-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, cYfN1mayro7CdHRXzVqQzO+HoVL4tDDn4bx4R6jgGxlZ+6W6bjlK8SYhpjZTxJD6 qGIztxB6Q3OA4X8VEz75SQ== 0000815097-95-000003.txt : 199507170000815097-95-000003.hdr.sgml : 19950717 ACCESSION NUMBER: 0000815097-95-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19950531 FILED AS OF DATE: 19950714 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CARNIVAL CORP CENTRAL INDEX KEY: 0000815097 STANDARD INDUSTRIAL CLASSIFICATION: WATER TRANSPORTATION [4400] IRS NUMBER: 591562976 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09610 FILM NUMBER: 95553869 BUSINESS ADDRESS: STREET 1: 3655 N W 87TH AVE STREET 2: PO BOX 1347 CITY: MIAMI STATE: FL ZIP: 33178 BUSINESS PHONE: 3055992600 MAIL ADDRESS: STREET 1: 3655 N W 87TH AVE STREET 2: PO BOX 1347 CITY: MIAMI STATE: FL ZIP: 33178 FORMER COMPANY: FORMER CONFORMED NAME: CARNIVAL CRUISE LINES INC DATE OF NAME CHANGE: 19920703 10-Q 1 [NOTIFY] 72731,737 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 31, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ________________ Commission file number 1-9610 CARNIVAL CORPORATION (Exact name of registrant as specified in its charter) Republic of Panama 59-1562976 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3655 N.W. 87th Avenue, Miami, Florida 33178-2428 (Address of principal executive offices) (zip code) (305) 599-2600 (Registrants telephone number, including area code) None. (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No__ Indicate the number of shares outstanding of each of the issuers classes of common stock, as of July 10, 1995. Class A Common Stock, $.01 par value: 229,799,258 shares Class B Common Stock, $.01 par value: 54,957,142 shares CARNIVAL CORPORATION I N D E X
Page Part I. Financial Information Item 1: Financial Statements Consolidated Balance Sheets - May 31, 1995 and November 30, 1994 1 Consolidated Statements of Operations - Six and Three Months Ended May 31, 1995 and May 31, 1994 2 Consolidated Statements of Cash Flows - Six Months Ended May 31, 1995 and May 31, 1994 3 Notes to Consolidated Financial Statements 4 Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Part II. Other Information Item 6: Exhibits and Reports on Form 8-K 13
PART I. FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS CARNIVAL CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands, except per share data)
May 31, November 30, ASSETS 1995 1994 CURRENT ASSETS Cash and cash equivalents $141,511 $54,105 Short-term investments 64,251 70,115 Accounts receivable 32,078 20,789 Consumable inventories, at average cost 48,910 45,122 Prepaid expenses and other 80,405 50,318 Total current assets 367,155 240,449 PROPERTY AND EQUIPMENT--at cost, less accumulated depreciation and amortization 3,088,973 3,071,431 OTHER ASSETS Goodwill, less accumulated amortization of $44,801 in 1995 and $41,310 in 1994 230,062 233,553 Long-term notes receivable 77,709 76,876 Investments in affiliates and other assets 34,739 47,514 $3,798,638 $3,669,823 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Current portion of long-term debt $78,574 $84,644 Accounts payable 88,013 86,750 Accrued liabilities 109,900 114,868 Customer deposits 395,003 257,505 Dividends payable 21,354 21,190 Total current liabilities 692,844 564,957 LONG-TERM DEBT 881,941 1,046,904 CONVERTIBLE NOTES 115,000 115,000 OTHER LONG-TERM LIABILITIES 14,674 14,028 COMMITMENTS AND CONTINGENCIES (Note 5) SHAREHOLDERS' EQUITY Class A Common Stock; $.01 par value; one vote per share; 399,500 shares authorized; 229,761 and 227,575 shares issued and outstanding 2,298 2,276 Class B Common Stock; $.01 par value; five votes per share; 100,500 shares authorized; 54,957 shares issued and outstanding 550 550 Paid-in-capital 593,503 544,947 Retained earnings 1,505,360 1,390,589 Less-other (7,532) (9,428) Total shareholders' equity 2,094,179 1,928,934 $3,798,638 $3,669,823
The accompanying notes are an integral part of these financial statements. CARNIVAL CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data)
Six Months Three Months Ended May 31, Ended May 31, 1995 1994 1995 1994 REVENUES $872,646 $794,656 $452,826 $409,400 COSTS AND EXPENSES Operating expenses 513,176 476,118 265,947 245,847 Selling and administrative 124,246 108,029 60,071 51,553 Depreciation and amortization 62,044 52,716 30,540 26,220 699,466 636,863 356,558 323,620 OPERATING INCOME 173,180 157,793 96,268 85,780 OTHER INCOME (EXPENSE) Interest income 6,906 3,719 4,907 1,730 Interest expense, net of capitalized interest (33,315) (24,846) (15,764) (11,709) Other income (expense) 5,189 65 3,827 164 Income tax benefit 5,361 6,206 531 1,921 (15,859) (14,856) (6,499) (7,894) NET INCOME $157,321 $142,937 $ 89,769 $ 77,886 EARNINGS PER SHARE $.56 $.51 $.32 $.28
The accompanying notes are an integral part of these financial statements. CARNIVAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Six Months Ended May 31, 1995 1994 OPERATING ACTIVITIES: Net income $157,321 $142,937 Adjustments: Depreciation and amortization 62,044 52,716 Other 3,395 1,068 Changes in operating assets and liabilities: Increase in receivables (11,219) (13,034) Increase in consumable inventories (3,788) (3,249) Increase in prepaid and other (30,320) (19,319) Increase in accounts payable 1,263 15,794 Decrease in accrued liabilities (4,968) (178) Increase in customer deposits 137,498 112,998 Net cash provided from operations 311,226 289,733 INVESTING ACTIVITIES: Decrease in short-term investments 5,864 14,774 Additions to property and equipment, net (75,919) (95,002) Decrease (increase) in other non-current assets 11,942 (2,068) Net cash used for investing activities (58,113) (82,296) FINANCING ACTIVITIES: Principal payments of long-term debt (307,257) (165,783) Dividends paid (42,386) (39,530) Proceeds from long-term debt 136,212 30,260 Issuance of common stock 47,724 980 Net cash used for financing activities (165,707) (174,073) Net increase in cash and cash equivalents 87,406 33,364 Cash and cash equivalents at beginning of period 54,105 60,243 Cash and cash equivalents at end of period $141,511 $ 93,607 Supplemental disclosures: Cash paid during the period for: Interest (net of amount capitalized) $32,760 $23,848
The accompanying notes are an integral part of these financial statements. CARNIVAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - BASIS FOR PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS The financial statements included herein have been prepared by Carnival Corporation (the "Company") without audit pursuant to the rules and regulations of the Securities and Exchange Commission. The accompanying consolidated balance sheet at May 31, 1995, the consolidated statements of operations for the six and three months ended May 31, 1995 and 1994 and cash flows for the six months ended May 31, 1995 and 1994 are unaudited and, in the opinion of management, contain all adjustments, consisting of only normal recurring accruals, necessary for a fair presentation. The Company's operations are seasonal and results for interim periods are not necessarily indicative of the results for the entire year. The accompanying financial statements include the consolidated balance sheets and statements of operations and cash flows of the Company and its subsidiaries. All material intercompany transactions and accounts have been eliminated in consolidation. On December 14, 1994, a two-for-one stock split was effected whereby one additional common share, par value $.01, was issued for each share outstanding to shareholders of record on November 30, 1994. All share and per share data appearing in the consolidated financial statements and notes thereto has been retroactively adjusted for this stock split. NOTE 2 - PROPERTY AND EQUIPMENT Property and equipment consists of the following:
Vessels $3,153,567 $3,147,026 Vessels under construction 239,078 207,128 3,392,645 3,354,154 Land, buildings and improvements 125,811 95,294 Transportation and other equipment 157,742 152,649 Total property and equipment 3,676,198 3,602,097 Less - accumulated depreciation and amortization (587,225) (530,666) $3,088,973 $3,071,431
Interest costs associated with the construction of vessels and buildings, until they are placed in service, are capitalized and amounted to $8.1 million and $9.6 million for the six months ended May 31, 1995 and May 31, 1994, respectively. NOTE 3 - LONG-TERM DEBT Long-term debt consists of the following:
May 31, November 30, 1995 1994 (in thousands) Unsecured Revolving Credit Facility Due 1999 $ - $238,000 Mortgages and other loans payable bearing interest at rates ranging from 8% to 9.9%, secured by vessels, maturing through 1999 247,925 287,642 Unsecured 5.75% Notes Due March 15, 1998 200,000 200,000 Unsecured 6.15% Notes Due October 1, 2003 124,943 124,939 Unsecured 7.20% Debentures Due October 1, 2023 124,864 124,862 Unsecured 7.70% Notes Due July 15, 2004 99,896 99,890 Unsecured 7.05% Notes Due May 15, 2005 99,800 Other loans payable 63,087 56,215 960,515 1,131,548 Less portion due within one year (78,574) (84,644) $ 881,941 $1,046,904
Property and equipment with a net book value of $961 million at May 31, 1995 is pledged as collateral against the mortgage indebtedness. In May 1995, the Company issued $100 million of unsecured 7.05% Notes Due May 15, 2005 under a shelf registration statement. In July 1992, the Company issued $115 million of 4-1/2% Convertible Subordinated Notes Due July 1, 1997. The notes are convertible into 57.55 shares of the Company's Class A Common Stock per $1,000 of notes. As of May 31, 1995 the notes are convertible into 6.6 million shares of Class A Common Stock. NOTE 4 - SHAREHOLDERS' EQUITY The following represents an analysis of the changes in shareholders' equity for the six months ended May 31, 1995:
COMMON STOCK $.01 PAR VALUE PAID-IN RETAINED CLASS A CLASS B CAPITAL EARNINGS OTHER TOTAL (in thousands) Balance November 30, 1994 $2,276 $550 $544,947 $1,390,589 $(9,428) $1,928,934 Net income for the period 157,321 157,321 Cash dividends (42,550) (42,550) Issuance of common stock 21 46,535 46,556 Changes in securities valuation allowance 1,023 1,023 Issuance of stock to employees under stock plans 1 2,021 2,022 Vested portion of common stock under restricted stock plan 873 873 Balance May 31, 1995 $2,298 $550 $593,503 $1,505,360 $(7,532) $2,094,179
NOTE 5 - COMMITMENTS AND CONTINGENCIES Capital Expenditures The following table provides a description of ships currently under contract for construction (in millions of dollars):
Expected Number Estimated Delivery Contract of Lower Total Ship Name Operating Unit Date Denomination Berths Cost Imagination Carnival Cruise Lines 6/95 Finnish Markka 2,040 $330 Inspiration Carnival Cruise Lines 3/96 U. S. Dollar 2,040 270 Veendam Holland America Line 6/96 Italian Lira 1,266 225 Destiny Carnival Cruise Lines 9/96 Italian Lira 2,640 400 To Be Named Holland America Line 9/97 Italian Lira 1,320 235 To Be Named Carnival Cruise Lines 2/98 U. S. Dollar 2,040 300 To Be Named Carnival Cruise Lines 11/98 U. S. Dollar 2,040 300 To Be Named Carnival Cruise Lines 12/98 Italian Lira 2,640 415 16,026 $2,475
Contracts denominated in foreign currencies have been fixed into U.S. Dollars through the utilization of forward currency contracts. In connection with the vessels under contract for construction described above, the Company has paid $239 million through May 31, 1995 and anticipates paying $574 million during the twelve month period ended May 31, 1996 and approximately $1.7 billion beyond May 31, 1996. The Imagination was delivered in June 1995 and began service July 1, 1995. Litigation In the normal course of business, various claims and lawsuits have been filed or are pending against the Company. The majority of these claims and lawsuits are covered by insurance. Management believes the outcome of any such suits which are not covered by insurance would not have a material adverse effect on the Company's financial condition or results of operations. ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General The Company earns its revenues primarily from (i) the sale of passenger tickets, which includes accommodations, meals, airfare and substantially all shipboard activities, and (ii) the sale of goods and services on board its cruise ships, such as casino gaming, liquor sales, gift shop sales and other related services. Collectively, such revenues are referred to herein as "Cruise revenues". The Company also derives revenues from tour operations ("Tour revenues"). The following table presents selected segment and statistical information for the periods indicated:
Six Months Ended May 31, Three Months Ended May 31, 1995 1994 1995 1994 (in thousands) REVENUES: Cruise $838,607 $762,855 $425,962 $384,350 Tour 38,848 37,067 31,557 30,146 Intersegment revenues (4,809) (5,266) (4,693) (5,096) $872,646 $794,656 $452,826 $409,400 OPERATING EXPENSES: Cruise $481,318 $444,911 $243,819 $223,363 Tour 36,667 36,473 26,821 27,580 Intersegment expenses (4,809) (5,266) (4,693) (5,096) $513,176 $476,118 $265,947 $245,847 OPERATING INCOME: Cruise $185,489 $171,194 $ 98,282 $ 90,002 Tour (12,309) (13,401) (2,014) (4,222) $173,180 $157,793 $ 96,268 $85,780 SELECTED STATISTICAL INFORMATION: Passengers Carried 697 632 354 318 Passenger Cruise Days 4,276 3,845 2,169 1,929 Occupancy Percentage 100.1% 100.7% 100.3% 101.2%
The following table sets forth statements of operations data expressed as a percentage of total revenues:
Six Months Three Months Ended May 31, Ended May 31, 1995 1994 1995 1994 REVENUES 100% 100% 100% 100% COSTS AND EXPENSES: Operating expenses 59 60 59 60 Selling and administrative 14 14 13 13 Depreciation and amortization 7 6 7 6 OPERATING INCOME 20 20 21 21 OTHER INCOME (EXPENSE) (2) (2) (1) (2) NET INCOME 18% 18% 20% 19%
The Company's different businesses experience varying degrees of seasonality. The Company's revenue from the sale of passenger tickets for Carnival Cruise Lines' ("Carnival") ships is moderately seasonal. Historically, demand for Carnival cruises has been greater during the periods from late December through April and late June through August. Holland America Line ("HAL") cruise revenues are more seasonal than Carnival's cruise revenues. Demand for HAL cruises is strongest during the summer months when HAL ships operate in Alaska. Demand for HAL cruises is lower during the winter months when HAL ships sail in the more competitive Caribbean market. The Company's tour revenues are extremely seasonal with a large majority of tour revenues generated during the late spring and summer months in conjunction with the Alaska cruise season. Six Months Ended May 31, 1995 Compared To Six Months Ended May 31, 1994 Revenues The increase in total revenues of $78.0 million from the first half of 1994 to the first half of 1995 was comprised primarily of a $75.8 million, or 9.9%, increase in cruise revenues for the period. The increase in cruise revenues was primarily the result of a 11.8% increase in capacity for the period resulting from the addition of HAL's cruise ship Ryndam in October 1994 and Carnival's Fascination in July 1994. Also affecting cruise revenues were slightly lower gross passenger per diems and occupancy rates. The gross passenger per diems decreased primarily due to a reduction in the percentage of passengers electing the Company's air program. When a passenger elects to purchase his/her own air transportation, rather than use the Company's air program, both the Company's cruise revenues and operating expenses decrease by approximately the same amount. The reduction in occupancy rates reflect reduced occupancy levels for Holland America Line in the Caribbean partially offset by increased occupancy levels for Carnival Cruise Lines. Passenger cruise days (one passenger sailing for a period of one day is one passenger day) are expected to increase during the next fiscal quarter as compared to the same period in 1994 as a result of additional capacity provided from the delivery of the Fascination in July 1994, the Ryndam in September 1994, and the Imagination which was delivered in June 1995. Due to the delivery of the Imagination, the Company's capacity is also expected to increase for the fourth quarter of fiscal 1995. In June 1995, a fire, which was quickly extinguished, broke out in the engine control room on the Celebration. There were no injuries to passengers or crew, however, there was damage to one of the vessel's electrical control panels. The time necessary to complete repairs to the Celebration as a result of this incident will partially offset the capacity increases in the third quarter of 1995 discussed in the preceding paragraph. Although the evaluation of the total costs of this incident onboard the Celebration has not been completed, management believes the impact on earnings in the third quarter of 1995 could approximate up to $14 million or five cents per share. Revenues from the Company's Tour operations increased $1.8 million, or 4.8%, to $38.8 million in 1995 from $37.1 million in 1994. The increase was primarily the result of an increase in the transportation revenues generated by the Gray Line of Alaska tour and motorcoach operations. Costs and Expenses Operating expenses increased $37.1 million, or 7.8%, from the first half of 1994 to the first half of 1995. Cruise operating costs increased by $36.4 million, or 8.2%, to $481.3 million in the first half of 1995 from $444.9 million in the first half of 1994, primarily due to additional costs associated with the increased capacity in the first half of 1995. Tour operating expenses remained essentially unchanged. Selling and administrative costs increased $16.2 million, or 15.0%, primarily due to a 29.6% increase in advertising expenses during the first half of 1995 as compared with the same period of 1994. Depreciation and amortization increased by $9.3 million, or 17.7%, to $62.0 million in the first half of 1995 from $52.7 million in the first half of 1994 primarily due to the addition of the Ryndam and the Fascination. Other Income (Expense) Total other expense (net of other income) of $15.9 million increased in the first half of 1995 from $14.9 million in the first half of 1994. Interest income increased $3.2 million primarily due to the recognition of interest income related to the sale of Crystal Palace and higher interest rates. Interest expense increased to $41.5 million in the first half of 1995 from $34.5 million in the first half of 1994 primarily as a result of increased debt levels and higher interest rates on variable rate debt. The increased debt levels were the result of expenditures made in connection with the ongoing construction and delivery of new cruise ships. Capitalized interest decreased to $8.1 million in the first half of 1995 from $9.6 million in the first half of 1994 due to lower levels of investments in vessels under construction. Other income increased to $5.2 million in the first half of 1995 primarily as a result of a gain on the sale of the Company's entire interest in Epirotiki Cruise Line and certain other non-related, non-recurring items. Three Months Ended May 31, 1995 Compared To Three Months Ended May 31, 1994 Revenues The increase in total revenues of $43.4 million from the second quarter of 1994 to the second quarter of 1995 was comprised primarily of a $41.6 million, or 10.8%, increase in cruise revenues for the period. The increase in cruise revenues was primarily the result of a 13.4% increase in capacity for the period resulting from the addition of HAL's cruise ship Ryndam in October 1994 and Carnival's Fascination in July 1994. Also affecting cruise revenues were slightly lower gross passenger per diems and occupancy rates. The gross passenger per diems decreased primarily due to a reduction in the percentage of passengers electing the Company's air travel. When a passenger elects to purchase their own air transportation, rather than use the Company's air program, both the Company's cruise revenues and operating expenses decrease by approximately the same amount. The lower occupancy rates reflect reduced occupancy levels for Holland America Line in the Caribbean partially offset by increased occupancy levels for Carnival Cruise Lines. Revenues from the Company's Tour operations increased $1.4 million, or 4.7%, to $31.6 million in 1995 from $30.1 million in 1994. The increase was primarily the result of an increase in the transportation revenues generated by the Gray Line of Alaska tour and motorcoach operations. Costs and Expenses Operating expenses increased $20.1 million, or 8.2%, from the second quarter of 1994 to the second quarter of 1995. Cruise operating costs increased by $20.5 million, or 9.2%, to $243.8 million in the second quarter of 1995 from $223.4 million in the second quarter of 1994, primarily due to additional costs associated with the increased capacity in the second quarter of 1995. Tour operating expenses remained essentially unchanged. Selling and administrative costs increased $8.5 million, or 16.5%, primarily due to a 37.8% increase in advertising expenses during the second quarter of 1995 as compared with the same quarter of 1994. Depreciation and amortization increased by $4.3 million, or 16.5%, to $30.5 million in the second quarter of 1995 from $26.2 million in the second quarter of 1994 primarily due to the addition of the Ryndam and the Fascination. Other Income (Expense) Total other expense (net of other income) of $6.5 million decreased in the second quarter of 1995 from $7.9 million in the second quarter of 1994. Interest income increased $3.2 million primarily due to the recognition of interest income related to notes from the sale of Crystal Palace and increased interest rates. Interest expense increased to $20.1 million in the second quarter of 1995 from $17.0 million in the second quarter of 1994 primarily as a result of increased debt levels and higher interest rates on variable rate debt. The increased debt levels were the result of expenditures made in connection with the ongoing construction and delivery of new cruise ships. Capitalized interest decreased to $4.3 million in the second quarter of 1995 from $5.3 million in the second quarter of 1994 due to lower levels of advance payments for vessels under construction. Other income increased to $3.8 million in the second quarter of 1995 primarily as a result of a gain on the sale of the Company's entire interest in Epirotiki Cruise Line and certain other non-related, non-recurring items. LIQUIDITY AND CAPITAL RESOURCES Sources and Uses of Cash The Company's business provided $311.2 million of net cash from operations during the six months ended May 31, 1995, an increase of 7.4% compared to the corresponding period in 1994. The increase between periods was primarily the result of an increase in net income and advance customer deposits. During the six months ended May 31, 1995, the Company made cash expenditures of approximately $75.9 million on capital projects of which $23 million was spent on the purchase of the Company's existing corporate headquarters facility located in Miami, Florida and $32 million was spent in connection with its ongoing shipbuilding program. The remainder was spent on vessel refurbishments, tour assets and other equipment. In April 1995, the Company received $47 million of net proceeds from the sale of 2.1 million shares of Class A Common Stock by the Company pursuant to the underwriters exercise of an overallotment option in a secondary offering by certain shareholders of the Company. Also, in May 1995, the Company issued $100 million of 7.05% Notes Due May 15, 2005 and received approximately $99.2 million in cash proceeds net of underwriting fees and other costs, which was used as described below. The Company also made scheduled principal payments totalling approximately $39.7 million under various individual vessel mortgage loans and repaid the outstanding balance on the $750 million revolving credit facility due 1999 (the "$750 Million Revolving Credit Facility") during the six months ended May 31, 1995. During the six months ended May 31, 1995, the Company declared and paid cash dividends of approximately $42.5 million. In June 1995 the Company took delivery of the Imagination. The Company paid $235 million in cash, $100 million was provided from the 7.05% Notes Due May 15, 2005, $101 million was drawn from the Company's $750 million Revolving Credit Facility, and the remaining $34 million was provided from the Company's treasury. Future Commitments Excluding the Imagination, which was delivered in June 1995, the Company has contracts for the delivery of seven new vessels over the next four years. The Company will pay approximately $340 million, during the twelve month period ending May 31, 1996 relating to the construction and delivery of those new cruise ships and approximately $1.7 billion beyond May 31 , 1996. See Note 5 in the accompanying financial statements for more information related to commitments for the construction of cruise ships. In addition, the Company has $1.1 billion of long-term debt and convertible notes of which $79 million is due during the twelve month period ending May 31, 1996. See Note 3 in the accompanying financial statements for more information regarding the Company's debt. Funding Sources Cash from operations is expected to be the Company's principal source of capital to fund its debt service requirements and ship construction costs. In addition, the Company may fund a portion of the construction cost of new ships from borrowings under the $750 Million Revolving Credit Facility and/or through the issuance of long-term debt in the public or private markets. One of the Company's subsidiaries also has a $25 million line of credit. Following the borrowing of the final $101 million payment for the Imagination in June 1995, $649 million was available for borrowing by the Company under the $750 Million Revolving Credit Facility. To the extent that the Company should require or choose to fund future capital commitments from sources other than operating cash or from borrowings under the $750 Million Revolving Credit Facility, the Company believes that it will be able to secure such financing from banks or through the offering of debt and/or equity securities in the public or private markets. In this regard, the Company has filed two Registration Statements on Form S-3 (the "Shelf Registration") relating to a shelf offering of up to $500 million aggregate principal amount of debt or equity securities. Through May 1995, the Company has issued $100 million of unsecured notes due July 2004 bearing interest at 7.7% per annum, $30 million of five to ten-year notes bearing interest at rates ranging from 5.95% to 7% per annum, and $100 million of unsecured notes due May 15, 2005 bearing interest at 7.05% per annum. A balance of $270 million aggregate principal amount of debt or equity securities remains available for issuance under the Shelf Registration. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In 1986 a lawsuit was filed in Federal District Court by the American Association of Cruise Passengers ("AACP") against the Company, Holland America Line-Westours, Inc., ten other cruise lines, the Cruise Lines Int'l Association ("CLIA"), and an association of travel agents seeking treble and punitive damages, alleging violation of federal and state antitrust laws and interference with business expectancies under state common law. The amount of damages sought is not specified in the complaint and has not been revealed in discovery to date. AACP has asserted that the defendants have agreed with each other to boycott AACP because of AACP's practice of rebating travel agency commissions to passengers and advertising discounts on such cruise lines' advertised fares. In March 1995, the Federal District Court dismissed this suit for the second time against both Carnival Cruise Lines and Holland America Line on jurisdictional grounds. Plaintiff may appeal again or file its claim in state court. In either case, the Company will vigorously oppose. The Company does not believe that the outcome of this lawsuit will have a material adverse affect on the Company's financial condition or results of operations. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The annual meeting of shareholders of the Company was held on April 17, 1995 (the "Annual Meeting"). Holders of Class A Common Stock were entitled to elect four of the thirteen directors to be elected at the Annual Meeting and the holders of Class B Common Stock were entitled to elect the remaining nine directors. On all other matters which came before the Annual Meeting, holders of Class A Common Stock were entitled to one vote for each share held and holders of Class B Common Stock were entitled to five votes for each share held. Proxies for (i) 197,484,242 shares of the 227,657,502 shares of Class A Common Stock entitled to vote and (ii) 54,957,142 shares of the 54,957,142 shares of Class B Common Stock entitled to vote, were received in connection with the annual meeting. The following table sets forth the names of the four persons elected at the Annual Meeting to serve as Class A Directors until the next annual meeting of shareholders of the Company and the number of votes cast for, against or withheld with respect to each person.
CLASS A DIRECTORS FOR AGAINST WITHHELD William S. Ruben 197,255,773 -0- 228,469 Stuart S. Subotnick 197,257,756 -0- 226,486 Sherwood M. Weiser 197,071,949 -0- 412,293 Uzi Zucker 197,073,156 -0- 411,086
The following nine persons were elected to serve as Class B Directors by the unanimous vote of the 54,957,142 shares of Class B Common Stock voted at the Annual Meeting: Micky Arison, Maks L. Birnbach, Robert H. Dickinson, Howard S. Frank, A. Kirk Lanterman, Harvey Levinson, Meshulam Zonis, Richard G. Capen, Jr. and Modesto Maidique. The following table sets forth certain additional matters which were submitted to the shareholders for approval at the Annual Meeting and the tabulation of the votes of the shares of Class A Common Stock with respect to each such matter. All of the shares of Class B Common Stock voted at the Annual Meeting were cast in favor of each of the additional matters.
MATTER FOR AGAINST WITHHELD Approval of an amendment to the Amended and Restated Articles of Incorporation of the Company. 1/ 437,285,971 21,714,440 3,037,594 Approval of the amendments to the Carnival Cruise Lines 1992 Stock Option Plan. 2/ 456,681,433 12,596,908 2,991,511 Ratification of Accountants. 3/ 469,423,537 71,546 2,774,769
1. The Amended and Restated Articles of Incorporation were amended to clarify the ability of the Company to sell less than all or less than substantially all of the assets of the Company without shareholder approval. 2. The Carnival Cruise Lines 1992 Stock Option Plan was amended to (i) increase the maximum number of shares that may be made subject to options under the plan from 1,500,000 to 4,000,000, (ii) to provide that the maximum number of shares with respect to which options may be granted to any individual in any calendar year during the term of the plan cannot exceed 1,000,000 shares of Class A Common Stock and (iii) to modify the class of persons who may serve on the Plan Administration Committee. 3. The shareholders approved the selection of Price Waterhouse LLP as the independent accountants of the Company. ______________ On June 28, 1995, a special meeting of the holders of Class B Common Stock was held. At this meeting, Harvey Levinson was removed as a Class B Director by a unanimous vote of the 54,957,142 shares of Class B Common Stock voted at the meeting. Shari Arison Dorsman was elected to fill the vacancy created by Mr. Levinson's removal by a unanimous vote of the 54,957,142 Class B Common Stock voted at the meeting. ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 4.1 Agreement of the Company dated July 12, 1995 to furnish certain debt instruments to the Securities and Exchange Commission 11 Statement regarding computation of per share earnings 12 Ratio of Earnings to Fixed Charges 27 Financial Data Schedule (b) Reports on Form 8-K Current report on Form 8-K (File No. 1-9610) filed with the Commission on April 12, 1995 related to filing a press release. Report on Form 8-K (File No. 1-9610) filed with the Commission on May 26, 1995 in connection with the issuance of the $100 Million Notes Due May 15, 2005.
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. CARNIVAL CORPORATION Dated: July 12, 1995 BY /s/ Micky Arison Micky Arison Chairman of the Board and Chief Executive Officer Dated: July 12, 1995 BY /s/ Howard S. Frank Howard S. Frank Vice-Chairman, Chief Financial and Accounting Officer PAGE INDEX TO EXHIBITS
Page No. in Sequential Numbering System Exhibits 4.1 Agreement of the Company dated July 12, 1995 to furnish certain debt instruments to the Securities and Exchange Commission 11 Statement regarding computation of per share earnings 12 Ratio of Earnings to Fixed Charges 27 Financial Data Schedule
EX-4.1 2 EXHIBIT 4.1 July 12, 1995 Securities and Exchange Commission 450 Fifth Street, N.W. Judiciary Plaza Washington, DC 20549 RE: Carnival Corporation Commission File No. 1-9610 Gentlemen: Pursuant to Item 601(b)(4)(iii) of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended, Carnival Corporation (the "Company") hereby agrees to furnish copies of certain long-term debt instruments to the Securities and Exchange Commission upon the request of the Commission, and , in accordance with such regulation, such instruments are not being filed as part of the Annual Report on Form 10-K of the Company for its fiscal year ended November 30, 1994 or 1995. Very Truly Yours, CARNIVAL CORPORATION Arnaldo Perez Acting General Counsel EX-11 3 EXHIBIT 11 CARNIVAL CORPORATION STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS (in thousands, except per share data)
Six Months Three Months Ended May 31, Ended May 31, 1995 1994 1995 1994 Net income $157,321 $142,937 $ 89,769 $77,886 Adjustments to net income for the purpose of computing fully diluted earnings per share: Interest reduction from assumed conversion of 4.5% Convertible Subordinated Notes 2,770 2,770 1,385 1,385 Adjusted net income $160,091 $145,707 $ 91,154 $ 79,271 Weighted average shares outstanding 283,356 282,672 283,886 282,670 Adjustments to weighted average shares outstanding for the purpose of computing fully diluted earnings per share: Additional shares issuable upon assumed conversion of 4.5% Convertible Subordinated Notes 6,618 6,618 6,618 6,618 Adjusted weighted average shares outstanding 289,974 289,290 290,504 289,288 Earnings per share: Primary $.56 $.51 $.32 $.28 Fully Diluted* $.55 $.50 $.31 $.27
*In accordance with Accounting Principles Board Opinion No. 15, the Company does not present fully diluted EPS in its financial statements because the Company's convertible securities are anti-dilutive or result in a less than 3% dilution for the periods presented. EX-12 4 EXHIBIT 12 CARNIVAL CORPORATION RATIO OF EARNINGS TO FIXED CHARGES (in thousands, except ratios)
Six Months Ended May 31, 1995 1994 Net Income $157,321 $142,937 Income tax benefit (5,361) (6,206) Income before income tax benefit 151,960 136,731 Fixed Charges: Interest expense, net 33,315 24,846 Interest portion of rental expense (1) 841 1,186 Capitalized interest 8,149 9,608 Total Fixed Charges 42,305 35,640 Fixed Charges Not Currently Affecting Income: Capitalized interest 8,149 9,608 Earnings before fixed charges $186,116 $162,763 Ratio of earnings to fixed charges 4.4x 4.6x
________________________ (1) Represents one-third of rental expense, which Company management believes to be representative of the interest portion of rental expense. EX-27 5 ART. 5 FDS FOR 2ND QUARTER 10-Q
5 1,000 6-MOS NOV-30-1995 MAY-31-1995 141,511 64,251 32,078 0 48,910 367,155 3,676,198 587,225 3,798,638 692,844 996,941 2,848 0 0 2,091,331 3,798,638 0 872,646 0 513,176 0 0 41,464 151,960 5,361 157,321 0 0 0 157,321 .56 .55
-----END PRIVACY-ENHANCED MESSAGE-----