement and the Final Prospectus, including the
information included or incorporated in Items 6, 7 and 11 of the
Company's Annual Report on Form 10-K, incorporated in the
Registration Statement and the Prospectus, and the information
included in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included or
incorporated in the Company's Quarterly Reports on Form 10-Q,
incorporated in the Registration Statement and the Final
Prospectus, agrees with the accounting records of the Company and
its subsidiaries, excluding any questions of legal
interpretation; and
(iv) if pro forma financial statements are included or
incorporated in the Registration Statement and the Final
Prospectus, on the basis of a reading of the unaudited pro forma
financial statements, carrying out certain specified procedures,
inquiries of certain officials of the Company and the acquired
company who have responsibility for financial and accounting
matters, and proving the arithmetic accuracy of the application
of the pro forma adjustments to the historical amounts in the pro
forma financial statements, nothing came to their attention which
caused them to believe that the pro forma financial statements do
not comply in form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X or that
the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of such statements.
References to the Final Prospectus in this paragraph (j) include
any supplement thereto at the date of the letter.
In addition, except as provided in Schedule I hereto, at the
Execution Time, Price Waterhouse LLP shall have furnished to the
Representatives a letter or letters, dated as of the Execution Time,
in form and substance satisfactory to the Representatives, to the
effect set forth above.
(l) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement thereto), there shall not have been (i)
any change or decrease specified in the letter or letters referred to
in paragraph (k) of this Section 6 or (ii) any change, or any
development involving a prospective change, in or affecting the
business or properties of the Company and its subsidiaries, taken as a
whole, the effect of which, in any case referred to in clause (i) or
(ii) above,
23
<PAGE>
is, in the reasonable judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Shares as contemplated by the Registration
Statement (exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement thereto).
(m) Subsequent to the Execution Time, there shall not have been
any decrease in the rating of any of the Company's debt securities by
any "nationally recognized statistical rating organization" (as
defined for purpose of Rule 436(g) under the Act) or any notice given
of any intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate the
direction of the possible change.
(n) Prior to such Time of Delivery, the Company and the Selling
Stockholders shall have furnished to the Representatives such further
information, certificates and documents as the Representatives may
reasonably request.
(o) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange; (ii) a
suspension or material limitation in trading in the Company's
securities on the New York Stock Exchange; (iii) a general moratorium
on commercial banking activities in New York declared by either
Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if
the effect of any such event specified in this clause (iv) is in your
reasonable judgment so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or
the delivery of the Shares being delivered at such Time of Delivery on
the terms and in the manner contemplated by the Prospectus.
(p) The Representatives shall have received the written
agreement of each of Ted Arison and Micky Arison, in form and
substance satisfactory to the Representatives, to the effect that, for
a period of 365 days after the date of the Final Prospectus, such
person has agreed (i) not to offer, sell or contract to sell, or
otherwise dispose of, directly or indirectly, or announce the offering
of, any shares of Stock or Class B Common Stock or any security of the
Company substantially similar thereto, or any other security
convertible into or exchangeable for, or that represents the right to
receive, shares of Stock or Class B Common Stock or any security of
the Company substantially similar thereto, other than the conversion
of shares of Class B Stock into shares of Stock, without the prior
written consent of Goldman, Sachs & Co. and (ii) not to consent to any
disposition of the nature described in clause (i) of this Section 6(p)
by any trust that owns shares of Stock or Class B Common Stock or any
security of the Company substantially similar thereto, or any other
security convertible into or exchangeable for, or that represents the
right to receive, shares of Stock or Class B Common Stock or any
security of the Company substantially similar thereto, over which such
person has voting or dispositive power, other than the conversion of
shares of Class B Stock into shares of Stock, without the prior
written consent of Goldman, Sachs & Co.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and
24
<PAGE>
certificates mentioned above or elsewhere in this Agreement shall not be in
all material respects reasonably satisfactory in form and substance to the
Representatives and counsel for the Underwriters, this Agreement and all
obligations of the Underwriters hereunder may be canceled at, or at any
time prior to, such Time of Delivery by the Representatives. Notice of
such cancellation shall be given to the Company and the Selling
Stockholders in writing or by telephone or telegraph confirmed in writing.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the
Shares provided for herein is not consummated by reason of any failure on
the part of the Company or any Selling Stockholder to perform any covenant
or agreement or satisfy any condition of this Agreement to be performed or
satisfied by it or any Selling Stockholder, the sole liability of the
Company to each of the Underwriters, in addition to the obligations of the
Company pursuant to Sections 5(d) and 8, will be for the Company to
reimburse the Underwriters for all out-of-pocket expenses approved in
writing by you, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale
and delivery of the Shares not so delivered. Otherwise, if this Agreement
shall be terminated, the Company shall not then be under any liability to
any Underwriter except as provided in Sections 5(d) and 8 hereof. If this
Agreement shall be terminated as provided herein, the Selling Stockholders
shall not have any liability to the Underwriters except as provided in
Section 8 hereof.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers,
employees and agents of each Underwriter and each person who controls any
Underwriter within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the registration statement for the registration of the Shares
as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in
any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable
in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein; and, provided, further, that the
Company will not be liable to any Underwriter with respect to any loss,
claim, damage or liability arising out of or based on any untrue statement
or alleged untrue statement or omission or alleged omission to state a
material fact in the Preliminary Final Prospectus which is corrected in the
Final Prospectus if the person asserting any such loss, claim, damage or
liability purchased Shares from such Underwriter but was not sent or given
a copy of the Final Prospectus at or prior to the written confirmation of
the sale of such Shares to such person. This indemnity agreement will be
in addition to any liability which the Company may otherwise have.
25
<PAGE>
(b) Each of the Selling Stockholders, severally in proportion to
the number of Shares to be sold by such Selling Stockholder, and not
jointly, agrees to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each
person who controls any Underwriter within the meaning of either the Act or
the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or state statutory
law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration
of the Shares as originally filed or in any amendment thereof, or in the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus,
or in any amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the registration statement for the
registration of the Shares as originally filed or in any amendment thereof,
or in the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, or in any amendment thereof or supplement thereto in reliance
upon and in conformity with written information furnished to the Company by
such Selling Stockholder expressly for use therein, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that
such Selling Stockholder will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any
Underwriter through the Representatives specifically for inclusion therein;
and, provided, further, that such Selling Stockholder will not be liable to
any Underwriter with respect to any loss, claim, damage or liability
arising out of or based on any untrue statement or alleged untrue statement
or omission or alleged omission to state a material fact in the Preliminary
Final Prospectus which is corrected in the Final Prospectus if the person
asserting any such loss, claim, damage or liability purchased Shares from
such Underwriter but was not sent or given a copy of the Final Prospectus
at or prior to the written confirmation of the sale of such Shares to such
person. This indemnity agreement will be in addition to any liability
which the Selling Stockholders may otherwise have.
(c) Each Underwriter severally agrees to indemnify and hold
harmless the Company and each Selling Stockholder, and each of their
respective directors and officers and each person who controls the Company
or such Selling Stockholder within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the
Company or such Selling Stockholder, as the case may be, to each
Underwriter, but only with reference to written information relating to
such Underwriter furnished to the Company by or on behalf of such
Underwriter through the Representatives specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement
will be in addition to any liability which any Underwriter may otherwise
have.
(d) Promptly after receipt by an indemnified party under
subsection (a), (b) or (c) above of notice of the commencement of any
action, such indemnified party shall, if a claim in
26
<PAGE>
respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party
(who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs
of investigation conducted by the Underwriters at the request of the
Company. Notwithstanding anything to the contrary contained herein, an
indemnifying party will not be liable for any settlement of any claim or
action effected without its prior written consent.
(e) In the event that the indemnity provided in paragraph (a),
(b) or (c) of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, then each indemnifying party
agrees to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses") to
which an indemnified party may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company and
the Selling Stockholders on the one hand and by the Underwriters on the
other from the offering of the Shares. If the allocation provided by the
immediately preceding sentence is unavailable for any reason or if the
indemnified party failed to give the notice required under subsection (d)
above, then each indemnifying party shall contribute in such proportion as
is appropriate to reflect not only such relative benefits but also the
relative fault of the Company and the Selling Stockholders on the one hand
and of the Underwriters on the other in connection with the statements or
omissions which resulted in such Losses as well as any other relevant
equitable considerations. Benefits received by the Company and the Selling
Stockholders on the one hand shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses), and benefits
received by the Underwriters on the other hand shall be deemed to be equal
to the total underwriting discounts and commissions, in each case as set
forth on the cover page of the Final Prospectus. Relative fault shall be
determined by reference to whether any alleged untrue statement or
27
<PAGE>
omission relates to information provided by the Company or the Selling
Stockholders on the one hand or the Underwriters on the other, and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission and the failure of an
indemnified party to give notice under subsection (d) above (to the extent
such failure is prejudicial to an indemnifying party). The Company, each
of the Selling Stockholders and the Underwriters agree that it would not be
just and equitable if contribution were determined by pro rata allocation
or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions
of this subsection (e), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. Notwithstanding the provisions of this
paragraph (e), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 8, each person who controls an Underwriter within
the meaning of either the Act or the Exchange Act and each director,
officer, employee and agent of an Underwriter shall have the same rights to
contribution as such Underwriter, and each person who controls the Company
or any Selling Stockholder within the meaning of either the Act or the
Exchange Act, each officer of the Company or any Selling Stockholder who
shall have signed the Registration Statement and each director of the
Company or any Selling Stockholder shall have the same rights to
contribution as the Company or any Selling Stockholder, as the case may be,
subject in each case to the applicable terms and conditions of this
paragraph (e).
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters
shall fail at a Time of Delivery to purchase and pay for any of the Shares
agreed to be purchased by such Underwriter or Underwriters hereunder and
such failure to purchase shall constitute a default in the performance of
its or their obligations under this Agreement, the remaining Underwriters
shall be obligated severally to take up and pay for (in the respective
proportions which the amount of Shares set forth opposite their names in
Schedule II hereto bears to the aggregate amount of Shares set forth
opposite the names of all the remaining Underwriters) the Shares which the
defaulting Underwriter or Underwriters agreed but failed to purchase;
provided, however, that in the event that the aggregate amount of Shares
which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Shares set forth in
Schedule II hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Shares, and if such nondefaulting Underwriters do not purchase all the
Shares, this Agreement will terminate without liability to any
nondefaulting Underwriter, the Company or any Selling Stockholder. In the
event of a default by any Underwriter as set forth in this Section 9, such
Time of Delivery shall be postponed for such period, not exceeding seven
days, as the Representatives shall determine in order that the required
changes in the Registration Statement and the Final Prospectus or in any
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if
any, to the Company, any Selling Stockholder and any nondefaulting
Underwriter for damages occasioned by its default hereunder.
10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements
of the Company, the Selling Stockholders or their respective officers and
of the Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or
on behalf of any Underwriter, any Selling Stockholder or the Company or any
of the officers, directors or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Shares. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
11. NOTICES. In all dealings hereunder, you shall act on behalf
of each of the Underwriters, and the parties hereto shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of
any Underwriter made or given by you jointly or by Goldman, Sachs & Co. on
behalf of you as the Representatives; and in all dealings with any Selling
Stockholder hereunder, you and the Company shall be entitled to act and
rely upon any
28
<PAGE>
statement, request, notice or agreement on behalf of such Selling
Stockholder made or given by any or all of the Attorneys-in-Fact for such
Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to the Underwriters in care of Goldman,
Sachs & Co., 85 Broad Street, New York, New York, 10004, Attention:
Registration Department, if to any Selling Stockholder shall be delivered
or sent by mail, telex or facsimile transmission to Holland & Knight, 701
Brickell Avenue, Miami, Florida 33131 with copies to MacFarlanes, 10
Norwich Street, London EC4A 1BD England; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address
of the Company set forth in the Registration Statement, Attention: Legal
Department; provided, however, that any notice to an Underwriter pursuant
to Section 8(d) hereof shall be delivered or sent by mail, telex or
facsimile transmission to such Underwriter at its address set forth in its
Underwriters' Questionnaire, or telex constituting such Questionnaire,
which address will be supplied to the Company or the Selling Stockholders
by Goldman, Sachs & Co. upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
12. SUCCESSORS. This Agreement shall be binding upon, and inure
solely to the benefit of, the Underwriters, the Company and the Selling
Stockholders and, to the extent provided in Section 8 hereof, the officers
and directors and each person who controls the Company, any Selling
Stockholder or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire
or have any right under or by virtue of this Agreement. No purchaser of
any of the Shares from any Underwriter shall be deemed a successor or
assign by reason merely of such purchase.
13. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
14. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one
and the same instrument.
29
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the eight counterparts hereof,
whereupon this letter and your acceptance shall represent a binding
agreement among the Company, the Selling Stockholders and the several
Underwriters.
Very truly yours,
Carnival Corporation
By:.....................................
Name:
Title:
Ted Arison
Arison Foundation, Inc.
The Royal Bank of Scotland Trust
Company (Jersey) Limited, as Trustee
for the Ted Arison Charitable Trust
By:.....................................
Name:
Title:
As Attorney-in-Fact acting on
behalf of each of the Selling
Stockholders named in Schedule V to
this Agreement.
30
<PAGE>
Accepted as of the date hereof:
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
By: . . . . . . . . . . . . . . . . . .
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
31
<PAGE>
SCHEDULE I
Underwriting Agreement dated November __, 1996
Registration Statement No. 333-13997
Representative(s): Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Title, Purchase Price and Description of Shares:
Title: Class A Common Stock, par value $.01 per share
Number of shares: 16,240,000
Maximum number of shares of Optional Shares to cover
overallotments: 2,436,000
Purchase price per share: $.......
Closing Date, Time and Location: November __, 1996, 9:30 a.m., Sullivan &
Cromwell, 125 Broad Street, New York, New York
Specified Funds for Payment of Purchase Price: same-day funds
Type of Offering: Non-Delayed Offering
Date referred to in Section 5(e) after which the Company may offer or sell
shares of Class A Common Stock or securities described in Section 5(e)
without the consent of Goldman, Sachs & Co.: ninety (90) days after the
date of the Underwriting Agreement.
Modification of items to be covered by the letter from Price Waterhouse LLP
delivered pursuant to Section 6(k) at the Execution Time: None
1
<PAGE>
SCHEDULE II
Number of Optional
Shares to be
Total Number of Purchased if
Firm Shares to Maximum Option
Underwriter be Purchased Exercised
----------- --------------- ------------------
Goldman, Sachs & Co . . . . . . . .
Bear, Stearns & Co. Inc.
Lehman Brothers Inc. . . . . . . . .
Merrill Lynch, Pierce, Fenner
& Smith Incorporated . . . . . .
---------- ----------
Total . . . . . . . . . . . . . 16,240,000 2,436,000
---------- ----------
---------- ----------
<PAGE>
SCHEDULE III
SUBSIDIARY CAPITAL
STOCK
OWNERSHIP
Carnival Corporation ("CCL")....................................... _____
HAL Antillen N.V. ("HAL").......................................... CCL*
Festivale Maritime Limited......................................... CCL
Celebration Cruises Inc............................................ CCL
Tropicale Cruises Inc.............................................. CCL
Jubilee Cruises Inc................................................ CCL
HAL Shipping Ltd................................................... HAL
Wind Surf Limited.................................................. HAL
Windstar Limited................................................... WSCL
Wind Spirit Limited................................................. WSCL
Windstar Sail Cruises Limited ("WSCL").............................. HAL
Futura Cruises, Inc................................................. CCL
Utopia Cruises Inc.................................................. CCC
- -------------
* The shares owned by CCL are subject to a pledge in favor of Citibank,
N.A.
1
<PAGE>
SCHEDULE IV
JURISDICTION OF
VESSELS REGISTRATION LIENS
------- --------------- -----
I. Carnival Cruise Lines
1. Celebration............ Liberia First Preferred Ship
Mortgage in favor of the
Swedish National Dept
Office.
2. Jubilee................ Panama None.
3. Tropicale.............. Liberia None.
4. Fantasy................ Liberia First Preferred Ship
Mortgage of Finnish
Export Credit Limited.
5. Festivale.............. Bahamas None.
6. Holiday................ Panama None.
7. Ecstasy................ Liberia First Preferred Ship
Mortgage in favor of
Finnish Export Credit
Limited.
8. Sensation.............. Panama None.
9. Fascination............ Panama None.
10. Inspiration............ Panama None.
11. Imagination............ Panama None.
12. Carnival Destiny....... Panama None.
II. Holland America Line
1. Westerdam.............. Netherlands Mortgage in favor of
Kreditanstalt fur
Wiederaufbau.
2. Noordam................ Netherlands None.
3. Nieuw Amsterdam........ Netherlands None.
4. Rotterdam.............. Netherlands None.
1
<PAGE>
5. Statendam............... Bahamas None.
6. Maasdam................. Bahamas None.
7. Ryndam.................. Bahamas None.
8. Veendam................. Bahamas None.
III. Windstar Sail Cruises
1. Wind Spirit............ Bahamas Mortgage in favor of
Banque Francaise du
Commerce Exterieur
("BFCE") and mortgage
in favor of Banque
Nationale de Paris.
2. Wind Song.............. Bahamas Mortgage in favor of
BFCE.
3. Wind Star ............. Bahamas Mortgage in favor of
BFCE.
<PAGE>
SCHEDULE V
Number of Optional
Shares to be
Total Number of Sold if
Firm Shares Maximum Option
to be Sold Exercised
--------------- ------------------
The Selling Stockholders:
Ted Arison(a) 12,180,000 2,436,000
Arison Foundation, Inc.(b) 2,540,000 0
The Royal Bank of Scotland Trust
Company (Jersey) Limited, as
Trustee for the Ted Arison
Charitable Trust(c)
1,520,000 0
---------- ---------
Total 16,240,000 2,436,000
---------- ---------
---------- ---------
(a) This Selling Stockholder is represented by Holland & Knight of
Miami, Florida.
(b) This Selling Stockholder is represented by Holland & Knight of
Miami, Florida.
(c) This Selling Stockholder is represented by Mourant du Feu & Jeune
of Jersey, Channel Islands and Holland & Knight of Miami,
Florida.
<PAGE>
TAPIA, LINARES Y ALFARO
- --------------------------------------------------------------------------------
ABOGADOS - ATTORNEYS AT LAW
November 11, 1996
Carnival Corporation
3655 N.W. 87th Avenue
Miami, Florida 33178-2428
U.S.A.
Registration Statement on Form S-3
Registration No. 333-13997
Dear Sirs:
In connection with the above-captioned Registration Statement on Form S-3 (the
"Registration Statement"), filed by Carnival Corporation ("the Company") with
the Securities and Exchange Commission pursuant to the Securities Act of 1933,
as amended (the "Act") and the rules and regulations promulgated thereunder
(the "Rules"), we have been requested to render our opinion as to the legality
of the securities being registered thereunder. The Registration Statement
covers an aggregate of 23,345,000 shares of the Company's Class A Common
Stock, par value $0.01 per share (the "Class A Common Stock"), which shares
are being sold by certain selling shareholders (the "Shares").
In this connection, we have examined (i) originals, photocopies or conformed
copies of the Registration Statement, including exhibits and amendments thereto,
(ii) the Amended and Restated Articles of Incorporation and By-Laws of the
Company, each as amended to date, and (iii) records of certain of the Company's
corporate proceedings. In addition, we have made such other examinations of law
and fact as we have considered necessary in order to form a basis of the
opinions hereinafter expressed. In connection with such investigation, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, and the conformity to originals of all documents
submitted to us as photocopies or conformed copies. We have relied as to
matters of fact upon certificates of officers of the Company.
<PAGE>
Carnival Corporation
Page Two
Based on the foregoing, we are of the opinion that:
1. The Company is duly incorporated and validly existing as a corporation in
good standing under the laws of the Republic of Panama.
2. The Shares have been duly authorized and validly issued and are fully paid
and nonassessable.
3. Distributions to the holders of the Class A Common Stock will not be subject
to taxation under the laws of the Republic of Panama. Also, the Company's
income will not be subject to significant taxation under the laws of the
Republic of Panama.
We are members of the Bar of the Republic of Panama. We express no opinion as
to matters of law other than the laws of the Republic of Panama.
We consent to the use of this opinion as an exhibit to the Registration
Statement, or any amendment pursuant to Rule 462 under the Act, and to the
reference to our name under the caption "Validity of Securities" in the
prospectus included in the Registration Statement, or any amendment pursuant to
Rule 462 under the Act. In giving this consent we do not hereby agree that we
come within the category of persons whose consent is required by the Act or the
Rules.
Very truly yours,
TAPIA, LINARES Y ALFARO
/s/Mario E. Correa
Mario E. Correa
<PAGE>
November 11, 1996
Carnival Corporation
3655 N.W. 87th Avenue
Miami, Florida 33178-2428
Registration Statement on Form S-3
Registration No. 333-13997
Dear Sirs:
In connection with the above captioned Registration Statement on
Form S-3 (the "Registration Statement") filed by Carnival Corporation (the
"Company") with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
promulgated thereunder (the "Rules"), we have been requested to render our
opinion as to the matters hereinafter set forth.
In this regard, we have reviewed copies of the Registration Statement
(including the exhibits and amendments thereto) and the United States and
international prospectuses (the "Prospectuses") relating to concurrent United
States and international offerings of an aggregate of 20,300,000 shares of the
Company's Class A Common Stock, par value $.01 per share (the "Class A Common
Stock") and the option to purchase up to 3,045,000 shares of Class A Common
Stock. We have also made such other investigations of fact and law and have
examined the originals, or copies authenticated to our satisfaction, of such
documents, records, certificates or
<PAGE>
Carnival Corporation 2
other instruments as in our judgment are necessary or appropriate to render the
opinion expressed below.
Based on the foregoing, we are of the opinion that the section
entitled "Taxation" (other than the subsection encaptioned "Other
Jurisdictions," as to which we express no opinion) in each of the Prospectuses
contains an accurate general description, under currently applicable law, of the
principal United States Federal income tax considerations that apply to the
Company's Class A Common Stock.
We are members of the Bar of the State of New York and we do not
purport to be experts in the laws of any jurisdiction other than the laws of the
State of New York and the Federal laws of the United States.
We consent to the use of this opinion as an exhibit to the
Registration Statement, or any amendment pursuant to Rule 462 under the Act, and
to the reference to our name under the caption "Validity of Securities" in the
Prospectus included in the Registration Statement, or any amendment pursuant to
Rule 462 under the Act. In giving this consent we do not hereby agree that we
come within the category of persons whose consent is required by the Act or the
Rules.
Very truly yours,
/s/ PAUL, WEISS, RIFKIND, WHARTON & GARRISON
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Amendment No 1 to Registration Statement on Form S-3
of our report dated January 18, 1996, which appears on page 31 of the 1995
Annual Report to Shareholders of Carnival Corporation, which is incorporated by
reference in Carnival Corporation's Annual Report on Form 10-K for the year end
ed November 30, 1995. We also consent to the reference to us under the heading
"Experts" in such Prospectus.
Price Waterhouse LLP
Miami, Florida
October 16, 1996
