FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended November 30, 1999
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to ________________
Commission file number 1-9610
CARNIVAL CORPORATION
(Exact name of registrant as specified in its charter)
Republic of Panama 59-1562976
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3655 N.W. 87th Avenue, Miami, Florida 33178-2428
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (305) 599-2600
Securities registered pursuant to Section 12(b) of the Act:
Name of exchange on
Title of each class which registered
Common Stock New York Stock
($.01 par value) Exchange, Inc.
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No ___
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in any definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ X ]
The aggregate market value of the voting stock held by non-affiliates
of the Registrant is approximately $11,919,000 based upon the closing
market price on February 14, 2000 of a share of Common Stock on the New
York Stock Exchange as reported by the Wall Street Journal.
At February 14, 2000, the Registrant had outstanding 617,254,814 shares of
its Common Stock, $.01 par value.
DOCUMENTS INCORPORATED BY REFERENCE
The information described below and contained in the Registrant's 1999
annual report to shareholders to be furnished to the Commission pursuant to Rule
14a-3(b) of the Exchange Act is shown in Exhibit 13 and is incorporated by
reference into this Annual Report on Form 10-K.
Part and Item of the Form 10-K
Part II
Item 5(a) and (b). Market for the Registrant's Common Equity and Related
Stockholder Matters - Market Information and Holders
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market
Risk
Item 8. Financial Statements and Supplementary Data
The information described below and contained in the Registrant's 2000
definitive Proxy Statement, to be filed with the Commission is incorporated
therein by reference into this Annual Report on Form 10-K.
Part and Item of the Form 10-K
Part III
Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Item 13. Certain Relationships and Related Transactions
PART I
Item 1. Business
A. General
Carnival Corporation was incorporated under the laws of the Republic of
Panama in November 1974. Carnival Corporation, including its consolidated
subsidiaries (referred to collectively as the "Company"), is the world's largest
multiple-night cruise company based on the number of passengers carried,
revenues generated and available capacity. The Company offers a broad range of
cruise brands serving the contemporary cruise sector of the vacation market
through Carnival Cruise Lines ("Carnival"), the premium cruise sector through
Holland America Line ("Holland America") and the luxury cruise sector through
Cunard Line ("Cunard"), Seabourn Cruise Line ("Seabourn") and Windstar Cruises
("Windstar") (collectively the "Wholly Owned Cruise Operations"). The Company
also owns equity interests in Costa Crociere S.p.A. ("Costa"), an Italian cruise
company, and Airtours plc ("Airtours"), an integrated leisure travel group of
companies which also operates cruise ships (collectively the "Affiliated Cruise
Operations"). Costa and Airtours' Sun Cruises target the contemporary cruise
sector.
A summary of the cruise operations of the Company and its affiliates is as
follows:
PERCENTAGE
OWNED BY PRIMARY
CRUISE CARNIVAL NUMBER PASSENGER GEOGRAPHIC
BRAND CORPORATION OF SHIPS CAPACITY(1) MARKET
Wholly Owned Cruise
Operations:
Carnival 100% 14 27,254 North America
Holland America 100% 9 11,742 North America
Cunard (2) 100% 2 2,444 Worldwide
Seabourn (2) 100% 6 1,614 North America
Windstar 100% 4 756 North America
35 43,810
Affiliated Cruise
Operations:
Costa 50%(3) 6 7,103 Europe
Airtours' Sun Cruises 26% 4 4,322 Europe
10 11,425
45 55,235
(1) In accordance with cruise industry practice, all passenger capacities
indicated within this Annual Report on Form 10-K are calculated based on two
passengers per cabin even though some cabins can accommodate three or four
passengers.
(2) In November 1999, the Company acquired the 32% minority interest of Cunard
Line Limited, which owns and operates the Cunard and Seabourn cruise brands, for
$203.5 million. See Note 12 to the Company's Consolidated Financial Statements
in Exhibit 13 to this Annual Report on Form 10-K.
(3) The 50% equity interest of Costa not owned by the Company is owned by
Airtours. Including the Company's interest in Airtours, it beneficially owns 63%
of Costa.
The Company has signed agreements with two shipyards providing for the
construction of additional cruise ships. A summary of new ship agreements for
the Company's Wholly Owned Cruise Operations is as follows:
EXPECTED
SERVICE PASSENGER
VESSEL DATE(1) CAPACITY
Carnival:
Carnival Victory 9/00 2,758
Carnival Spirit 4/01 2,120
Carnival Pride 1/02 2,120
Carnival Legend 8/02 2,120
Carnival Conquest 12/02 2,758
Carnival Glory 8/03 2,758
Total Carnival 14,634
Holland America:
Zaandam 5/00 1,440
Amsterdam 11/00 1,380
Newbuild 10/02 1,820
Newbuild 8/03 1,820
Newbuild 01/04 1,820
Newbuild 09/04 1,820
Total Holland America 10,100
Total (2) 24,734
(1) The expected service date is the date the vessel is expected to begin
revenue generating activities.
(2) The Company also has one option for the construction of an additional
vessel with a passenger capacity of 1,820. No assurance can be given that
this option to construct the vessel will be exercised.
In addition to its cruise operations, the Company 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
Westours cruise/tour packages. Holland America Westours operates 14 hotels in
Alaska and the Canadian Yukon, two luxury dayboats offering tours to the
glaciers of Alaska and the Yukon River, over 280 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 Alaska
Railroad between Anchorage and Fairbanks.
B. Cruise Ship Segment - Wholly Owned Cruise Operations
North American Cruise 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 sightseeing destinations.
According to Cruise Lines International Association ("CLIA"), an industry trade
group, in 1970 approximately 500,000 North American passengers took cruises of
three consecutive nights or more. CLIA estimates that this number reached 5.9
million passengers in 1999, an average compound annual growth rate of 8.9% since
1970. Also, according to CLIA, by the end of 1999 the number of ships in service
totaled 145 with an aggregate capacity of approximately 148,000 lower berths.
CLIA estimates that the number of passengers carried in North America increased
from 5.4 million in 1998 to 5.9 million in 1999 or 8.6%.
CLIA estimates that the number of cruise passengers will grow to
approximately 6.3 million in 2000. CLIA projections indicate that by the end of
2000, 2001, 2002 and 2003, North America will be served by 156, 168,176 and 181
vessels, respectively, having an aggregate capacity of approximately 164,000,
181,000, 198,000 and 209,000 lower berths, respectively. CLIA's estimates of new
ship introductions are based on scheduled ship deliveries and could change. The
lead time for design, construction and delivery of a typical large cruise ship
is approximately two to three years. Additionally, CLIA's estimates of capacity
do not include assumptions related to unannounced ship withdrawals due to age or
changes in itineraries and, accordingly, could indicate a higher percentage
growth in capacity than will actually occur. Nonetheless, management believes
net capacity serving North American cruise passengers will increase over the
next several years.
CLIA's estimate of North American cruise passengers and passenger berths is as
follows:
NORTH AMERICAN NORTH AMERICAN
CRUISE PASSENGER
YEAR PASSENGERS(1) BERTHS(2)
1999 5,900,000(est) 148,000
1998 5,432,000 138,000
1997 5,051,000 118,000
1996 4,659,000 110,000
1995 4,378,000 105,000
(1) Source: CLIA estimates based on passengers carried for at least three
consecutive nights for the calendar year.
(2) Information presented is as of the end of the year.
In spite of the cruise industry's growth since 1970, management believes
cruises only represent 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 three night's stay in a hotel. Only an
estimated 11% of the North American population has ever taken a cruise.
Passengers and Berths
The Company's Wholly Owned Cruise Operations had worldwide cruise
passengers and passenger berths as follows:
CRUISE PASSENGER
YEAR PASSENGERS BERTHS(1)
1999 2,366,000 43,810
1998 2,045,000 39,466
1997 1,945,000 31,078
1996 1,764,000 30,837
1995 1,543,000 26,035
(1) Information presented is as of the end of the Company's fiscal year.
The Company's passenger capacity has grown from 26,035 at November 30, 1995
to 43,810 at November 30, 1999. During 1996, gross capacity increased by 5,960
berths due to delivery of the Inspiration, the Veendam and the Carnival Destiny
which was partially offset by the 1,146 berth decrease due to the sale of the
Festivale, for a total net increase of 4,802. In 1997 gross capacity increased
1,316 berths due to the delivery of the Rotterdam VI which was offset by the
1,075 berth decrease due to the sale of the Rotterdam V for a total net increase
of 241. During 1998, with the delivery of the Elation and the Paradise, the
purchase of the Wind Surf, the acquisition of Cunard and the consolidation of
Seabourn, capacity increased by 8,388 berths. In 1999 capacity increased by
4,344 berths primarily due to the delivery of the Carnival Triumph and the
Volendam.
Cruise Ships and Itineraries
Under the Carnival name, the Company serves the contemporary sector of the
vacation market with 14 ships (the "Carnival Ships"). All of the Carnival Ships
were designed by and built for Carnival, including two of the world's largest,
the Carnival Destiny and the Carnival Triumph. Ten of the Carnival Ships operate
in the Caribbean during all or a portion of the year and two Carnival Ships call
on ports on the Mexican Riviera year round. Carnival Ships also offer cruises to
Alaska, Canada, the Hawaiian Islands, the Bahamas and the Panama Canal.
Through its wholly owned subsidiary, HAL Antillen, N.V. ("HAL"), the
Company operates nine ships serving the premium sector of the vacation market
under the Holland America name (the "Holland America Ships"). HAL also operates
four sailing ships in the luxury cruise sector under the Windstar name (the
"Windstar Ships").
The Holland America Ships offer premium cruises of various lengths in
Alaska, the Caribbean, Panama Canal, Europe, Hawaii, South America and other
worldwide itineraries. Cruise lengths vary from seven to 98 days, with a large
proportion of cruises being seven or ten days in length. Periodically, the
Holland America Ships make longer cruises or operate on special itineraries. For
example, in 1999, the Rotterdam made a 98-day world cruise and the Nieuw
Amsterdam made a series of 14-day South China Sea Explorer cruises. Holland
America will continue to offer these special or 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 Holland America
Ships operate in the Caribbean during fall to spring and in Alaska and Europe
during spring to fall. In order to offer a unique destination , to compete more
effectively with land based vacation alternatives, and to compete with other
cruise lines more effectively while operating in the Caribbean, in December 1997
Holland America introduced into its Caribbean itineraries a private island, Half
Moon Cay. Half Moon Cay is a 2400-acre island acquired by Holland America in
December 1996. Facilities were constructed on the island on 45 acres along a
crescent-shaped white sand beach. The remainder of the island remains
undeveloped. The facilities on Half Moon Cay include bars, shops, restrooms, a
post office, a chapel and an ice cream shop, as well as a food pavilion with
open-air dining shelters and a bandstand.
The four Windstar Ships currently operate in the Caribbean, Europe and
Central America and offer a casual, yet luxurious, cruise experience on board
these modern sail ships.
Under the Cunard brand, the Company operates two ships which offer classic
"Old World" cruising and recreate the golden age of ocean liner travel with a
British style and essence serving the luxury sector of the vacation market.
Cunard's flagship, the Queen Elizabeth 2 ("QE2"), offers the only remaining
scheduled transatlantic ocean liner service between the U.S. and Britain. Both
ships offer cruises to worldwide destinations, with many of the cruises ranging
between 10 and 21 days in length. Periodically, the Cunard ships offer extended
cruises, such as a 104-day world cruise or Cape Town Line Voyages between
Southampton, England and Cape Town, South Africa.
The six Seabourn Ships offer a choice of three distinct styles of luxury
cruises aboard intimately sized ships. Seabourn is marketed as the "world's
most celebrated cruise line" because of its intense focus on personalized
service and extraordinary cuisine. These ships concentrate their operations in
the Caribbean, Mediterranean, Baltic and Western Europe with cruises in the
seven to 14 day range and also make extended cruises to various other worldwide
destinations, including South America, Australia, the South Pacific and
Southeast Asia.
Summary information concerning the Company's ships is as
follows (primary areas of operation reflect 1999 itineraries and
are subject to change in future years).
APPROXIMATE
GROSS PRIMARY
YEAR PAX REGISTERED AREAS OF
NAME REGISTRY BUILT CAP TONS OPERATION
Carnival:
Carnival Triumph Panama 1999 2,758 102,000 Caribbean,
Eastern Canada
Paradise Panama 1998 2,052 70,000 Caribbean
Elation Panama 1998 2,052 70,000 Mexican Riviera
Carnival Destiny Panama 1996 2,642 101,000 Caribbean
Inspiration Panama 1996 2,052 70,000 Caribbean
Imagination Panama 1995 2,052 70,000 Caribbean
Fascination Panama 1994 2,052 70,000 Caribbean
Sensation Panama 1993 2,052 70,000 Caribbean
Ecstasy Liberia 1991 2,052 70,000 Caribbean
Fantasy Liberia 1990 2,056 70,000 Bahamas
Celebration Liberia 1987 1,486 47,000 Caribbean
Jubilee Panama 1986 1,486 47,000 Alaska, Hawaii,
Mexican Riviera,
Panama Canal
Holiday Panama 1985 1,448 46,000 Mexican Riviera
Tropicale Liberia 1982 1,014 37,000 Caribbean
Total Carnival Ships Capacity..... 27,254
Holland America:
Volendam Netherlands 1999 1,440 63,000 Caribbean (1)
Rotterdam Netherlands 1997 1,316 62,000 Europe,
Worldwide
Veendam Bahamas 1996 1,266 55,000 Alaska,
Caribbean
Ryndam Netherlands 1994 1,266 55,000 Alaska, Caribbean
Maasdam Netherlands 1993 1,266 55,000 Eastern Canada,
Europe,
Panama Canal
Statendam Netherlands 1993 1,266 55,000 Alaska, Hawaii,
Caribbean, Mexico
Westerdam Netherlands 1986 1,494 54,000 Alaska, Caribbean
Noordam Netherlands 1984 1,214 34,000 Alaska, Caribbean,
South America
Nieuw Amsterdam (2) Netherlands 1983 1,214 34,000 Alaska, Caribbean,
Asia/Pacific
Total Holland America
Ships Capacity................... 11,742
Windstar Cruises:
Wind Surf Bahamas 1990 312 14,750 Caribbean, Europe
Wind Spirit Bahamas 1988 148 5,700 Caribbean, Europe
Wind Song Bahamas 1987 148 5,700 Central America,
Europe
Wind Star Bahamas 1986 148 5,700 Caribbean,
Central America
Total Windstar Ships Capacity..... 756
APPROXIMATE
GROSS PRIMARY
YEAR PAX REGISTERED AREAS OF
NAME REGISTRY BUILT CAP TONS OPERATION
Cunard:
Caronia England 1973 666 24,500 Caribbean, Europe,
Pacific
Queen Elizabeth 2 England 1969 1,778 70,000 Transatlantic,
Worldwide
Total Cunard Ships Capacity....... 2,444
Seabourn:
Seabourn Legend Norway 1992 208 10,000 Caribbean, Europe
Seabourn Spirit Norway 1989 208 10,000 Asia, Europe
Seabourn Pride Norway 1988 208 10,000 South America,
Europe, Caribbean
Seabourn Sun Bahamas 1988 758 38,000 Caribbean, Europe,
Pacific
Seabourn Goddess II Bahamas 1985 116 4,250 Asia, Caribbean,
Europe
Seabourn Goddess I Bahamas 1984 116 4,250 Caribbean, Europe
Total Seabourn Ships Capacity..... 1,614
Total Capacity....................... 43,810
(1) The Volendam was in service for only 18 days during fiscal
1999. During fiscal 2000, the primary areas of operations are
expected to be Alaska and the Caribbean.
(2) In late 2000, this ship is contracted to be sold to a third
party.
__________________________
Cruise Ship Construction
The Company has signed agreements with two shipyards providing for the
construction of additional cruise ships. A summary of new ship agreements for
the Company's Wholly Owned Cruise Operations is as follows:
APPROXIMATE
EXPECTED GROSS ESTIMATED
SERVICE PAX REGISTERED TOTAL
VESSEL DATE(1) SHIPYARD CAP TONS COST(2)
(In millions)
Carnival
Carnival Victory 9/00 Fincantieri 2,758 101,000 450
Carnival Spirit 4/01 Masa-Yards 2,120 84,000 375
Carnival Pride 1/02 Masa-Yards (3) 2,120 84,000 375
Carnival Legend 8/02 Masa-Yards (3) 2,120 84,000 375
Carnival Conquest 12/02 Fincantieri 2,758 101,000 450
Carnival Glory 8/03 Fincantieri 2,758 101,000 450
Total Carnival Ships 14,634 2,475
Holland America
Zaandam 5/00 Fincantieri(4) 1,440 63,000 300
Amsterdam 11/00 Fincantieri 1,380 62,000 300
Newbuild 10/02 Fincantieri(4) 1,820 84,000 400
Newbuild 8/03 Fincantieri(4) 1,820 84,000 400
Newbuild 1/04 Fincantieri(4) 1,820 84,000 400
Newbuild 9/04 Fincantieri(4) 1,820 84,000 400
Total Holland America Ships 10,100 2,200
Total (5) 24,734 $4,675
(1) No assurance can be made that the vessels under construction will be
introduced into service by the expected service date.
(2) Estimated total cost of the completed vessel includes the contract price
with the shipyard, design and engineering fees, capitalized interest, various
owner supplied items and construction oversight costs.
(3) These construction contracts are denominated in German Deutsche Marks and
have been fixed into U.S. dollars through the utilization of forward foreign
currency contracts.
(4) These construction contracts are denominated in Italian Lira and have been
fixed into U.S. dollars through the utilization of forward foreign currency
contracts.
(5) The Company has one option for the construction of an additional 84,000
gross registered ton vessel for Holland America, with a passenger capacity of
1,820 to be delivered in 2005. The estimated total vessel cost of approximately
$400 million is denominated in Italian Lira. No assurance can be given that the
option to construct the vessel will be exercised.
Cruise Pricing
Each of the Company's cruise brands publishes brochures with prices for the
upcoming seasons. Brochure prices vary by cruise line, by category of cabin, by
ship and itinerary. Brochure prices are regularly discounted through the
Company's early booking discount program and other promotions. The cruise price
includes all meals and entertainment on board and use of, or admission to, 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.
Onboard and Other Revenues
The Company derives revenues from certain onboard activities and services
including casino gaming, bar sales, gift shop sales, entertainment arcades,
shore tours, art auctions, photography, spa services and promotional advertising
by merchants located in ports of call.
The casinos, which contain slot machines and gaming tables including
blackjack, and in most cases craps, roulette and stud poker, are generally open
only when the ships are at sea in international waters. The Company also earns
revenue from the sale of alcoholic and other beverages. Onboard activities are
either performed directly by the Company or by independent concessionaires, from
which the Company collects a percentage of revenues.
The Company receives additional revenue from the sale to its passengers of
shore excursions at each ship's ports of call. They include bus and taxi
sightseeing excursions, local boat and beach parties, and nightclub and casino
visits. On the Carnival, Windstar, Cunard and Seabourn Ships, such shore
excursions are primarily operated by independent tour operators. On the Holland
America Ships, shore excursions are operated by Holland America Westours and
independent parties.
In conjunction with its cruise vacations on its ships, all of the Company's
cruise brands sell pre-cruise and post-cruise land packages. Carnival packages
generally include one, two or three-night vacations at nearby attractions, such
as Universal Studios and Walt Disney World in Orlando, Florida, or in proximity
to other vacation destinations in Central and South Florida, Los Angeles,
California and San Juan, Puerto Rico. Holland America packages outside of Alaska
generally include one, two or three-night vacations, including stays in unique
European port cities or near attractions in Central and South Florida. Cunard
and Seabourn packages include numerous luxury and/or exotic pre and post-cruise
land programs, such as world class golf programs, wine tastings and tours of the
Galapagos Islands and the Hidden Kingdoms of Nepal.
In conjunction with its Alaskan cruise vacations on its Holland America and
Carnival Ships, the Company sells pre and post-cruise land packages which are
more fully described in Part I, Item 1. Business, C. Tour Segment.
Passengers and Occupancy
The aggregate number of passengers carried and occupancy percentage for the
Company's ships is as follows:
YEARS ENDED NOVEMBER 30,
1999 1998 1997
Passengers carried 2,366,000 2,045,000 1,945,000
Occupancy percentage (1)(2) 104.3% 106.3% 108.3%
(1) In accordance with cruise industry practice, occupancy percentage 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.
(2) The Company acquired a majority interest in Cunard Line Limited on May
28, 1998. Since that date Cunard Line Limited's occupancy percentages have been
included in the Company's total occupancy. Cunard Line Limited's ships
generally sail with lower occupancy percentages than the Company's other brands.
The actual occupancy percentage for all cruises on the Company's ships
during each quarter of fiscal 1998 and 1999 was as follows:
OCCUPANCY
QUARTERS ENDED PERCENTAGE
February 28, 1998 105.9
May 31, 1998 105.4
August 31, 1998 111.5
November 30, 1998 102.1
February 28, 1999 100.9
May 31, 1999 99.9
August 31, 1999 112.3
November 30, 1999 103.6
Sales and Marketing
The Company's brands are positioned to appeal to each of the three major
sectors of the vacation market (contemporary, premium and luxury). The
contemporary sector is served typically by cruises that are seven days or
shorter in length, are priced at per diems of $200 or less, and feature a casual
ambiance. The Company believes that the success and growth of the Carnival brand
is attributable in large part to its early recognition of these sectors of the
vacation market and its efforts to reach and promote the expansion of the
contemporary sector. The premium sector typically is served by cruises that last
for seven to 14 days or more at per diems of $250 or higher, and appeal
principally to more affluent customers. The luxury sector, which is not as large
as the other sectors, is served by cruises with per diems of $300 or higher.
During 1998, the Company created a marketing association called the
"World's Leading Cruise LinesSM" for its family of six cruise brands, including
Costa, in order to both educate the consumer about the overall breadth of the
Company's cruise brands, as well as to increase the effectiveness and efficiency
of marketing the brands. This initiative is meant to supplement the existing
marketing programs of each individual brand.
The Company's various cruise lines employ over 350 personnel, excluding
reservation agents, in the sales and sales support area who, among other things,
focus on motivating, training and supporting the retail travel agent community
which sells substantially all of the Company's cruises. Travel agents generally
receive a standard commission of 10% plus the potential of additional
commissions based on sales volume. Commission rates on cruise vacations are
usually higher than commission rates earned by travel agents on sales of airline
tickets and hotel rooms. Moreover, since cruise vacations are substantially
all-inclusive, sales of the Company's cruise vacations generally yield higher
commissions to travel agents than commissions earned on selling airline tickets
and hotel rooms. During fiscal 1999, no controlled group of travel agencies
accounted for more than 10% of the Company's consolidated revenues.
Historically, the Company's cruise brands have been marketed primarily in
North America. The Company began to globalize its cruise business by expanding
into Europe through the acquisition of its interest in Airtours in April 1996,
Costa in June 1997 and Cunard in May 1998. The cruise sectors in Europe are
much smaller than the North American sectors. Industry wide European cruise
passengers carried in 1999 are estimated to be approximately 1.4 million
compared to approximately 5.9 million from North America. See Note 9, "Segment
Information," to the Company's Consolidated Financial Statements in Exhibit 13
to this Annual Report on Form 10-K for additional information regarding the
Company's foreign revenues.
Carnival
Carnival believes that its success is due in large part to its unique brand
positioning within the vacation industry. Carnival markets the Carnival Ship
cruises not only as alternatives to competitors' cruises, but as vacation
alternatives to land-based resorts and sightseeing 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 Shipsr" experience, which includes a wide variety of
shipboard activities and entertainment, such as full-scale casinos and
nightclubs, an atmosphere of pampered service and high quality food.
As mentioned above, the Company markets the Carnival Ships as the "Fun
Shipsr" and uses, among others, the themes "Carnival's Got the Funr" and "The
Most Popular Cruise Line in the World!r". Carnival advertises nationally
directly to consumers on network and cable television and through extensive
print and radio media. Carnival believes its advertising generates interest in
cruise vacations generally and results in a higher degree of consumer awareness
of the "Fun Shipsr" concept and the "Carnivalr" name in particular.
Substantially all of Carnival's cruise bookings are made through travel agents.
In fiscal 1999, Carnival took reservations from about 29,000 of approximately
49,000 travel agency locations known to the Company in the United States and
Canada. Travel agents generally receive a standard commission of 10% plus the
potential of additional commissions based on sales volume.
Carnival engages in substantial promotional efforts designed to motivate
and educate retail travel agents about its "Fun Shipsr" cruise vacations.
Carnival employs approximately 120 business development managers and 50 in-house
service representatives to motivate independent travel agents and to promote its
cruises as an alternative to land-based vacations or other cruise lines.
Carnival believes it has one of the largest sales forces in the industry.
To facilitate access and to simplify the reservation process, Carnival
employs approximately 750 reservation agents to take bookings from independent
travel agents. Carnival's fully automated reservation system allows its
reservation agents to respond quickly to book staterooms on its ships.
Additionally, through Leisure Shopper, Cruise Director or Carnival's internet
booking engine, travel agents and consumers have the ability to make
reservations through their own computer terminals directly into Carnival's
computerized reservations system.
A significant portion of Carnival's cruises are generally 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 are
designed to encourage potential passengers to book cruise reservations earlier,
which helps the Company to more effectively manage overall net revenue yields
(net revenue per available berth). Carnival's payment terms require that a
passenger pay approximately 20% 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, four and five day cruises and 70 days before the sailing date for
seven-day and longer cruises.
Holland America and Windstar
The Holland America and Windstar Ships cater to the premium and luxury
sectors, respectively. The Company believes that the hallmarks of the Holland
America experience are beautiful ships and gracious, attentive service. Holland
America communicates this difference as "A Tradition of Excellencer", a
reference to its long-standing reputation for "world class" service and cruise
itineraries.
Substantially all of Holland America's bookings are made through travel
agents. In fiscal 1999, Holland America took reservations from about 20,000 of
approximately 49,000 travel agency locations known to the Company in the United
States and Canada. Travel agents generally receive a standard commission of 10%
plus the potential of additional commissions based on sales volume.
Holland America has focused much of its sales effort at creating an
excellent relationship with the travel agency community. This is related to its
marketing philosophy that travel agents have a large impact on the consumer
vacation selection process and will recommend Holland America more often because
of its excellent reputation for service to both consumers and independent travel
agents. Holland America solicits continuous feedback from consumers and the
independent travel agents making bookings with Holland America to ensure they
are receiving excellent service.
Holland America's marketing communication strategy is primarily composed of
newspaper and magazine advertising, large scale brochure distribution, direct
mail solicitations to past passengers (referred to as "alumni"), network and
cable television and radio spots. Holland America engages in substantial
promotional efforts designed to motivate and educate retail travel agents about
its products. Holland America employs approximately 54 field sales
representatives, 23 inside sales representatives and 18 sales and service
representatives to support the field sales force. To facilitate access to
Holland America and to simplify the reservation process for the Holland America
Ships, Holland America employs approximately 260 reservation agents to take
bookings from travel agents. Additionally, through Leisure Shopper and Cruise
Director, travel agents have the ability to make reservations directly into
Holland America's reservations system. Holland America's cruises generally are
booked several months in advance of the sailing date.
Windstar has its own marketing and reservations staff. Field sales
representatives for both Holland America and Carnival also act as field sales
representatives for Windstar. Marketing efforts are devoted primarily to i)
travel agent support and awareness, ii) direct mail solicitation of past
passengers and iii) 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 sector positioning is embodied in the
phrase "180 degrees from ordinaryr".
Cunard and Seabourn
During the period from December 1995 through May 1998, the Company owned a
50% equity interest in Seabourn Cruise Line Limited. Simultaneously with the
Company's acquisition of the assets of Cunard in May 1998, Cunard and Seabourn
were combined to form Cunard Line Limited, in which the Company owned a 68%
equity interest. In November 1999 the Company acquired the remaining 32%
minority interest of Cunard Line Limited. Cunard Line Limited currently
operates eight ships in its Cunard and Seabourn brands.
The Cunard brand currently operates two ships in the luxury cruise sector.
Cunard's most visible asset is the QE2. The QE2 is the only active passenger
ship of its size built specifically for navigating ocean waters and currently
offering transatlantic cruises, and thus enjoys a unique standing among modern
passenger ships. Since being acquired by the Company, Cunard has redefined
itself as the brand that offers classic "Old World" cruising with a British
essence.
The Seabourn brand currently operates six ships, offering ultra-luxury
cruising with an intense focus on service and cuisine. It is the exceptionally
high level of service which management believes enables Seabourn to be marketed
as the "Best of the Best" in luxury worldwide cruising.
Seabourn and Cunard currently market and sell their products through one
combined sales and marketing organization. This combined organization has sales
offices in Miami, England, Germany and Australia. Approximately 40% of Cunard
Line Limited's revenues are generated from outside the U.S. Marketing efforts
are devoted primarily to i) travel agent support and awareness, ii) direct mail
solicitation of past passengers and iii) targeted print media campaigns and
brochure distribution. Cunard Line Limited has consolidated and streamlined its
entire organization, including its sales and marketing activities and
implemented a group sales reservation desk to support its emphasis on developing
its base of group business.
Substantially all of Seabourn's and Cunard's bookings are made through
travel agents. In fiscal 1999, Seabourn and Cunard took reservations from about
7,000 of approximately 49,000 travel agency locations known to the Company in
the United States and Canada. Travel agents generally receive a standard
commission of 10% plus the potential of additional commissions based on sales
volume.
Cunard and Seabourn employ approximately 41 field sales representatives, 18
inside sales representatives and 41 sales and service representatives to support
its field sales force. They also employ approximately 93 Cruise Sales
Consultants to take bookings, substantially all of which come from travel
agents.
During late 1999, Cunard refurbished the Royal Viking Sun and transferred
it along with the Sea Goddess I and II ships to the Seabourn brand. The ships
were renamed the Seabourn Sun, Seabourn Goddess I and Seabourn Goddess II,
respectively. Management believes these ships more appropriately fit within the
Seabourn brand. Additionally, after a major refurbishment in late 1999,
Cunard's Vistafjord was renamed the "Caronia", the name once used by two of
Cunard's former "Old World" ships. The QE2 has also undergone a major
refurbishment in late 1999. Management has revised cruising itineraries and
schedules for the year 2000 in order to more appropriately coordinate individual
ship itineraries with their new branding strategies.
Seasonality
The Company's revenue from the sale of passenger tickets is moderately
seasonal. Historically, demand for cruises has been greatest during the summer
months.
Competition
In addition to competing with each other, cruise lines compete for consumer
disposable leisure time dollars with other vacation alternatives such as
land-based resort hotels and sightseeing destinations, and consumer demand for
such activities is typically influenced by general economic conditions.
As described under Part I, Item 1. Business, B. Cruise Ship Segment, North
American Cruise Industry, the North American cruise industry had an aggregate of
145 ships and 148,000 lower berths at the end of 1999. From the end of 1999
through the end of 2003, CLIA currently estimates that 36 new ships will be
introduced into the North American industry with a capacity of approximately
61,000 lower berths. These estimates of new ship introductions are based on
scheduled ship deliveries and the actual number of ships could change. The lead
time for design, construction and delivery of a typical large cruise ship is
approximately two to three years. Additionally, these estimates of capacity do
not include assumptions related to unannounced ship withdrawals due to age or
changes in itineraries and, accordingly, could indicate a higher percentage
growth in capacity than will actually occur. Nonetheless, management believes
net capacity serving North American cruise passengers will increase over the
next several years, and thus may increase the levels of competition within the
industry.
The Company is the largest cruise company in the world based on passengers
carried, revenues generated and available capacity. The primary methods of
competition among cruise lines and with other land-based vacation alternatives
are in the areas of cruise pricing, cruise product (i.e. the nature of the
overall vacation experience) and cruise itineraries. Each of the Company's
cruise brands and its primary cruise competition is discussed below.
The Carnival Ships compete with cruise ships operated by five different
cruise lines which operate year round from Florida, California or Puerto Rico
with similar itineraries and with nine other cruise lines operating seasonally
from ports in Florida, California, Puerto Rico or New York, including cruise
ships operated by Holland America and Costa. Competition for cruise passengers
is substantial. Ships operated by Royal Caribbean International and Norwegian
Cruise Line sail regularly from Miami and ships operated by Celebrity Cruises,
owned by Royal Caribbean Cruises Ltd., and Princess Cruises sail regularly from
Ft. Lauderdale on itineraries similar to those of the Carnival Ships. Carnival
competes year round with ships operated by Royal Caribbean International
embarking from Los Angeles to the West Coast of Mexico. Cruise lines such as
Norwegian Cruise Line, Royal Caribbean International and Princess Cruises offer
voyages competing with Carnival from San Juan to the Caribbean. The Walt Disney
Co. entered the cruise market with the introduction of a new cruise ship in both
1998 and 1999. The Disney ships compete primarily with Carnival in the Caribbean
and Bahamian marketplaces.
In Alaska, Holland America and Carnival compete directly with cruise ships
operated by six different cruise lines with the largest competitors being
Princess Cruises, Royal Caribbean International and Celebrity Cruises. Over the
past several years, there has been a steady increase in the available capacity
among cruise lines operating in Alaska. In the Caribbean, Holland America
competes with cruise ships operated by 14 different cruise lines, its primary
competitors being Princess Cruises, Royal Caribbean International, Celebrity
Cruises and Norwegian Cruise Line, as well as Carnival and Costa.
In Europe, Holland America competes directly with both large and small
cruise lines with its primary competitors being Celebrity Cruises, Costa,
Norwegian Cruise Line, Orient Lines, Princess Cruises and Royal Caribbean
International.
The Cunard, Seabourn and Windstar ships' primary unaffiliated competitors
within the luxury cruise sector include Crystal Cruises, Radisson Seven Seas and
Silversea Cruises, as well as the higher priced cabins on certain of the cruise
lines which serve the premium sector.
Governmental Regulations
The Company's ships are registered in the Bahamas, England, Liberia,
Netherlands, Norway or Panama, as more fully described under Part I, Item 1.
Business, B. Cruise Ships and Itineraries and, accordingly, are regulated by
these jurisdictions. The Company's ships that call on United States ports 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 ("FMC") which, among other things, certifies the Company on
the basis of its ability to meet obligations to passengers for refunds in case
of nonperformance. The Company believes it is in compliance with all material
regulations applicable to its ships and has all the necessary licenses to
conduct its business. In connection with a significant portion of its Alaska
cruise operations, Holland America relies on concession permits from the
National Park Service, which are periodically renewed, to operate its cruise
ships in Glacier Bay National Park. There can be no assurance that these 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 (the "IMO"), which operates under
the United Nations, has adopted safety standards as part of the "Safety of Life
at Sea" ("SOLAS") Convention, generally applicable to all passenger ships
carrying 36 or more passengers. Generally, SOLAS establishes vessel design,
structural features, materials, construction and life saving equipment
requirements to improve passenger safety. The current SOLAS requirements are
being phased in through 2010.
In 1993, SOLAS was amended to adopt the "International Safety Management
Code" (the "ISM Code"). The ISM Code provides an international standard for the
safe management and operation of ships and for pollution prevention. The ISM
Code became mandatory for passenger vessel operators, such as the Company, on
July 1, 1998. All of the Company's Wholly Owned Cruise Operations and Affiliated
Cruise Operations have obtained the required certificates demonstrating
compliance with the ISM Code.
Public Law 89-777 administered by the 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.
On February 8, 2000, the United States Treasury Department issued proposed
Treasury Regulations to Section 883 of the Internal Revenue Code ("Section 883")
relating to income derived by foreign corporations from the international
operation of ships or aircraft. The proposed regulations provide, in general,
that a foreign corporation organized in a qualified foreign country and engaged
in the international operation of ships or aircraft shall exclude qualified
income from gross income for purposes of federal income taxation provided that
the corporation can satisfy certain ownership requirements, including, among
other things, that its stock is publicly traded. A corporation's stock that is
publicly traded will satisfy this requirement if more than 50% of its stock is
owned by persons who each own less than 5% of the corporation's stock.
To the best of the Company's knowledge it currently qualifies as a publicly
traded corporation under these proposed rules and, if the proposed rules were in
force, substantially all of the Company's income (with the exception of the
United States source income from the transportation, hotel and tour business of
Holland America Westours) would continue to be exempt from United States federal
income taxes.
In order to ensure that the Company continues to be publicly traded under
the proposed Section 883 regulations, the Company will recommend to its
shareholders at its annual meeting that the Company's articles of incorporation
be amended to prohibit any person, other than an existing 5% shareholder, from
acquiring shares that would give such person in the aggregate more than 4.9% of
the value of the shares of the Company.
From time to time, various other regulatory and legislative changes have
been or may be proposed that could have an affect on the cruise industry in
general.
Financial Information
For financial information about the Company's cruise ship segment with
respect to each of the three years in the period ended November 30, 1999, see
Note 9, "Segment Information," to the Company's Consolidated Financial
Statements in Exhibit 13 of this Annual Report on Form 10-K.
C. Tour Segment
In addition to its cruise business, the Company markets sightseeing tours
both separately and as a part of cruise/tour packages under the Holland America
Westours and Gray Line names. 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 an indirect wholly owned subsidiary of HAL, a
wholly owned subsidiary of the Company. The group of companies which together
comprise the tour operations perform three independent yet interrelated
functions. During 1999, as part of an integrated travel program to destinations
in Alaska, the tour service group offered 39 different tour programs varying in
length from 8 to 21 days. The transportation group and hotel group supports 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 of Alaska and the Yukon River. The
Yukon Queen II 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 304 passengers.
A fleet of over 280 motor coaches using the trade name Gray Line operates
in Alaska, Washington and western Canada. These motor coaches are used for
extended trips, city sightseeing tours and charter hire. Holland America
Westours conducts its tours both as part of a cruise/tour package and as
individual sightseeing products sold under the Gray Line name. Additionally,
Holland America Westours 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, Holland America Westours owns or
leases motor coach maintenance shops in Seattle, Washington, and in Juneau,
Fairbanks, Anchorage, Skagway and Ketchikan, Alaska. Holland America Westours
also owns or leases service offices at Anchorage, Denali Park, Fairbanks,
Juneau, Ketchikan and Skagway in Alaska, at Whitehorse in the Yukon Territory,
in Seattle, Washington, Vancouver, British Columbia and Victoria, British
Columbia. Certain real property facilities on federal land are used in Holland
America Westours' tour operations pursuant to permits from the applicable
federal agencies.
Westmark Hotels
Holland America Westours owns and/or operates 14 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
10 hotels, located throughout Alaska, provide a total of 1,455 rooms, bringing
the total number of hotel rooms to 2,040.
The hotels play an important role in Holland America Westours tour programs
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. Most
of the Westmark hotels include dining, lounge and conference or meeting room
facilities. Certain hotels have gift shops and other tourist services on the
premises.
Twelve of the hotels are wholly owned by Holland America Westours
subsidiaries and Westmark operates two under management agreements.
For the seven hotels that operate year-round, the occupancy percentage for
fiscal 1999 was 55.4% (57.4% for fiscal 1998), and for the seven hotels that
operate only during the summer months, the occupancy percentage for fiscal 1999
was 71.4% (71.6% for fiscal 1998).
Sales and Marketing
Holland America Westours has its own marketing staff devoted to i) travel
agent support and awareness, ii) direct mail solicitation of past customers,
iii) use of consumer magazine and newspaper advertising to develop prospects and
enhance awareness and iv) distribution of brochures. Additionally, television
and radio spots are used to market its tour and cruise packages. The Westours
marketing message leverages the company's 53 years of Alaska tourism leadership
and its extensive array of hotel and transportation assets to create a brand
preference for Holland America Westours. To the prospective vacationer the
company endeavors to convince them that "Westours is Alaska".
Holland America Westours tours are marketed both separately and as part of
cruise/tour packages. Although most Holland America Westours cruise/tours
include a Holland America cruise as the cruise segment, other cruise lines also
market Holland America Westours tours as a part of their cruise/tour packages
and sightseeing excursions. Tours sold separately are marketed through
independent travel agents and also directly by Holland America Westours,
utilizing sales desks in major hotels. General marketing for the hotels is done
through various media in Alaska, Canada and the contiguous United States. Travel
agents, particularly in Alaska, are solicited, and displays are used in airports
in Seattle, Washington, Portland, Oregon and various Alaskan cities. Room 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 and the United States Forest Service.
Seasonality
Holland America Westours tour revenues are highly 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 State, western Canada 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 Holland America Westours
seeks to maximize its motor coach charter activity, such as operating charter
tours to ski resorts in Washington and western Canada.
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 and the Canadian Rockies are Princess Tours (with
approximately 160 motor coaches and three hotels) and Alaska
Sightseeing/Trav-Alaska (with approximately 13 motor coaches). The primary
competitor in Washington is Gazelle (with approximately 15 motor coaches).
Westmark Hotels compete with various hotels throughout Alaska, many of
which charge prices below those charged by Westmark Hotels. Dining facilities in
the hotels also compete with the many restaurants in the same geographic areas.
Government Regulations
Holland America Westours 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 and Transportation Commission, the
British Columbia Motor Carrier Commission and the Alaska Department of
Transportation. Certain of Holland America Westours tours involve federal
properties and are subject to regulation by various federal agencies, such as
the National Park Service and the U.S. Forest Service.
In connection with the operation of its beverage facilities in the Westmark
Hotels, Holland America Westours 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, Holland America Westours is required to
comply with applicable building and fire codes. Changes in these codes have in
the past and may in the future require expenditures to ensure continuing
compliance, such as the installation of sprinkler systems.
From time to time, various other regulatory and legislative changes have
been or may be proposed that could have an effect on the tour industry in
general.
Financial Information
For financial information about the Company's tour segment with respect to
each of the three years in the period ended November 30, 1999, see Note 9,
"Segment Information," to the Company's Consolidated Financial Statements in
Exhibit 13 of this Annual Report on Form 10-K.
D. Employees
The Company's operations have approximately 4,300 full-time and 2,100 part-
time/seasonal employees engaged in shoreside operations. The Company also
employs approximately 1,200 officers and 18,000 crew and staff on its ships. Due
to the seasonality of its Alaska and Canadian operations, HAL and its
subsidiaries increase their work force during the summer months, employing
additional full-time and part-time personnel which have been included above. The
Company has entered into agreements with unions covering certain employees in
its hotel, motorcoach and ship operations. The Company considers its employee
and union relations generally to be good.
E. Suppliers
The Company's largest purchases are for airfare, advertising, fuel, food
and beverages and hotel and restaurant supplies and products. Although the
Company chooses to use a limited number of suppliers for most of its food,
beverages and hotel and restaurant supplies, most of these purchases are
available from numerous sources at competitive prices. The use of a limited
number of suppliers enables the Company to, among other things, obtain volume
discounts.
Management believes that there are currently eight shipyards in the world
capable of the quality construction of large passenger cruise ships. The Company
currently has contracts, with two of these shipyards for the construction of
twelve ships to enter service over the next five years (see Part I, Item 1.
Business, B. Cruise Ship Segment - Wholly Owned Cruise Operations - Cruise Ship
Construction). The Company's primary competitors also have contracts to
construct new cruise ships (see Part I, Item 1. Business, B. Cruise Ship Segment
- - Wholly Owned Cruise Operations - Competition). If the Company elects to build
additional ships in the future, which it expects to do, there is no assurance
that any of these shipyards will have the available capacity to build additional
new ships for the Company at the times desired by the Company or that the
shipyards will agree to build additional ships at a cost acceptable to the
Company. Additionally, there is no assurance that ships under contract for
construction will be delivered.
F. Insurance
The Company maintains insurance covering legal liabilities related to crew,
passengers and other third parties on its ships in operation through The
Standard Steamship Owners Protection & Indemnity Association Limited (the
"SSOPIA") and Steamship Mutual Underwriting Association Ltd. (the "SMUAL"). The
amount and terms of this insurance is governed by the rules of the foregoing
protection and indemnity associations.
The Company maintains insurance on the hull and machinery of each vessel in
amounts equal to the approximate market value of each vessel. The Company
maintains war risk insurance on each vessel which includes legal liability to
crew and passengers, including terrorist risks for which coverage would be
excluded under SSOPIA and SMUAL. The coverage for hull and machinery and war
risks is provided by international markets, including underwriters at Lloyds.
The Company, as currently required by the FMC, maintains at all times three $15
million performance bonds for all of the Company's ships, to cover passenger
ticket liabilities in the event of a canceled or interrupted cruise. The
Company also maintains other performance bonds as required by various foreign
authorities who regulate certain of the Company's operations in their
jurisdictions.
The Company maintains certain levels of self-insurance for the above
mentioned risks through the use of substantial deductibles. The Company does not
typically carry coverage related to loss of earnings or revenues for its cruise
or tour operations.
The Company also maintains various other insurance policies to protect the
assets and earnings arising from the operations of Holland America Westours and
other activities.
G. Investments in Affiliates
Airtours plc
In April 1996, the Company acquired a 28% interest in Airtours for
approximately $307 million. In 1998, the Company's interest in Airtours was
reduced to approximately 26% as a result of the conversion of Airtours
preference shares into Airtours common stock and the issuance of Airtours common
stock in conjunction with two of its acquisitions. Airtours is one of the
largest air inclusive tour operator in the world and is publicly traded on the
London Stock Exchange. Airtours provides air inclusive packaged holidays to the
United Kingdom, Austrian, Belgian, Holland, French, German, Polish,
Scandinavian, Swiss and North American markets. Airtours provided holidays to
approximately ten million people in fiscal 1999 and owns or operates over 1,000
retail travel shops, 46 resort properties, four cruise ships, 42 aircraft and
develops and markets vacation ownership resorts in the Canary Islands and
Orlando, Florida. The four cruise ships are operated under the Sun Cruises brand
and an additional 962 passenger capacity ship is chartered, for summer cruises
only, under the Direct Cruises brand. In 1997, Airtours acquired a 50% interest
in Costa, as discussed below. During 1999, Airtours or its 36% owned German tour
operator, FTi, made several acquisitions, including a 40% interest in Berge &
Meer, a German tour operator which packages and distributes air-inclusive tours
directly to the public through call centers, the internet and the mail, and a
100% interest in the Travel World Group of United Kingdom retail outlets.
Airtours also acquired additional tour operations based in Holland and
Scandinavia. In December 1998 and November 1999, Airtours successfully completed
an approximate $500 million convertible debenture offering and a $335 million
non-equity preference share offering, respectively, which are providing Airtours
with additional capital to fund its operations and/or future acquisitions, as
required. If this convertible debt is converted into Airtours common stock, the
Company's interest in Airtours would be reduced to approximately 23%.
On February 21, 2000, Airtours and Travel Services International ("TSI")
entered into an agreement whereby Airtours would commence a $26 per share
recommended cash tender offer for all of TSI's outstanding common stock. Such
offer would value TSI at approximately $385 million. TSI is a major distributor
of leisure travel products in the U.S. market with leading positions in the
distribution of cruise, auto rental, alumni holidays and hotel bookings.
Costa Crociere S.p.A.
In June 1997, the Company and Airtours completed a joint offer to acquire
the equity securities of Costa, an Italian cruise company. The Company and
Airtours each own 50% of Il Ponte, S.p.A. ("Il Ponte"), a holding company, which
was purchased from the Costa family. As a result of the acquisition, Il Ponte
owns approximately 100% of Costa. The cost of the Company's acquisition of its
50% direct interest was approximately $141 million, of which approximately $103
million was paid by Il Ponte and the balance was paid by the Company. The $103
million paid by Il Ponte was funded through Il Ponte debt, which was guaranteed
by the Company.
Costa is headquartered in Genoa, Italy and is Europe's largest cruise line
based on number of passengers carried and available capacity. Costa is primarily
targeted to the contemporary sector and has sales offices in Argentina, Brazil,
England, Florida, France, Germany, Italy, Spain and Switzerland, and employs
over 200 personnel in the sales and sales support area, excluding reservation
agents. Costa's ships' primary itineraries include Europe, the Caribbean and
South America. The major market for Costa cruises is Southern Europe with the
majority of Costa's cruises being sold in Italy, Spain and France.
The itineraries of Costa's ships during the summer months consist primarily
of various locations in Europe. During the winter months, the vessels operate
primarily in the Caribbean and South America. See Part I, Item 1. Business, B.
Cruise Ship Segment for a discussion of competition and certain government
regulations, which affect Costa.
Costa operates six ships, which are currently registered in Liberia, which
have an aggregate passenger capacity of 7,103 passengers. In January 1998, Costa
signed an agreement to construct a seventh ship, the Costa Atlantica, which is
expected to enter service in July 2000, with a passenger capacity of 2,112 at a
cost of approximately 700 billion Lira. In 2001, the Costa Classica will be
lengthened to increase its passenger capacity to 2000 from 1,302, and it is
expected that the Costa Romantica will be lengthened in 2002 to increase its
passenger capacity to 2000 from 1,350. No assurance can be given that a contract
will be entered into to lengthen the Costa Romantica.
Seasonality
The Company's equity in the earnings of Airtours and Il Ponte are recorded
on a two-month lag basis using the equity method of accounting. Airtours'
revenues are very seasonal due to the nature of the European leisure travel
industry. Costa's revenues are moderately seasonal. Typically, Airtours' and
Costa's quarters ending June 30 and September 30 experience higher revenues,
with revenues in the quarter ending September 30 being their highest.
H. Trademarks
The Company owns numerous trademarks, which it believes are widely
recognized throughout the world and have considerable value.
I. Recent Development
In late February 2000, the Company and Fairfield Communities, Inc.
announced their decision to end a previously announced strategic merger of the
two companies. See Note 14 to the Company's Consolidated Financial Statements
in Exhibit 13 to this Annual Report on Form 10-K.
Item 2. Properties
The Company's cruise ships and private island, Half Moon Cay, are described
in Section B of Item 1 under the heading Cruise Ship Segment - Cruise Ships and
Itineraries. The properties associated with Holland America Westours tour
operations are described in Section C of Item 1 under the heading Tour Segment.
Carnival's principal shoreside operations and the Company's corporate
headquarters are located at 3655 N.W. 87th Avenue, Miami, Florida. These
Company-owned facilities include approximately 456,000 square feet of office
space. HAL headquarters are at 300 Elliott Avenue West in Seattle, Washington in
approximately 128,000 square feet of leased office space. Cunard Line Limited
headquarters are at 6100 Blue Lagoon Drive in Miami, Florida in approximately
51,000 square feet of leased office space.
The Company's cruise ships, tour properties and shoreside operations
facilities are well maintained and in good condition.
Item 3. Legal Proceedings
Several actions (collectively, the "Passenger Complaints"), as previously
reported, have been filed against Carnival and one action has been filed against
Holland America Westours on behalf of purported classes of persons who paid port
charges to Carnival or Holland America, alleging that statements made in
advertising and promotional materials concerning port charges were false and
misleading. The Passenger Complaints allege violations of the various state
consumer protection acts and claims of fraud, conversion, breach of fiduciary
duties and unjust enrichment. Plaintiffs seek compensatory damages or,
alternatively, refunds of portions of port charges paid, attorneys' fees, costs,
prejudgment interest, punitive damages and injunctive and declaratory relief.
The status of each pending Passenger Complaint is as follows:
In 1996, four Passenger Complaints were filed against Carnival in the
Circuit Court for the Eleventh Judicial Circuit in Dade County, Florida, by
Michelle Hackbarth, Larry Katz, Michelle A. Sutton, Pedro Rene Mier, and others,
respectively, on behalf of purported nationwide classes. In May 1998, the court
consolidated all four actions. On March 8, 1999, the trial court denied
plaintiff's motion for class certification, and plaintiffs have appealed the
trial court's decision. On February 2, 2000, the Third District Court of Appeal
of Florida reversed the trial court's denial of class certification and remanded
the case for further proceedings. The Company has filed a motion for rehearing
and for clarification of the Third District Court of Appeal's decision. In
addition, plaintiff's filed a motion to enforce a purported oral settlement
agreement they alleged was reached with Carnival. In January 2000, the trial
court denied the plaintiffs' motion to enforce the purported oral settlement
agreement. The plaintiff's have appealed the trial court's decision.
In April 1997, a Passenger Complaint was filed against Carnival in the
Court of Common Pleas, Montgomery County, Ohio, by Cathy J. Miller and others,
on behalf of a purported statewide class. Carnival's motion to dismiss on
inconvenient forum grounds is under consideration.
In March 1998, a Passenger Complaint was filed against Carnival in the
Circuit Court for the 20th Judicial Circuit in St. Clair County, Illinois, by
John R. Birdsell and others on behalf of a purported nationwide class. The
complaint also names, as co-defendants, Norwegian Cruise Line, Royal Caribbean
Cruise Lines and Princess Cruise Lines. The court overruled Carnival's objection
to the court's exercise of personal jurisdiction and denied its motion to
dismiss on grounds of improper forum. Carnival has appealed the decision denying
its motion to dismiss on grounds of improper forum, and its appeal has been
fully briefed and argued and is now pending with the state appellate court.
Proceedings in the trial court, including plaintiffs' motion to certify a class,
have been stayed pending the resolution of Carnival's appeal.
In April 1996, a Passenger Complaint was filed against Holland America
Westours in the Superior Court in King County, Washington, by Francine Pickett
and others on behalf of a purported nationwide class. The court denied both
Holland America Westours' motion to dismiss and the plaintiffs' motion for class
certification. Thereafter Holland America Westours entered into a settlement
agreement for this action, the only Passenger Complaint filed against it. The
settlement agreement was approved by the court on September 28, 1998, however
one member of the settlement class has appealed the agreement. The appeal has
been briefed and argued before the Washington Court of Appeals. The decision is
expected shortly. A further appeal could be taken by either party to the
Washington Supreme Court which could result in the settlement being delayed for
an additional year. Unless the appeal is successful, Holland America will issue
travel vouchers with a face value of $10-$50 depending on specified criteria, to
certain of its passengers who are U.S. residents and who sailed between April
1992 and April 1996, and will pay a portion of the plaintiffs' legal fees. The
amount and timing of the travel vouchers to be redeemed and the effects of the
travel voucher redemption on revenues is not reasonably determinable. In 1998,
the Company established a liability for the estimated distribution costs of the
settlement notices and plaintiffs' legal costs.
Several complaints have been filed against Carnival and/or Holland America
Westours (collectively the "Travel Agent Complaints") on behalf of purported
classes of travel agencies who had booked a cruise with Carnival or Holland
America, claiming that advertising practices regarding port charges resulted in
an improper commission bypass. These actions allege violations of state consumer
protection laws, claims of breach of contract, negligent misrepresentation,
unjust enrichment, unlawful business practices and common law fraud, and they
seek unspecified compensatory damages (or alternatively, the payment of usual
and customary commissions on port charges paid by passengers in excess of
certain charges levied by government authorities), an accounting, attorneys'
fees and costs, punitive damages and injunctive relief. The status of each
pending Travel Agent Complaint is as follows:
In August 1997, a Travel Agent Complaint was filed against Carnival in the
Circuit Court for the Eleventh Judicial Circuit in Dade County, Florida, by
N.G.L. Travel Associates, on behalf of a purported nationwide class of travel
agencies who booked cruises with Carnival. The court dismissed the action with
prejudice in January 1999, and plaintiff has appealed. The appeal has been
fully briefed and argued, and is now pending with the state appellate court.
In September 1997, a Travel Agent Complaint was filed against Holland
America Westours in the Superior Court of the State of Washington for King
County by N.G.L. Travel Associates on behalf of a purported nationwide class of
travel agencies who booked cruises with Holland America. Holland America
Westours filed summary judgment motions as to all of the claims. The motions
were granted as to every claim except for one alleging a breach of contract
under the Sales Agreement between Holland America Westours and GEM, the travel
agent consortium of which N.G.L. Travel Associates was a member. The court has
also certified a class of travel agents that includes all agencies that were
members in 1996 of the GEM group. Consequently, if this matter proceeds to
trial, it will be limited to the issue of whether Holland America Westours is
obligated to pay commissions as to 1996 bookings by these GEM agencies. The
trial is presently scheduled for March 2000.
In August 1996, a Travel Agent Complaint was filed against Carnival and
Holland America Westours in the Superior Court in Los Angeles, County,
California, by Nelsons Travel Associates, on behalf of purported nationwide
classes of travel agencies who booked cruises with Carnival and Holland America.
Upon Carnival's and Holland America Westours' motions to dismiss or stay the
action on the grounds of inconvenient forum, the court stayed the action,
pending resolution of the Florida and Washington actions.
It is not now possible to determine the ultimate outcome of the pending
Passenger and Travel Agent Complaints if such claims should proceed to trial.
Management believes it has meritorious defenses to the claims. Management
understands that purported class actions similar to the Passenger and Travel
Agent Complaints have been filed against several other cruise lines.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Executive Officers of the Registrant
Pursuant to General Instruction G(3), the information regarding executive
officers of the Company called for by Item 401(b) of Regulation S-K is hereby
included in Part I of this Annual Report on Form 10-K.
The following table sets forth the name, age and title of each executive
officer. Titles listed relate to positions within the Company unless otherwise
noted.
NAME AGE POSITION
Micky Arison 50 Chairman of the Board of Directors
and Chief Executive Officer
Gerald R. Cahill 48 Senior Vice President-Finance and Chief
Financial Officer
Robert H. Dickinson 57 President and Chief Operating Officer
of Carnival and Director
Kenneth D. Dubbin 46 Vice President-Corporate Development
Howard S. Frank 58 Vice Chairman of the Board of Directors
and Chief Operating Officer
Ian J. Gaunt 48 Senior Vice President - International
A. Kirk Lanterman 68 Chairman of the Board of Directors, President,
and Chief Executive Officer of
Holland America Line-Westours Inc.
and Director
Lowell Zemnick 56 Vice President and Treasurer
Meshulam Zonis 66 Senior Vice President-Operations of
Carnival and Director
Business Experience of Officers
Micky Arison has been Chief Executive Officer since 1979 and Chairman of
the Board of Directors since 1990. He was President from 1979 to May 1993 and
has also been a director since June 1987. Prior to 1979, he served Carnival for
successive two-year periods as sales agent, reservations manager and as Vice
President in charge of passenger traffic. He is the son of Ted Arison, Carnival
Corporation's founder.
Gerald R. Cahill is a Certified Public Accountant and has been Senior Vice
President-Finance, Chief Financial Officer and Chief Accounting Officer since
January 1998. From September 1994 to January 1998 he was Vice President-Finance.
He was the Chief Financial Officer from 1988 to 1992 and the Chief Operating
Officer from 1992 to 1994 of Safecard Services, Inc. From 1979 to 1988 he held
financial positions at Resorts International Inc. and, prior to that, spent six
years with PricewaterhouseCoopers LLP.
Robert H. Dickinson has been President and Chief Operating Officer of
Carnival since May 1993. From 1979 to May 1993, he was Senior Vice President-
Sales and Marketing of Carnival. He has also been a director since June 1987.
Kenneth D. Dubbin has been Vice President-Corporate Development since May
1999. From 1988 to April 1999 he was Vice President and Treasurer of Royal
Caribbean Cruises Ltd.
Howard S. Frank has been Vice Chairman of the Board of Directors since
October 1993, Chief Operating Officer since January 1998 and a director since
1992. From July 1989 to January 1998 he was Chief Financial Officer and Chief
Accounting Officer and from July 1989 to October 1993 he was Senior Vice
President-Finance. From July 1975 through June 1989 he was a partner with
PricewaterhouseCoopers LLP.
Ian J. Gaunt is an English Solicitor and has been Senior Vice President-
International since May 1999. He was a partner of the London based international
law firm of Sinclair, Roche and Temperley from 1982 through April 1999 where he
represented the Company as special external legal counsel since 1981.
A. Kirk Lanterman is a Certified Public Accountant and has been a director
since April 1992. He has been Chairman of the Board of Directors, President and
Chief Executive Officer of Holland America Line-Westours Inc. ("HALW") since
August 1999. From March 1997 to August 1999, he was Chairman of the Board of
Directors and Chief Executive Officer of HALW. From December 1989 to March
1997, he was President and Chief Executive Officer of HALW. From 1983 to 1989
he was President and Chief Operating Officer of HALW. From 1979 to 1983, he was
President of Westours, Inc. which merged with Holland America Line in 1983.
Lowell Zemnick is a Certified Public Accountant and has been a Vice
President since 1980 and Treasurer since September 1990. He was the Chief
Financial Officer of Carnival from 1980 to September 1990 and was the Chief
Financial Officer of Carnival Corporation from May 1987 through June 1989.
Meshulam Zonis has been Senior Vice President-Operations of Carnival since
1979. He has also been a director since June 1987. From 1974 through 1979 he was
Vice President-Operations of Carnival.
Special Note Regarding Forward-Looking Statements
Certain statements under the headings "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and "Business" and elsewhere
in this Annual Report on Form 10-K, in the Company's press releases, and in oral
statements and presentations made by or with the approval of an authorized
executive officer of the Company constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors, which may cause the actual results, performances or achievements
of the Company to be materially different from any future results, performances
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; consumer demand for
cruises, including the effects on consumer demand of armed conflicts, political
instability or adverse media publicity; increases in cruise industry capacity;
changes in tax laws and regulations; 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; changes in food and fuel commodity prices;
delivery of new vessels on schedule and at the contracted price; weather
patterns; unscheduled ship repairs and drydocking; incidents involving cruise
vessels at sea; changes in foreign currency prices which may impact the income
or loss from certain affiliated operations and certain cruise related revenues
and expenses; and changes in laws and regulations applicable to the Company.
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
A. Market Information
The information required by Item 201(a) of Regulation S-K, Market
Information, is shown in Exhibit 13 and is incorporated by reference into this
Annual Report on Form 10-K.
B. Holders
The information required by Item 201(b) of Regulation S-K, Holders of
Common Stock, is shown in Exhibit 13 and is incorporated by reference into this
Annual Report on Form 10-K.
C. Dividends
The Company declared cash dividends on all of its Common Stock in the
amount of $.075 per share in each of the first three quarters of fiscal 1998,
$.09 in the fourth quarter of fiscal 1998, $.09 in each of the first three
quarters of fiscal 1999, and $.105 in the fourth quarter of fiscal 1999 and
first quarter of fiscal 2000. Payment of future dividends on the Common Stock
will depend upon, among other factors, the Company's earnings, financial
condition and capital requirements. The Company may also declare special
dividends to all stockholders in the event that members of the Arison family and
certain related entities are required to pay additional income taxes by reason
of their ownership of the Common Stock because of an income tax audit of the
Company.
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.
Item 6. Selected Financial Data
The information required by Item 6, Selected Financial Data, is shown in
Exhibit 13 and is incorporated by reference into this Annual Report on Form 10-
K.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The information required by Item 7, Management's Discussion and Analysis of
Financial Condition and Results of Operations, is shown in Exhibit 13 and is
incorporated by reference into this Annual Report on Form 10-K.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The information required by Item 7A, Quantitative and Qualitative
Disclosures About Market Risk, is shown in Exhibit 13 and is incorporated by
reference into this Annual Report on Form 10-K.
Item 8. Financial Statements and Supplementary Data
The financial statements, together with the report thereon of
PricewaterhouseCoopers LLP dated January 24, 2000, is shown in Exhibit 13 and is
incorporated by reference into this Annual Report on Form 10-K.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None.
PART III
Items 10, 11, 12 and 13. Directors and Executive Officers of the
Registrant, Executive Compensation, Security Ownership of Certain
Beneficial Owners and Management, and Certain Relationships and
Related Transactions
The information required by Items 10, 11, 12 and 13 is incorporated herein
by reference to the Registrant's definitive Proxy Statement to be filed with the
Commission not later than 120 days after the close of the fiscal year except
that the information concerning the Registrant's executive officers called for
by Item 401(b) of Regulation S-K has been included in Part I of this Annual
Report on Form 10-K.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) (1)(2) Financial Statements and Schedules:
The financial statements shown in Exhibit 13 are hereby incorporated herein
by reference.
(3) Exhibits:
The exhibits listed on the accompanying Exhibit Index are filed or
incorporated by reference as part of this Annual Report on Form 10-K and such
Exhibit Index is hereby incorporated herein by reference.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the three months ended November
30, 1999.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Miami,
and the State of Florida on this 23 day of February, 2000.
CARNIVAL CORPORATION
By /s/ Micky Arison
Micky Arison
Chairman of the Board of
Directors and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ Micky Arison Chairman of the Board of February 23, 2000
Micky Arison Directors and Chief Executive
Officer
/s/ Howard S. Frank Vice Chairman of the Board of February 23, 2000
Howard S. Frank Directors and Chief Operating
Officer
/s/ Gerald R. Cahill Senior Vice President-Finance February 23, 2000
Gerald R. Cahill and Chief Financial and
Accounting Officer
/s/ Shari Arison Director February 23, 2000
Shari Arison
/s/ Maks L. Birnbach Director February 23, 2000
Maks L. Birnbach
/s/ Atle Brynestad Director February 23, 2000
Atle Brynestad
/s/ Richard G. Capen, Jr.Director February 23, 2000
Richard G. Capen, Jr.
/s/ David Crossland Director February 23, 2000
David Crossland
/s/ Robert H. Dickinson Director February 23, 2000
Robert H. Dickinson
/s/ James M. Dubin Director February 23, 2000
James M. Dubin
/s/ A. Kirk Lanterman Director February 23, 2000
A. Kirk Lanterman
/s/ Modesto A. Maidique Director February 23, 2000
Modesto A. Maidique
/s/ William S. Ruben Director February 23, 2000
William S. Ruben
/s/ Stuart Subotnick Director February 23, 2000
Stuart Subotnick
/s/ Sherwood M. Weiser Director February 23, 2000
Sherwood M. Weiser
/s/ Meshulam Zonis Director February 23, 2000
Meshulam Zonis
/s/ Uzi Zucker Director February 23, 2000
Uzi Zucker
INDEX TO EXHIBITS
Page No. in
Sequential
Numbering
System
Exhibits
3.1-Second Amended and Restated Articles of Incorporation of the Company. (1)
3.2-Amendment to Second Amended and Restated Articles of Incorporation of the
Company. (2)
3.2-Form of By-laws of the Company.(3)
4.1-Agreement of the Company dated February 23, 2000 to furnish certain debt
instruments to the Securities and Exchange Commission.
4.2-Revolving Credit Agreement dated as of July 1, 1993, Amended and Restated
as of December 17, 1996, by and among Carnival Corporation, Citibank, N.A. and
various other lenders.(4)
4.3-Form of Indenture, dated March 1, 1993, between Carnival Cruise Lines, Inc.
and First Trust National Association, as Trustee, relating to the Debt
Securities, including form of Debt Security.(5)
10.1-Retirement and Consulting Agreement dated November 26, 1999 between Alton
Kirk Lanterman, Carnival Corporation and Holland America Line-Westours Inc.
10.2-Executive Long-term Compensation Agreement dated January 16, 1998 between
Robert H. Dickinson and Carnival Corporation. (6)
10.3-1994 Carnival Cruise Lines Key Management Incentive Plan as amended on
April 12, 1999. (7)
10.4-Amended and Restated Carnival Corporation 1992 Stock Option Plan. (8)
10.5-Carnival Cruise Lines, Inc. 1993 Restricted Stock Plan adopted on January
15, 1993 and as amended January 5, 1998 and December 21, 1998. (9)
10.6-Carnival Corporation "Fun Ship" Nonqualified Savings Plan. (10)
10.7 -Amendments to The Carnival Corporation Nonqualified Retirement Plan for
Highly Compensated. (11)
10.8-Carnival Cruise Lines, Inc. Non-Qualified Retirement Plan.(12)
10.9-1993 Outside Directors' Stock Option Plan as amended on April 6, 1998. (13)
10.10-Form of Deferred Compensation Agreement between the Company and Meshulam
Zonis.(14)
10.11-Consulting Agreement/Registration Rights Agreement dated June 14, 1991,
between the Company and Ted Arison.(15)
10.12-First Amendment to Consulting Agreement/Registration Rights Agreement.(16)
10.13-Atle Brynestad Indemnification Agreement. (17)
10.14-Shareholders' Agreement dated February 21, 1996 between Carnival
Corporation and David Crossland.(18)
10.15-Maks L. Birnbach Director's Agreement.(19)
10.16-William S. Ruben Director's Agreement.(20)
10.17-Stuart Subotnick Director's Agreement.(21)
10.18-Sherwood M. Weiser Director's Agreement.(22)
10.19-Uzi Zucker Director's Agreement. (23)
10.20-David Crossland Director's Agreement.(24)
10.21-James M. Dubin Director's Agreement.(25)
10.22-Modesto M. Maidique Director's Agreement.(26)
10.23-Richard G. Capen Director's Agreement.(27)
10.24-Shari Arison Dorsman Director's Agreement.(28)
10.25-Executive Long-term Compensation Agreement dated January 11, 1999, between
the Company and Micky Arison. (29)
10.26-Executive Long-term Compensation Agreement dated January 11, 1999, between
the Company and Howard S. Frank. (30)
10.27-HAL Antillen N.V. and subsidiaries Key Management Incentive Plan. (31)
10.28-1994 Transaction-Extension Agreement, dated January 18, 2000, between
Carnival Corporation, Sherwood Weiser and others.
10.29-Amended and Restated 1994 Security and Pledge Agreement, dated January 18,
2000, between Carnival Corporation and Sherwood Weiser.
10.30-Security and Pledge Agreement, dated January 18, 2000, between Carnival
Corporation and Sherwood Weiser.
10.31-Stock Purchase Agreement, dated January 18, 2000, between Carnival
Corporation, Sherwood Weiser and others.
10.32-Carnival Corporation Supplemental Executive Retirement Plan.
10.33- Amendment to the Carnival Corporation "Fun Ship" Nonqualified Savings
Plan.
12.0-Ratio of Earnings to Fixed Charges.
13.0-Portions of 1999 Annual Report incorporated by reference into 1999 Annual
Report on Form 10-K.
21-Subsidiaries of the Company.
23.0-Consent of PricewaterhouseCoopers LLP.
27.0-Financial Data Schedule (for SEC use only).
Sequential
Numbering
System
Exhibits
(1)Incorporated by reference to Exhibit No. 3 to the registrant's registration
statement on Form S-3 (File No. 333-68999), filed with the Securities and
Exchange Commission.
(2) Incorporated by reference to Exhibit 3.1 to the registrant's Quarterly
Report on Form 10-Q for the quarter ended May 31, 1999 (Commission File No.
1-9610), filed with the Securities and Exchange Commission.
(3)Incorporated by reference to Exhibit No. 3.2 to the registrant's registration
statement on Form S-1 (File No. 33-14844), filed with the Securities and
Exchange Commission.
(4)Incorporated by reference to Exhibit No. 4.1 to the registrant's Annual
Report on Form 10-K for the fiscal year ended November 30, 1996 (Commission File
No. 1-9610), filed with the Securities and Exchange Commission.
(5)Incorporated by reference to Exhibit No. 4 to the registrant's registration
statement on Form S-3 (File No. 33-53136), filed with the Securities and
Exchange Commission.
(6)Incorporated by reference to Exhibit No. 10.2 to the registrant's Annual
Report on Form 10-K for the fiscal year ended November 30, 1997 (Commission File
No. 1-9610), filed with the Securities and Exchange Commission.
(7) Incorporated by reference to Exhibit 10.2 to the registrant's Quarterly
Report on Form 10-Q for the quarter ended May 31, 1999 (Commission File No.
1-9610), filed with the Securities and Exchange Commission.
(8)Incorporated by reference to Exhibit No. 10.4 to the registrant's Annual
Report on Form 10-K for the fiscal year ended November 30, 1997 (Commission File
No. 1-9610), filed with the Securities and Exchange Commission.
(9)Incorporated by reference to Exhibit No. 10.5 to the registrant's Annual
Report on Form 10-K for the fiscal year ended November 30, 1998 (Commission File
No. 1-9610), filed with the Securities and Exchange Commission.
(10)Incorporated by reference to Exhibit No. 10.6 to the registrant's Annual
Report on Form 10-K for the fiscal year ended November 30, 1997 (Commission File
No. 1-9610), filed with the Securities and Exchange Commission.
(11)Incorporated by reference to Exhibit No. 10.7 to the registrant's Annual
Report on Form 10-K for the fiscal year ended November 30, 1997 (Commission File
No. 1-9610), filed with the Securities and Exchange Commission.
(12)Incorporated by reference to Exhibit No. 10.4 to the registrant's Annual
Report on Form 10-K for the fiscal year ended November 30, 1990 (Commission File
No. 1-9610), filed with the Securities and Exchange Commission.
(13)Incorporated by reference to Exhibit 10.5 to the registrant's Quarterly
Report on Form 10-Q for the quarter ended May 31, 1999 (Commission File No.
1-9610), filed with the Securities and Exchange Commission.
(14)Incorporated by reference to Exhibit No. 10.17 to the registrant's
registration statement on Form S-1 (File No. 33-14844), filed with the
Securities and Exchange Commission.
(15)Incorporated by reference to Exhibit No. 4.3 to post-effective amendment no.
1 on Form S-3 to the registrant's registration statement on Form S-1 (File No.
33-24747), filed with the Securities and Exchange Commission.
(16)Incorporated by reference to Exhibit No. 10.40 to the registrant's Annual
Report on Form 10-K for the fiscal year ended November 30, 1992 (Commission File
No. 1-9610), filed with the Securities and Exchange Commission.
(17)Incorporated by reference to Exhibit 10.1 to the registrant's Quarterly
Report on Form 10-Q for the quarter ended May 31, 1999 (Commission File No.
1-9610), filed with the Securities and Exchange Commission.
(18)Incorporated by reference to Exhibit 10.4 to the registrant's Quarterly
Report on Form 10-Q for the quarter ended February 28, 1996 (Commission File No.
1-9610), filed with the Securities and Exchange Commission.
(19)Incorporated by reference to Exhibit No. 28.1 to the registrant's Annual
Report on Form 10-K for the fiscal year ended November 30, 1990 (Commission File
No. 1-9610), filed with the Securities and Exchange Commission.
(20)Incorporated by reference to Exhibit No. 28.2 to the registrant's
registration statement on Form S-1 (File No. 33-14844), filed with the
Securities and Exchange Commission.
(21)Incorporated by reference to Exhibit No. 28.3 to the registrant's
registration statement on Form S-1 (File No. 33-14844), filed with the
Securities and Exchange Commission.
(22)Incorporated by reference to Exhibit No. 28.4 to the registrant's
registration statement on Form S-1 (File No. 33-14844), filed with the
Securities and Exchange Commission.
(23)Incorporated by reference to Exhibit No. 28.5 to the registrant's
registration statement on Form S-1 (File No. 33-14844), filed with the
Securities and Exchange Commission.
(24)Incorporated by reference to Exhibit No. 10.4 to the registrant's Annual
Report on Form 10-K for the fiscal year ended November 30, 1996 (Commission File
No. 1-9610), filed with the Securities and Exchange Commission.
(25)Incorporated by reference to Exhibit No. 10.5 to the registrant's Annual
Report on Form 10-K for the fiscal year ended November 30, 1996 (Commission File
No. 1-9610), filed with the Securities and Exchange Commission.
(26)Incorporated by reference to Exhibit No. 10.6 to the registrant's Annual
Report on Form 10-K for the fiscal year ended November 30, 1996 (Commission File
No. 1-9610), filed with the Securities and Exchange Commission.
(27)Incorporated by reference to Exhibit No. 10.7 to the registrant's Annual
Report on Form 10-K for the fiscal year ended November 30, 1996 (Commission File
No. 1-9610), filed with the Securities and Exchange Commission.
(28)Incorporated by reference to Exhibit No. 10.8 to the registrant's Annual
Report on Form 10-K for the fiscal year ended November 30, 1996 (Commission File
No. 1-9610), filed with the Securities and Exchange Commission.
(29)Incorporated by reference to Exhibit No. 10.36 to the registrant's Annual
Report on Form 10-K for the fiscal year ended November 30, 1998 (Commission File
No. 1-9610), filed with the Securities and Exchange Commission.
(30)Incorporated by reference to Exhibit No. 10.37 to the registrant's Annual
Report on Form 10-K for the fiscal year ended November 30, 1998 (Commission File
No. 1-9610), filed with the Securities and Exchange Commission.
(31)Incorporated by reference to Exhibit 10.1 to the registrant's Quarterly
Report on Form 10-Q for the quarter ended February 28, 1999 (Commission File No.
1-9610), filed with the Securities and Exchange Commission.