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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, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-9610
CARNIVAL CORPORATION
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(Exact name of registrant as specified in its charter)
Republic of Panama 59-1562976
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3655 N.W. 87th Avenue, Miami, Florida 33178-2428
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (305) 599-2600
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Securities registered pursuant to Section 12(b) of the Act:
NAME OF EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
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Class A Common Stock New York Stock
($.01 par value) Exchange, Inc.
4-1/2% Convertible New York Stock
Subordinated Notes due July 1, 1997 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
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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. [ ].
The aggregate market value of the voting stock held by non-affiliates of the
Registrant is approximately $2,172,000,000 based upon the closing market price
on February 8, 1995 of a share of Class A Common Stock on the New York Stock
Exchange as reported by the Wall Street Journal.
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At February 8, 1995, the Registrant had outstanding 227,657,557 shares
of its Class A Common Stock, $.01 par value and 54,957,142 shares of its Class
B Common Stock, $.01 par value.
DOCUMENTS INCORPORATED BY REFERENCE
The information described below and contained in the Registrant's 1994
annual report to shareholders on pages 20 through 36 furnished to the
Commission pursuant to Rule 14a-3(b) of the Exchange Act, is incorporated by
reference into this 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 8. Financial Statements and Supplementary Data
The information described below and contained in the Registrant's 1995
definitive Proxy Statement, to be filed with the Commission is incorporated by
reference into this 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.
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PART I
ITEM 1. BUSINESS
A. GENERAL
Carnival Corporation was incorporated under the laws of the Republic of
Panama in November 1974. In April of 1994 the shareholders approved a name
change of the company from Carnival Cruise Lines, Inc. to Carnival Corporation.
Carnival Corporation and subsidiaries (the "Company") is the world's largest
multiple-night cruise company based on the number of passengers carried and
revenues generated. The Company offers a broad range of cruise products,
serving the contemporary cruise market through Carnival Cruise Lines
("Carnival" - a division of Carnival Corporation), the premium market through
Holland America Line and the luxury market through Windstar Cruises and the
Company's joint venture, Seabourn Cruise Line. The nine Carnival ships have an
aggregate capacity of 14,756 passengers with itineraries in the Caribbean and
Mexican Riviera. The seven Holland America Line ships have an aggregate
capacity of 8,795 passengers with itineraries in the Caribbean and Alaska and
through the Panama Canal, as well as other worldwide itineraries. The three
Windstar ships have an aggregate capacity of 444 passengers with itineraries in
the Caribbean, the South Pacific, and the Mediterranean. Seabourn Cruise Line
operates two 204 passenger cruise ships in the luxury market with itineraries
in the Caribbean, the Baltic, the Mediterranean and the Far East. Epirotiki
Line, a 49% owned joint venture (See Item 1. Business - Other Cruise
Activities), operates eight passenger cruise ships with itineraries in the
Aegean and Eastern Mediterranean.
The Company has signed agreements with a Finnish shipyard providing for the
construction of four additional 2,040-berth SuperLiners for Carnival with
delivery expected in June 1995, March 1996, February 1998 and November 1998.Two
additional 2,640-berth cruise vessels are under contract for construction for
Carnival from an Italian shipyard scheduled for delivery in September 1996 and
December 1998. The Company also has agreements with the same Italian shipyard
for one 1,266-berth cruise ship and one 1,320- berth cruise ship for Holland
America Line with delivery expected in June 1996 and September 1997,
respectively.
The Company also operates a tour business: Holland America Westours.
Holland America Westours markets sight-seeing tours both separately and as part
of Holland America Line cruise/tour packages. Holland America Westours
operates 16 hotels in Alaska and the Canadian Yukon, four luxury day-boats
offering tours to the glaciers of Alaska and the Yukon River, over 290 motor
coaches used for sight-seeing and charters in the states of Washington and
Alaska and in the Canadian Rockies and ten private domed rail cars which are
run on the Alaskan railroad between Anchorage and Fairbanks.
Previously, the Company adopted a plan to dispose of the Crystal Palace,
which comprised the entire resort and casino segment of the Company's
operations. In August 1994, the Company sold 100% of the shares of Carnival's
Crystal Palace Hotel Corporation, Ltd. for $80 million. See Note 5 in
Carnival Corporation's 1994 Annual Report to Shareholders incorporated by
reference into this document for more information.
B. CRUISE SHIP SEGMENT
INDUSTRY
The passenger cruise industry has experienced substantial growth over the
past 25 years. The industry has evolved from a trans-ocean carrier service
into a vacation alternative to land-based resorts and sight-seeing
destinations. According to Cruise Lines International Association ("CLIA"), an
industry trade group, in 1970 approximately 500,000 North American passengers
took cruises for three consecutive nights or more. CLIA estimates that this
number reached 4.5 million passengers in 1994 and is expected to grow 4% to
approximately 4.7 million passengers in 1995.
Despite the growth of the cruise industry to date, the Company believes
that the estimated 4.7 million passengers who will take cruises in 1995 will
represent only approximately 2% of the overall North American vacation market,
defined as persons who travel for leisure purposes on trips of three nights or
longer involving at least one night's stay in a hotel.
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According to CLIA, in 1982 there were approximately 84 cruise ships serving
the North American market offering voyages of three or more days, having an
aggregate capacity of approximately 46,000 passengers. By the end of 1994, the
market included 138 vessels with an aggregate capacity of approximately 107,000
passengers. CLIA estimates that by the end of 1995 the North American market
will be served by 136 vessels having an aggregate capacity of approximately
107,000 passengers. The following table sets forth the industry and Company
growth over the past five years based on passengers carried for at least three
consecutive nights:
COMPANY CRUISE
PASSENGERS AS
NORTH AMERICAN COMPANY CRUISE A PERCENTAGE OF
CRUISE PASSENGERS NORTH AMERICAN
YEAR PASSENGERS* CARRIED CRUISE PASSENGERS
- ---- ---------- ------- -----------------
(Calendar) (Fiscal)
1994 4,535,000(est) 1,354,000 29.9%
1993 4,480,000 1,154,000 25.8
1992 4,136,000 1,153,000 27.9
1991 3,979,000 1,100,000 27.6
1990 3,640,000 953,000 26.2
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* Source: CLIA.
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From 1990 through 1994, the Company's average compound annual growth rate
in number of passengers carried was 9.2% versus the industry average of 5.7%.
During this period, the Company's percentage share of passengers carried
increased from 26.2% to 29.9%.
The Company's passenger capacity has grown from 13,399 at November 30, 1989
to 23,995 at November 30, 1994. In early 1990, the completion of the Fantasy
brought 2,044 berths into service. The lengthening of the Westerdam increased
capacity by another 490 berths beginning in March 1990. In June 1991, the
Ecstasy added an additional 2,040 berths. The delivery of the Statendam,
Sensation and Maasdam in 1993 increased capacity an additional 4,572 berths
more than offsetting a decrease of 906 berths related to the sale of the Mardi
Gras. During 1994, net capacity increased by 2,369 berths due to the delivery
of the Fascination and Ryndam, net of the 937 berth FiestaMarina which was
returned to Epirotiki Lines (See Item 1. Business - Other Cruise Activities).
CRUISE SHIPS AND ITINERARIES
Under the Carnival Cruise Lines name, the Company serves the contemporary
market with nine ships (collectively, the "Carnival Ships"). Eight of the
Carnival Ships were designed by and built for Carnival, including seven
SuperLiners which are among the largest in the cruise industry. Eight of the
Carnival Ships operate in the Caribbean and one Carnival Ship calls on ports in
the Mexican Riviera.
Through its subsidiary, HAL Antillen N.V. ("HAL"), the Company operates ten
cruise ships offering premium or luxury specialty vacations. Seven of these
ships, the Rotterdam, the Nieuw Amsterdam, the Noordam, the Westerdam, the
Statendam, the Maasdam and the Ryndam are operated under the Holland America
Line name (the "HAL Ships"). The remaining three ships, the Wind Star, the
Wind Song and the Wind Spirit, are operated under the Windstar Cruises name
(the "Windstar Ships"). Six of the HAL Ships were designed by and built for
HAL. The three Windstar Ships were built for Windstar Sail Cruises, Ltd. (
"WSCL") between 1986 and 1988.
HAL offers premium cruises of various lengths, primarily in the Caribbean,
Alaska, Panama Canal, Europe, the Mediterranean, Hawaii, Mexico, South
Pacific, South America and the Orient. Cruise lengths vary from 3 to 98 days,
with a large proportion being seven or ten days in length. Periodically, the
HAL Ships make longer grand cruises or operate on short-term special
itineraries. For example, in 1994, the Statendam made a 98-day world cruise, a
36-day Grand Mediterranean and Black Sea voyage and the Maasdam made a 62-day
Grand Australian and New Zealand voyage. HAL will continue to offer these
special and longer itineraries in order to increase travel opportunities for
its customers and strengthen its cruise offerings in view of the fleet
expansion. The three Windstar Ships currently operate in the Caribbean, the
Mediterranean and the South Pacific.
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The following table presents summary information concerning the Company's
ships. Areas of operation are based on current itineraries and are subject to
change.
YEAR
FIRST IN GROSS LENGTH PRIMARY
COMPANY PAX REGISTERED AND AREAS OF
NAME REGISTRY BUILT SERVICE CAP* TONS WIDTH OPERATION
- ---- -------- ----- -------- ---- ---- ----- ---------
CARNIVAL CRUISE LINES
- ---------------------
Fascination Panama 1994 1994 2,040 70,367 855/104 Caribbean
Sensation Panama 1993 1993 2,040 70,367 855/104 Caribbean
Ecstasy Liberia 1991 1991 2,040 70,367 855/104 Caribbean
Fantasy Liberia 1990 1990 2,044 70,367 855/104 Bahamas
Celebration Liberia 1987 1987 1,486 47,262 738/92 Caribbean
Jubilee Liberia 1986 1986 1,486 47,262 738/92 Mexican Riviera
Holiday Bahamas 1985 1985 1,452 46,052 727/92 Mexican Riviera
Tropicale Liberia 1982 1982 1,022 36,674 660/85 Caribbean
Festivale Bahamas 1961 1978 1,146 38,175 760/90 Caribbean
-------
Total Carnival Ships Capacity................... 14,756
-------
HOLLAND AMERICA LINE
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Ryndam Bahamas 1994 1994 1,266 55,451 720/101 Alaska, Caribbean
Maasdam Bahamas 1993 1993 1,266 55,451 720/101 Europe, Caribbean
Statendam Bahamas 1993 1993 1,266 55,451 720/101 Alaska, Caribbean
Westerdam Bahamas 1986 1988 1,494 53,872 798/95 Canada, Caribbean
Noordam Netherlands 1984 1984 1,214 33,930 704/89 Alaska, Caribbean
Antilles("N.A.")
Nieuw Amsterdam N.A. 1983 1983 1,214 33,930 704/89 Alaska, Caribbean
Rotterdam N.A. 1959 1959 1,075 37,783 749/94 Alaska, Hawaii
-------
Total HAL Ships Capacity........................ 8,795
-------
WINDSTAR CRUISES
- ----------------
Wind Spirit Bahamas 1988 1988 148 5,736 440/52 Caribbean,
Mediterranean
Wind Song Bahamas 1987 1987 148 5,703 440/52 South Pacific
Wind Star Bahamas 1986 1986 148 5,703 440/52 Caribbean,
------- Mediterranean
Total Windstar Ships Capacity.................. 444
-------
TOTAL CAPACITY.................................... 23,995
=======
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* In accordance with industry practice passenger capacity is calculated based
on two passengers per cabin even though some cabins can accommodate three or
four passengers.
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CRUISE SHIP CONSTRUCTIONS
The Company is currently constructing six cruise ships to be operated under
the Carnival name and two cruise ships to be operated under the Holland America
Line name. The following table presents summary information concerning ships
under construction:
LENGTH
EXPECTED PAX AND APPROXIMATE
VESSEL DELIVERY SHIPYARD CAP TONS WIDTH COST
- ------ -------- -------- --- ---- ----- ----
(000's)
CARNIVAL CRUISE LINES
- ---------------------
Imagination June 1995 Masa-Yards 2,040 70,367 855/104 $ 330,000
Inspiration March 1996 Masa-Yards 2,040 70,367 855/104 270,000
To Be Named September 1996 Fincantieri 2,640 101,000 886/116 400,000
To Be Named February 1998 Masa-Yards 2,040 70,367 855/104 300,000
To Be Named November 1998 Masa-Yards 2,040 70,367 855/104 300,000
To Be Named December 1998 Fincantieri 2,640 101,000 886/116 415,000
------- -----------
Total Carnival Ships Capacity 13,440 2,015,000
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HOLLAND AMERICA LINE
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Veendam June 1996 Fincantieri 1,266 55,451 720/101 225,000
To Be Named September 1997 Fincantieri 1,320 62,000 776/106 235,000
------- ------------
Total HAL Ships Capacity 2,586 460,000
------- ------------
TOTAL 16,026 $2,475,000
====== ==========
OTHER CRUISE ACTIVITIES
In April 1992, the Company finalized an agreement to acquire up to 50% of a
joint venture company ("Seabourn") which had been set up to acquire the cruise
operations of K/S Seabourn Cruise Line. The Company's investment in Seabourn
is in the form of two subordinated secured ten-year loans of $15 million and
$10 million, respectively. In return for providing Seabourn with sales and
marketing support, the Company received a 25% equity interest. The $10 million
note is convertible at any time prior to maturity into an additional 25%
interest, and in certain instances will automatically convert into an
additional 25% interest, in Seabourn. Seabourn operates two ultra-luxury
ships, which have an aggregate capacity of 408 passengers and have itineraries
in the Caribbean, the Baltic, the Mediterranean and the Far East.
In September 1993 the Company acquired a 16.6% equity interest in Epirotiki
Lines , a Greece based operator of eight cruise ships with an aggregate
capacity of approximately 5,200 passengers, in exchange for the cruise ship
Mardi Gras. In March 1994 the Company acquired an additional 26.4% equity
interest, bringing its total ownership interest to 43%, in exchange for the
cruise ship FiestaMarina. In February 1995, the Epirotiki venture reorganized
which resulted in the Company obtaining an additional 6% interest for a total
ownership of 49%. The Greece-based company operates its eight cruise ships
primarily on itineraries in the Aegean and Eastern Mediterranean Seas.
In October 1993, Carnival Cruise Lines' Carnivale was renamed the
FiestaMarina and began service with FiestaMarina Cruises, a division of
Carnival catering to the Latin America and Spanish speaking U.S. markets,
departing from San Juan, Puerto Rico and LaGuaira/Caracas, Venezuela for 3-, 4-
and 7-day cruises. In September 1994, this product was discontinued as the
depth of the market could not support the size of the vessel. The vessel,
which was under charter, was returned to Epirotiki Lines.
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CRUISE TARIFFS
Unless otherwise noted, brochure prices include round trip airfare from
over 175 cities in the United States and Canada. If a passenger chooses not
to have the Company provide air transportation, the ticket price is reduced.
Brochure prices vary depending on size and location of cabin, the time of year
that the voyage takes place, and when the booking is made. The cruise brochure
price includes a wide variety of activities and facilities, such as a fully
equipped casino, nightclubs, theatrical shows, movies, parties, a discotheque,
a health club and swimming pools on each ship. The brochure price also
includes numerous dining opportunities daily.
Brochure pricing information below is per person based on double occupancy:
AREA OF OPERATION CRUISE LENGTH PRICE RANGE
----------------- ------------- -----------
CARNIVAL CRUISE LINES
Caribbean 3-day $549--$1,169
4-day 649--1,329
7-day 1,399--2,429
Mexico 3-day 549--1,169
4-day 649--1,329
7-day 1,399--2,429
HOLLAND AMERICA LINE (1)
Alaska 3-day $ 504--3,094
4-day 728-- 4,468
7-day 1,120--6,875
Caribbean 7-day 1,495--5,200
10-day 2,135--7,240
Europe 10- to 12-day 3,240--13,345
Panama Canal 10- to 22-day 2,185--14,840
WINDSTAR CRUISES (1)
Caribbean 7-day $2,995--$3,195
Mediterranean 7- to 16-day 3,895--6,695
South Pacific 7-day 2,995--3,195
- -----------------------------------------------------
(1) Prices represent cruise only
- -----------------------------------------------------
Brochure prices are regularly discounted through the Company's early
booking discount program and other promotions.
ON-BOARD AND OTHER REVENUES
The Company derives revenues from certain on-board activities and services
including casino gaming, liquor sales, gift shop sales, shore tours,
photography and promotional advertising by merchants located in ports of call.
The casinos, which contain slot machines and gaming tables including
blackjack, craps, roulette and stud poker are open when the ships are at sea
in international waters. The Company also earns revenue from the sale of
alcoholic beverages. Certain onboard activities are managed by independent
concessionaires from which the Company collects a percentage of revenues, while
certain others are managed by the Company.
The Company receives additional revenue from the sale to its passengers of
shore excursions at each ship's ports of call. On the Carnival Ships, such
shore excursions are operated by independent tour operators and include bus and
taxi sight-seeing excursions, local boat and beach parties, and nightclub and
casino visits. On the HAL Ships, shore excursions are operated by Holland
America Westours and independent parties.
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In conjunction with its cruise vacations on the Carnival Ships, the Company
sells pre- and post-cruise land packages. Such packages generally include one,
two or three-night vacations at locations such as Walt Disney World in Orlando,
Florida or resorts in the South Florida and the San Juan Puerto Rico areas.
In conjunction with its cruise vacations on the HAL Ships, HAL sells
pre-cruise and post-cruise land packages which are more fully described below.
(See "Item 1. Business - Tour Segment")
PASSENGERS
The following table sets forth the aggregate number of passengers carried
and percentage occupancy for the Company's ships for the periods indicated:
FISCAL YEAR ENDED NOVEMBER 30,
1994 1993 1992
---- ---- ----
Number of Passengers 1,354,000 1,154,000 1,153,000
Occupancy Percentage* 104.0% 105.3% 105.3%
- -----------------------------------------
* In accordance with industry practice, total capacity is calculated based
on two passengers per cabin even though some cabins can accommodate three or
four passengers. Occupancy percentages in excess of 100% indicate that more
than two passengers occupied some cabins.
- -----------------------------------------
The following table sets forth the actual occupancy percentage for all
cruises on the Company's ships during each quarter for the fiscal years ended
November 30, 1993 and November 30, 1994:
OCCUPANCY
QUARTER ENDING PERCENTAGE
-------------- ----------
February 28, 1993 100.9%
May 31, 1993 104.2
August 31, 1993 114.3
November 30, 1993 100.9
February 28, 1994 100.2
May 31, 1994 101.2
August 31, 1994 113.4
November 30, 1994 100.9
SALES AND MARKETING
The Company markets the Carnival Ships as the "Fun Ships(R)" and uses the
themes "Carnival's Got the Fun(R)" and "The Most Popular Cruise Line in the
World(R)", among others.
Carnival advertises nationally directly to consumers on network television
and through extensive print media featuring its spokesperson, Kathie Lee
Gifford. Carnival believes its advertising generates interest in cruise
vacations generally and results in a higher degree of consumer awareness of the
"Fun Ships(R)" concept and the "Carnival(R)" name. Substantially all of
Carnival's cruise bookings are made through travel agents, which arrangement is
encouraged as a matter of policy. In fiscal 1994, Carnival took reservations
from about 28,000 of approximately 45,000 travel agencies in the United States
and Canada. Travel agents receive a standard commission of 10% (15% in the
State of Florida), plus the potential of an additional commission based on
sales volume. Moreover, because cruise vacations are substantially
all-inclusive, sales of Carnival cruise vacations yield a significantly higher
commission to travel agents than selling air tickets and hotel rooms. During
fiscal 1994, no one travel agency accounted for more than 2% of Carnival's
revenues.
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Carnival engages in substantial promotional efforts designed to motivate
and educate retail travel agents about its "Fun Ships(R)" cruise vacations.
Carnival employs approximately 90 field sales representatives and 40 in-house
service representatives to motivate independent travel agents and promote its
cruises. Carnival believes it has the largest sales force in the industry.
To facilitate access and to simplify the reservation process, Carnival
employs approximately 290 reservation agents to take bookings from independent
travel agents. Carnival's fully-automated reservation system allows its
reservation agents to respond quickly to book cabins on its ships. Carnival
has a policy of pricing comparable cabins (based on size, location and length
of voyage) on its various ships at the same rate ("common rating"). Such
common rate includes round-trip airfare, which means that any passenger can fly
from any one of over 175 cities in the United States and Canada to ports of
embarkation for the same price. By common rating, Carnival is able to offer
customers a wider variety of voyages for the same price, which the Company
believes improves occupancy on all its cruises.
Carnival's cruises generally are substantially booked several months in
advance of the sailing date. This lead time allows Carnival to adjust its
prices, if necessary, in relation to demand for available cabins, as indicated
by the level of advance bookings. During late fiscal 1992, Carnival decided to
introduce its SuperSaver fares at an earlier stage of the booking process to
promote effective yield management and to encourage potential passengers to
book cruise reservations earlier. Carnival's payment terms require that a
passenger pay approximately 15% of the cruise price within 7 days of the
reservation date and the balance not later than 45 days before the sailing date
for 3- and 4-day cruises and 60 days before the sailing date for 7-day cruises.
Carnival believes that its success is due in large part to its unique
product positioning within the industry. Carnival markets the Carnival Ship
cruises not only as alternatives to competitors' cruises, but as vacation
alternatives to land-based resorts and sight-seeing destinations. Carnival
seeks to attract passengers from the broad vacation market, including those who
have never been on a cruise ship before and who might not otherwise consider a
cruise as a vacation alternative. Carnival's strategy has been to emphasize the
cruise experience itself rather than particular destinations, as well as the
advantages of a prepaid, all-inclusive vacation package. Carnival markets the
Carnival Ship cruises as the "Fun Ships(R)" experience, which includes a wide
variety of shipboard activities and entertainment, such as full-scale casinos
and nightclubs, an atmosphere of pampered service and unlimited food.
The Company's product positioning stems from its belief that the cruise
market is actually comprised of three primary segments with different passenger
demographics and, therefore, different passenger requirements and growth
characteristics. These three segments are the contemporary, premium and luxury
specialty segments. The luxury specialty segment, which is not as large as the
other segments, is served by cruises with per diems of $300 or higher. The
premium segment typically is served by cruises that last for 7 to 14 days or
more at per diem rates of $250 or higher, and appeal principally to more
affluent customers. Passengers that travel on cruises serving the luxury
specialty and premium segments typically have previously been on a cruise ship,
and marketing efforts in these segments are geared toward reaching these
experienced cruise passengers. The contemporary segment, on the other hand, is
served typically by cruises that are 7 days or shorter in length, are priced at
per diem rates of $200 or less, and feature a casual ambience. Because cruises
serving the contemporary segment are more affordable, require less time and are
more casual in nature, they appeal to passengers of all ages and income
categories. The primary market for the contemporary segment is the first time
cruise passenger (only an estimated 7% of the North American population has
ever cruised). The Company believes that the success and growth of the
Carnival cruises are attributable in large part to its early recognition of
this market segmentation and its efforts to reach and promote the expansion of
the contemporary segment.
The HAL and Windstar Ships cater to the premium and luxury specialty
markets, respectively. The Company believes that the hallmarks of the HAL
experience are beautiful ships and gracious attentive service. HAL
communicates this difference as "A Tradition of Excellence(R)", a reference to
its long standing reputation as a first class and grand cruise line.
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Substantially all of HAL's bookings are made through travel agents, which
arrangement HAL encourages as a matter of policy. In fiscal 1994, HAL took
reservations from about 20,000 of approximately 45,000 travel agencies in the
U.S. and Canada. Travel agents receive a standard commission of between 10%
and 15%, depending on the specific cruise product sold, with the potential for
override commissions based upon sales volume. During 1994, no one travel
agency accounted for more than 1% of HAL's total revenue.
HAL has focused much of its recent sales effort at creating an excellent
relationship with the travel agency community. This is related to the HAL
marketing philosophy that travel agents have a large impact on the consumer
cruise selection process, and will recommend HAL more often because of its
excellent reputation for service to both consumers and independent travel
agents. HAL solicits continuous feedback from consumers and the independent
travel agents making bookings with HAL to insure they are receiving excellent
service.
HAL's marketing communication strategy is primarily composed of newspaper
and magazine advertising, large scale brochure distribution and direct mail
solicitations to past passengers (referred to as "alumni") and cable
television. HAL engages in substantial promotional efforts designed to
motivate and educate retail travel agents about its products. HAL employs
approximately 50 field sales representatives and 30 in-house sales
representatives to support the field sales force. Carnival's approximate 90
field sales representatives also promote HAL products. To facilitate access to
HAL and to simplify the reservation process for the HAL ships, HAL employs
approximately 220 reservation agents to take bookings from travel agents.
HAL's cruises generally are booked several months in advance of the sailing
date. The Company solicits current and former passengers of the Carnival Ships
to take future cruises on the HAL and Windstar Ships.
Windstar Cruises has its own marketing and reservations staff. Field sales
representatives for both HAL and Carnival act as field sales representatives
for Windstar. Marketing efforts are primarily devoted to a) travel agent
support and awareness, b) direct mail solicitation of past passengers, and c)
distribution of brochures.
The marketing features the distinctive nature of the graceful, modern sail
ships and the distinctive "casually elegant" experience on "intimate
itineraries" (apart from the normal cruise experience). Windstar's cruise
market positioning is embodied in the phrase "180 degrees from ordinary".
SEASONALITY
The Company's revenue from the sale of passenger tickets for the Carnival
Ships is moderately seasonal. Historically, demand for Carnival cruises has
been greater during the periods from late December through April and late June
through August. Demand traditionally is lower during the period from September
through mid-December and during May. To allow for full availability during
peak periods, drydocking maintenance is usually performed in September, October
and early December. HAL cruise revenues are more seasonal than Carnival's
cruise revenues. Demand for HAL cruises is strongest during the summer months
when HAL ships operate in Alaska and Europe. Demand for HAL cruises is lower
during the winter months when HAL ships sail in more competitive markets.
COMPETITION
Cruise lines compete for consumer disposable leisure time dollars with
other vacation alternatives such as land-based resort hotels and sight-seeing
destinations, and public demand for such activities is influenced by general
economic conditions.
The Carnival Ships compete with cruise ships operated by seven different
cruise lines which operate year round from Florida and California with similar
itineraries and with seven other cruise lines operating seasonally from other
Florida and California ports, including cruise ships operated by HAL.
Competition for cruise passengers in South Florida is substantial. Ships
operated by Royal Caribbean Cruise Lines and Norwegian Cruise Lines sail
regularly from Miami on itineraries similar to those of the Carnival Ships.
Carnival competes year round with ships operated by Royal Caribbean Cruise
Lines and Princess Cruises embarking from Los Angeles to the west coast of
Mexico. Cruise lines such as Norwegian Cruise Lines, Royal Caribbean Cruise
Lines, Costa Cruises, Cunard and Princess Cruise Lines offer voyages competing
with Carnival from San Juan to the Caribbean.
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In the Alaska market, HAL competes directly with cruise ships operated by
seven different cruise lines with the largest competitors being Princess Cruise
Lines and Regency Cruises, Inc. Over the past several years, there has been a
steady increase in the available capacity among all cruise lines in the Alaska
market.
The Alaska market is divided into two areas: southeast Alaska and the Gulf
of Alaska. In the southeast Alaska market, HAL's primary competitor is
Princess Cruise Lines. In the Gulf of Alaska market, HAL's primary competitors
are Princess Cruise Lines and Regency Cruises, Inc.
In the Caribbean market, HAL competes with cruise ships operated by 14
different cruise lines, its primary competitors being Princess Cruise Lines,
Royal Caribbean Cruise Lines and Norwegian Cruise Line, as well as the Carnival
Ships. In 1989, the Company began introducing a number of new itineraries
which reduces the extent to which HAL competes directly with the Carnival
Ships.
GOVERNMENTAL REGULATION
The Ecstasy, Fantasy, Jubilee, Celebration and Tropicale are Liberian
flagged ships, the Sensation and Fascination are Panamanian flagged ships, and
the balance of the Carnival Ships are registered in the Bahamas. The Ryndam,
Maasdam, Statendam and Westerdam are registered in the Bahamas, while the
balance of the HAL Ships are flagged in the Netherlands Antilles. The Windstar
Ships are registered in the Bahamas. The ships are subject to inspection by
the United States Coast Guard for compliance with the Convention for the Safety
of Life at Sea and by the United States Public Health Service for sanitary
standards. The Company is also regulated by the Federal Maritime Commission,
which, among other things, certifies ships on the basis of the ability of the
Company to meet obligations to passengers for refunds in case of
non-performance. The Company believes it is in compliance with all material
regulations applicable to its ships and has all licenses necessary to the
conduct of its business. In connection with a significant portion of its
Alaska cruise operations, HAL relies on a concession permit from the National
Park Service to operate its cruise ships in Glacier Bay National Park, which is
periodically renewed. There can be no assurance that the permits will continue
to be renewed or that regulations relating to the renewal of such permits,
including preference rights, will remain unchanged in the future.
The International Maritime Organization has adopted safety standards as
part of the "Safety of Life at Sea" ("SOLAS") Convention, applicable generally
to all passenger ships carrying 36 or more passengers. Generally, SOLAS
imposes enhanced vessel structural requirements designed to improve passenger
safety. The SOLAS requirements are phased in through the year 2010. However,
certain stringent SOLAS fire safety requirements must be implemented by 1997.
Only two of the Company's vessels, Carnival's Festivale, and HAL's Rotterdam
are expected to be affected by the SOLAS 1997 requirements which will not
result in material costs to the Company.
From time to time various other regulatory and legislative changes have
been or may in the future be proposed that could have an effect on the cruise
industry in general.
FINANCIAL INFORMATION
For financial information about the Company's cruise ship segment with
respect to the three fiscal years ended November 30, 1994, see Note 11 "Segment
Information" to the Company's Consolidated Financial Statements as of November
30, 1994 in the Company's 1994 annual report on page 29 incorporated by
reference into this document.
C. TOUR SEGMENT
In addition to its cruise business, HAL markets sight-seeing tours
separately and as a part of cruise/tour packages under the Holland America
Westours name. Tour operations are based in Alaska, Washington State and
western Canada. Since a substantial portion of Holland America Westours'
business is derived from the sale of tour packages in Alaska during the summer
tour season, tour operations are highly seasonal.
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HOLLAND AMERICA WESTOURS
Holland America Line-Westours Inc. ("Holland America Westours") is a
wholly-owned subsidiary of HAL. The group of subsidiaries which together
comprise the tour operations perform three independent yet interrelated
functions. During 1994, as part of an integrated travel program to
destinations in Alaska and the Canadian Rockies, the tour service group offered
62 different tour programs varying in length from 6 to 23 days. The
transportation group and hotel group support the tour service group by
supplying facilities needed to conduct tours. Facilities include dayboats,
motor coaches, rail cars and hotels.
Four luxury dayboats perform an important role in the integrated Alaska
travel program offering tours to the glaciers and fjords of Alaska and the
Yukon River. The Fairweather cruises the Lynn Canal in Southeast Alaska and
the Glacier Queen II cruises to the Columbia Glacier near Valdez, Alaska. The
third dayboat, the Yukon Queen, cruises the Yukon River between Dawson City,
Yukon Territory and Eagle, Alaska. A fourth dayboat, the Ptarmigan, operates
on Portage Lake in Alaska. The four dayboats have a combined capacity of 696
passengers.
A fleet of over 290 motor coaches using the trade name Gray Line operate in
Alaska, Washington and western Canada. These motor coaches are used for
extended trips, city sight-seeing tours and charter hire. HAL conducts its
tours both as part of a cruise/tour package and as individual sight-seeing
products sold under the Gray Line name. In addition, HAL operates express Gray
Line motor coach service between downtown Seattle and the Seattle-Tacoma
International Airport.
Ten private domed rail cars, which are called "McKinley Explorers", run on
the Alaska railroad between Anchorage and Fairbanks, stopping at Denali
National Park.
In connection with its tour operations, HAL owns or leases motor coach
maintenance shops in Seattle, and at Juneau, Fairbanks, Anchorage, Skagway and
Ketchikan in Alaska. HAL also owns or leases service offices at Anchorage,
Fairbanks, Juneau, Ketchikan and Skagway in Alaska, at Whitehorse in the Yukon
Territory, in Seattle and at Vancouver in British Columbia. Certain real
property facilities on federal land are used in HAL's tour operations pursuant
to permits from the applicable federal agencies.
WESTMARK HOTELS
HAL owns and/or operates 16 hotels in Alaska and the Canadian Yukon under
the name Westmark Hotels. Four of the hotels are located in Canada's Yukon
Territory and offer a combined total of 585 rooms. The remaining 12 hotels,
all located throughout Alaska, provide a total of 1,650 rooms, bringing the
total number of hotel rooms to 2,235.
The hotels play an important role in HAL's tour program during the summer
months when they provide accommodations to the tour passengers. The hotels
located in the larger metropolitan areas remain open during the entire year,
acting during the winter season as centers for local community activities while
continuing to accommodate the travelling public. HAL hotels include dining,
lounge and conference or meeting room facilities. Certain hotels have gift
shops and other tourist services on the premises.
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The hotels are summarized in the following table:
OPEN DURING
HOTEL NAME LOCATION ROOMS 1994 SEASON
- ---------- -------- ----- ------------
Alaska Hotels:
Westmark Anchorage Anchorage 198 year-round
Westmark Inn Anchorage 90 seasonal
Westmark Inn Fairbanks 173 seasonal
Westmark Fairbanks Fairbanks 238 year-round
Westmark Juneau Juneau 105 year-round
The Baranof Juneau 194 year-round
Westmark Cape Fox Ketchikan 72 year-round
Westmark Kodiak Kodiak 81 year-round
Westmark Shee Atika Sitka 101 year-round
Westmark Inn Skagway Skagway 209 seasonal
Westmark Tok Tok 92 seasonal
Westmark Valdez Valdez 97 year-round
Canadian Hotels (Yukon Territory):
Westmark Inn Beaver Creek 174 seasonal
Westmark Klondike Inn Whitehorse 99 seasonal
Westmark Whitehorse Whitehorse 181 year-round
Westmark Inn Dawson 131 seasonal
Thirteen of the hotels are owned by a HAL subsidiary. The remaining three
hotels, Westmark Anchorage, Westmark Cape Fox and Westmark Shee Atika are
operated under arrangements involving third parties such as management
agreements and leases.
For the hotels that operate year-round, the occupancy percentage for 1994
was 61.1%, and for the hotels that operate only during the summer months, the
occupancy percentage for 1994 was 76.9%.
SEASONALITY
The Company's tour revenues are extremely seasonal with a large majority
generated during the late spring and summer months in connection with the
Alaska cruise season. Holland America Westours' tours are conducted in
Washington, Alaska and the Canadian Rockies. The Alaska and Canadian Rockies
tours coincide to a great extent with the Alaska cruise season, May through
September. Washington tours are conducted year-round although demand is
greatest during the summer months. During periods in which tour demand is low,
HAL seeks to maximize its motor coach charter activity such as operating
charter tours to ski resorts in Washington and Canada.
SALES AND MARKETING
HAL tours are marketed both separately and as part of cruise-tour packages.
Although most HAL cruise-tours include a HAL cruise as the cruise segment,
other cruise lines also market HAL tours as a part of their cruise tour
packages and sight-seeing excursions. Tours sold separately are marketed
through independent travel agents and also directly by HAL, utilizing sales
desks in major hotels. General marketing for the hotels is done through
various media in Alaska, Canada and the continental United States. Travel
agents, particularly in Alaska, are solicited, and displays are used in
airports in Seattle, Washington, Portland, Oregon and various Alaskan cities.
Rates at Westmark Hotels are on the upper end of the scale for hotels in Alaska
and the Canadian Yukon.
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CONCESSIONS
Certain tours in Alaska are conducted on federal property requiring
concession permits from the applicable federal agencies such as the National
Park Service or the United States Forest Service.
COMPETITION
Holland America Westours competes with independent tour operators and motor
coach charter operators in Washington, Alaska and the Canadian Rockies. The
primary competitors in Alaska are Princess Tours (which owns approximately 120
motor coaches and three hotels) and Alaska Sightseeing/Trav-Alaska (which owns
approximately 40 motor coaches). The primary competitor in Washington is
Gazelle (with approximately 15 motor coaches). The primary competitors in the
Canadian Rockies are Tauck Tours, Princess Tours and Brewster Transportation.
Westmark Hotels compete with various hotels throughout Alaska, including
the Super 8 national motel chain, many of which charge prices below those
charged by HAL. Dining facilities in the hotels also compete with the many
restaurants in the same geographic areas.
GOVERNMENT REGULATION
HAL's motor coach operations are subject to regulation both at the federal
and state levels, including primarily the Interstate Commerce Commission, the
U.S. Department of Transportation, the Washington Utilities and Transportation
Commission, the British Columbia Motor Carrier Commission and the Alaska
Transportation Commission. Certain of HAL's tours involve federal properties
and are subject to regulation by various federal agencies such as the National
Park Service, the Federal Maritime Administration and the U.S. Forest Service.
In connection with the operation of its beverage facilities in the Westmark
Hotels, HAL is required to comply with state, county and/or city ordinances
regulating the sale and consumption of alcoholic beverages. Violations of
these ordinances could result in fines, suspensions or revocation of such
licenses and preclude the sale of any alcoholic beverages by the hotel
involved.
In the operation of its hotels, HAL is required to comply with applicable
building and fire codes. Changes in these codes have in the past and may in
the future, require substantial capital expenditures to insure continuing
compliance such as the installation of sprinkler systems.
FINANCIAL INFORMATION
For financial information about the Company's tour segment with respect to
the three fiscal years ended November 30, 1994, see Note 11 "Segment
Information" to the Company's Consolidated Financial Statements as of November
30, 1994 in the Company's 1994 annual report incorporated by reference into
this document.
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D. EMPLOYEES
The Company's Carnival operations have approximately 1,300 full-time and
100 part-time employees engaged in shoreside operations. Carnival also employs
approximately 330 officers and approximately 6,300 crew and staff on the
Carnival Ships.
The Company's HAL operations have approximately 3,600 employees engaged in
shoreside, tour and hotel operations, of which approximately 2,100 employees
hold part-time/seasonal positions. HAL also employs approximately 220 officers
and approximately 3,300 crew and staff on the HAL Ships and Windstar Ships.
Due to the seasonality of its Alaska and Canadian operations, HAL tends to
increase its work force during the summer months, employing significant
additional full-time and part-time personnel. HAL has entered into agreements
with unions covering employees in certain of its hotels and certain of its tour
and ship employees.
The Company considers its employee relations generally to be good.
E. SUPPLIERS
The Company's largest purchases are for airfare, advertising, fuel, food
and related items, hotel supplies and products related to passenger
accommodation. Although the Company chooses to use a limited number of
suppliers for most of its food and fuel purchases, most of the necessary
supplies are available from numerous sources at competitive prices. The use of
a limited number of suppliers enables the Company to obtain volume discounts.
F. INSURANCE
The Company maintains insurance covering legal liabilities related to crew,
passengers and other third parties on the Carnival Ships and the HAL Ships in
operation through The Standard Steamship Owners Protection & Indemnity
Association (Bermuda) Limited (the "SSOPIA") and the Steamship Mutual
Underwriting Association Ltd. (the "SMUAL"). The amount and terms of these
insurances are governed by the rules of the foregoing associations.
The Company currently 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. This coverage includes
legal liability to crew and passengers including terrorist risks for which
coverage would be excluded from SSOPIA or SMUAL. The coverage for hull and
machinery and war risks is effected with international markets, including
underwriters at Lloyds. The Company, as required by the Federal Maritime
Commission, maintains at all times two $15 million performance bonds for the
Carnival Ships, and the HAL and Windstar Ships, respectively, to cover
passenger ticket liabilities in the event of a cancelled or interrupted cruise.
The Company maintains certain levels of self insurance for liabilities and
hull and machinery through the use of substantial deductibles. Such
deductibles may be increased in the future.
The Company also maintains various insurance policies to protect the
assets, earnings and liabilities arising from the operation of HAL Westours, as
well as land based insurance for the Company.
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ITEM 2. PROPERTIES
The Company's cruise ships are described in Section B of Item 1 under the
heading "Cruise Ship Segment". The properties associated with HAL's tour
operations are described in Section C of Item 1 under the heading "Tour
Segment".
Carnival's shoreside operations and corporate headquarters are located at
3655 N.W. 87th Avenue, Miami, Florida, and consists of approximately 231,000
square feet of office space which the Company leased until it purchased it in
December 1994. In order to provide space for the future growth of Carnival and
to consolidate existing personnel, approximately 225,000 square feet of office
space is being constructed next to the existing facility with an estimated
completion date of September 1996. Carnival is also leasing approximately
60,000 square feet of office space at 5225 N.W. 87th Avenue, Miami, Florida
until the new facility is completed.
HAL headquarters are at 300 Elliott Avenue West in Seattle, Washington in
leased space in an office building. The lease is for approximately 119,000
square feet.
ITEM 3. LEGAL PROCEEDINGS
In 1986, a lawsuit was filed by the American Association of Cruise
Passengers ("AACP") against Carnival Corporation, Holland America
Line-Westours, Inc. and ten other cruise lines and an association of travel
agents seeking treble and punitive damages, alleging violation of federal and
state antitrust laws and interference with business expectancies under state
common law. The amount of damages sought is not specified in the complaint and
has not been revealed in discovery to date. AACP has asserted that the
defendants have agreed with each other to boycott AACP because of AACP's
practice of rebating travel agency commissions to passengers and advertising
discounts on such cruise lines' advertised fares. The Company is contesting
the case vigorously and is seeking dismissal as to Carnival Corporation on
jurisdictional grounds, pursuant to prior Court of Appeals rulings. In
addition, these rulings have significantly limited the total amount of damages
recoverable even if liability of one or more of the cruise lines is found.
Based on the current status of the proceedings, 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.
The Company is routinely involved in liability and other claims typical of
the cruise ship, hotel and tour businesses. After the application of
deductibles, a substantial portion of these claims are fully covered by
insurance. The Company is also involved from time to time in commercial,
regulatory and employment related disputes and claims. In the opinion of
management, such claims, if decided adversely, individually or in the
aggregate, would not have a material adverse effect upon the Company's
financial condition or results of operations..
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OR SECURITY HOLDERS
None.
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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 1 of this report.
The following table sets forth the name, age and title of each executive
officer. Titles listed relate to positions within Carnival Corporation unless
otherwise noted.
NAME AGE POSITION
---- --- --------
Micky Arison 45 Chairman of the Board and Chief Executive Officer
Gerald R. Cahill 43 Vice President--Finance
Robert H. Dickinson 52 President and Chief Operating Officer
of Carnival and Director
Howard S. Frank 53 Vice-Chairman, Chief Financial Officer and Director
A. Kirk Lanterman 63 President and Chief Executive Officer of Holland
America Line-Westours Inc. and Director
Lowell Zemnick 51 Vice President and Treasurer
Meshulam Zonis 61 Senior Vice President--Operations of Carnival and
Director
BUSINESS EXPERIENCE OF OFFICERS
Micky Arison, age 45, has been Chief Executive Officer since 1979 and
Chairman of the Board 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 Corporations's founder. He served on the Board of Directors of Ensign
Bank, FSB until August 30, 1990. On that date, the Office of Thrift
Supervision appointed the Resolution Trust Corporation receiver of Ensign Bank.
.
Gerald Cahill, age 43, is a Certified Public Accountant and has been Vice
President-Finance since September 1994. Mr. Cahill 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 Price
Waterhouse LLP.
Robert H. Dickinson, age 52, 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.
Howard S. Frank, age 53, has been Vice-Chairman of the Board since October
1993 and has been Chief Financial Officer and Chief Accounting Officer since
July 1, 1989 and a Director since 1992. From July 1989 to October 1993 he was
Senior Vice President- Finance. From July 1975 through June 1989, he was a
partner with Price Waterhouse LLP.
A. Kirk Lanterman, age 63, is a Certified Public Accountant and has been
President and Chief Executive Officer of Holland America Line-Westours Inc.
since January 1989 and a Director since 1992. From 1983 to January 1989, he
was President and Chief Operating Officer of Holland America Line-Westours Inc.
From 1979 to 1983, he was President of Westours which merged in 1983 with
Holland America Line.
Lowell Zemnick, age 51, is a Certified Public Accountant and has been Vice
President since 1980 and Treasurer since September 1990. Mr. Zemnick 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, age 61, has been Senior Vice President--Operations of
Carnival since 1979. He has also been a director since June 1987. From 1974
through 1979, Mr. Zonis was Vice President--Operations of Carnival.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDERS MATTERS
A. MARKET INFORMATION
The information required by Item 5(a), market information, which appears on
page 36 of the Carnival Corporation 1994 Annual Report to Shareholders, is
incorporated by reference into this Form 10-K Annual Report.
B. HOLDERS
The information required by Item 5(b), holders of common stock, which
appears on page 36 of the Carnival Corporation 1994 Annual Report to
Shareholders, is incorporated by reference into this Form 10-K Annual Report.
C. DIVIDENDS
The Company declared cash dividends, restated to reflect the stock
split effective November 30, 1994, of $.07 per share in each quarter of fiscal
1993, $.07 per share in each of the first three fiscal quarters of 1994, $.075
in the fourth quarter of fiscal 1994 and $.075 per share in the first quarter
of 1995. Payment of future quarterly dividends will depend, among other
factors, upon the Company's earnings, financial condition and capital
requirements and certain tax considerations of certain members of the Arison
family and trusts for the benefit of Mr. Ted Arison's children (the "Principal
Shareholders"), some of whom are required to include a portion of the Company's
earnings in their taxable income, whether or not the earnings are distributed
(see "D. Taxation of the Company"). The Company may also declare special
dividends to all shareholders in the event that the Principal Shareholders are
required to pay additional income taxes by reason of their ownership of the
Common Stock, either because of an income tax audit of the Company or the
Principal Shareholders or because of certain actions by the Company (such as a
failure by the Company to maintain its investment in shipping assets at a
certain level) that would trigger adverse tax consequences to the Principal
Shareholders under the special tax rules applicable to them.
Any dividend declared by the Board of Directors on the Company's Common
Stock will be paid concurrently at the same rate on the Class A Common Stock
and the Class B Common Stock.
While no tax treaty currently exists between the Republic of Panama and the
United States, under current law the Company believes that distributions to its
shareholders are not subject to taxation under the laws of the Republic of
Panama. Dividends paid by the Company will be taxable as ordinary income for
United States Federal income tax purposes to the extent of the Company's
current or accumulated earnings and profits, but generally will not qualify for
any dividends-received deduction.
Certain loan documents entered into by certain of HAL's subsidiaries
restrict the level of dividend payments by HAL's subsidiaries to HAL.
The payment and amount of any dividend is within the discretion of the
Board of Directors, and it is possible that the amount of any dividend may vary
from the levels discussed above. If the law regarding the taxation of the
Company's income to the Principal Shareholders were to change so that the
amount of tax payable by the Principal Shareholders were increased or reduced,
the amount of dividends paid by the Company might be more or less than is
currently contemplated.
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D. TAXATION OF THE COMPANY
The following discussion summarizes the expected United States Federal
income taxation of the Company's current operations. State and local taxes are
not discussed. The discussion is based upon currently existing provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), existing and
proposed regulations thereunder and current administrative rulings and court
decisions. All of the foregoing are subject to change and any such change
could affect the continuing validity of this discussion. In connection with
the foregoing, investors should be aware that the Tax Reform Act of 1986
(hereinafter, the "1986 Tax Act") changed significantly the United States
Federal income tax rules applicable to the Company and certain holders of its
stock (including the Principal U.S. Shareholders). Although the relevant
provisions of the 1986 Tax Act are discussed herein, they have not yet been the
subject of extensive administrative or judicial interpretation.
UNITED STATES
Carnival Corporation is a Panamanian corporation, and its material
subsidiaries (other than subsidiaries engaged in the bus, hotel and tour
business of Holland America Line) are Liberian, Netherlands Antilles, British
Virgin Islands, and Bahamian corporations. Accordingly, the Company's income
from sources outside of the United States ("foreign source income") generally
is not subject to United States tax. Moreover, the Company anticipates that,
under current law, all or virtually all of its income from sources within the
United States ("United States Source Income") that constitutes Shipping Income
(as defined below) will be exempt from United States corporate income taxation
for as long as Carnival Corporation and its subsidiaries meet the requirements
of Section 883 of the Code. Section 883 of the Code provides that income of a
foreign corporation derived from the international operation, or from the
rental on a full or bareboat basis, of ships ("Shipping Income") is exempt from
United States taxation if (1) the foreign country in which the foreign
corporation is organized grants an equivalent exemption to citizens of the
United States and to corporations organized in the United States (an
"equivalent exemption jurisdiction") and (2) the foreign corporation is a
controlled foreign corporation ("CFC") as defined in Section 957(a) of the Code
(the "CFC Test"). The Company believes that substantially all of its United
States Source Income other than Holland America Line's income from its bus,
hotel and tour operations, currently qualifies as Shipping Income, and that
Panama, the Netherlands Antilles, the British Virgin Islands, the Bahamas, and
Liberia are equivalent exemption jurisdictions. (Holland America Line's income
from its hotel and tour operations, is not Shipping Income, and, accordingly,
is subject to United States corporate income tax). If, however, Panamanian,
Netherlands Antilles, British Virgin Islands, Bahamian or Liberian law were to
change adversely, the Company would consider taking appropriate steps
(including reincorporating in another jurisdiction) so as to remain eligible
for the exemption from United States Federal income tax provided by Section 883
of the Code.
A foreign corporation is a CFC when stock representing more than 50% of
such corporation's voting power or equity value is owned (or considered as
owned) on any day of its fiscal year by United States persons who each own (or
are considered as owning) stock representing 10% or more of the corporation's
voting power ("Ten Percent Shareholders"). Stock of the Company representing
more than 50% of the total combined voting power of all classes of stock is
owned by the Micky Arison 1994 "B" Trust (the "B Trust"),which is a "United
States Person", and thus the Company meets the definition of a CFC. The B
Trust is a U.S. trust whose primary beneficiary is Micky Arison, the Company's
Chairman of the Board. Accordingly, at the corporate level, the Company
expects that virtually all of its income (with the exception of its United
States source income from the operation of transportation, hotel and tour
business of HAL) to remain exempt from United States Income taxes. The B Trust
has entered into an agreement with the Company that is designed to ensure,
except under certain limited circumstances, that stock possessing more than 50%
of the Company's voting power will be held by Ten Percent Shareholders until at
least July 1, 1997. Because the Company is a CFC, a pro rata share of the
shipping earnings of the Company, as well as certain other amounts, is
includable in the taxable income of any "Ten Percent Shareholder", as defined
above.
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A substantial portion of the Company's income will, as discussed below, be
treated as United States Source Income. If the Company were to fail to meet
the requirements of Section 883 of the Code with respect to any of its United
States Source Income (or if Section 883 of the Code were repealed), some or all
of the Company's Shipping Income that is United States Source Income would
become subject to a significant United States tax burden. Any such United
States Source Income that is considered to be "effectively connected" with the
conduct of a United States trade or business would be subject not only to
general United States Federal corporate income tax, but also to a 30% "branch
level" tax on effectively connected earnings and profits (generally, adjusted
taxable income reduced by taxes and adjusted for the amount of the Company's
earnings treated as reinvested in the Company's United States business). Any
such United States Source Income that is not considered to be effectively
connected with a United States trade or business will instead be subject to a
4% tax on United States source gross transportation income (or, possibly, to a
30% tax if any such income were considered to be 100% United States Source
Income under the rules described below, which, as discussed below, the Company
does not believe to be the case with respect to any significant portion of its
Shipping Income). The Company believes that at least a significant portion of
its United States Source Income would probably be considered to be effectively
connected with a United States trade or business for this purpose.
Under amendments to the Code enacted as part of the 1986 Tax Act, the
Company's United States Source Income will include 50% of all transportation
income (including income derived from, or in connection with, the use or
hiring, or leasing for use of a cruise ship, or the performance of services
directly related to such use) attributable to transportation that begins or
ends in the United States, and 100% of such transportation income with respect
to transportation which begins and ends in the United States. The legislative
history of these rules suggests that a cruise which begins and ends in United
States ports, but which calls on one or more foreign ports (including ports in
possessions of the United States), will be treated as transportation that
begins or ends in the United States, rather than as transportation that begins
and ends in the United States, thus resulting in no more (and, with respect to
a cruise that calls on more than one foreign port, possibly less) than 50%
United States Source Income. There are, however, no regulations or other
authoritative interpretations of these new rules, and, accordingly, the matter
is not entirely free from doubt.
Under a provision of the Technical and Miscellaneous Revenue Act of 1988,
Section 883 of the Code applies only to income derived from the international
operation of ships. The legislative history of that provision indicates that
Section 883 of the Code does not apply to Shipping Income that is treated as
100% United States Source Income under the source of income rules discussed in
the preceding paragraph since it does not constitute income from the
international operation of a ship because it results from transportation that
is considered to begin and end in the United States; accordingly, any such
income may well be subject to United States corporate tax unless another
exception were applicable. As discussed in the preceding paragraph, although
the matter is not entirely free from doubt, the Company does not believe that
any significant portion of its Shipping Income from its current operations is
100% United States Source Income under the applicable provisions of the Code.
Accordingly, the Company does not believe that the 1988 legislation
significantly increases its United States corporate tax with respect to its
current operations.
OTHER JURISDICTIONS
The Company anticipates that its income will not be subject to significant
taxation under the laws of the Republic of Panama, Liberia, the Netherlands
Antilles, the British Virgin Islands or the Bahamas.
ITEM 6. SELECTED FINANCIAL DATA
The information required by Item 6, selected financial data for the five
years ended November 30, 1994, which appears on page 35 of the Carnival
Corporation 1994 Annual Report to Shareholders, is incorporated by reference
into this Form 10-K Annual Report.
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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 Operation, which appears on pages 32 through
34 of the Carnival Corporation 1994 Annual Report to Shareholders, is
incorporated by reference into this Form 10-K Annual Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements, together with the report thereon of Price
Waterhouse LLP dated January 23, 1995, appearing on pages 20 through 31 and
supplemental data on page 36 of the Carnival Corporation 1994 Annual Report to
Shareholders are incorporated by reference into this Form 10-K Annual Report.
ITEM 9. DISAGREEMENTS 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 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 report.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1)-(2) FINANCIAL STATEMENTS AND SCHEDULES:
The list of financial statements set forth in the index on page 19 of
Registrant's 1994 Annual Report filed with the commission with this filing is
hereby incorporated herein by this reference. No financial statement schedules
are required, pursuant to SEC Release #33-7118, for filings made after December
20, 1994.
(3) EXHIBITS:
The exhibits listed on the accompanying Exhibit Index are filed or
incorporated by reference as part of this report and such Exhibit Index is
hereby incorporated herein by reference.
(b) No reports on Form 8-K were filed during the three months ended
November 30, 1994.
19
22
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 23rd day of February 1995.
CARNIVAL CORPORATION.
By /s/ Micky Arison
-------------------------------------
Micky Arison
Chairman of the Board 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, Chief February 23, 1995
-------------------------------- Executive Officer and Director
Micky Arison
/s/ Howard S. Frank Vice-Chairman, Chief Financial February 23, 1995
-------------------------------- and Accounting Officer and Director
Howard S. Frank
/s/ Maks L. Birnbach Director February 23, 1995
--------------------------------
Maks L. Birnbach
/s/ Richard G. Capen, Jr. Director February 23, 1995
--------------------------------
Richard G. Capen, Jr.
/s/ Robert H. Dickinson Director February 23, 1995
--------------------------------
Robert H. Dickinson
/s/ A. Kirk Lanterman Director February 23, 1995
--------------------------------
A. Kirk Lanterman
/s/ Harvey Levinson Director February 23, 1995
--------------------------------
Harvey Levinson
/s/ Modesto Maidique Director February 23, 1995
--------------------------------
Modesto Maidique
/s/ William S. Ruben Director February 23, 1995
--------------------------------
Willaim S. Ruben
/s/ Stuart Subotnick Director February 23, 1995
--------------------------------
Stuart Subotnick
/s/ Sherwood M. Weiser Director February 23, 1995
--------------------------------
Sherwood M. Weiser
/s/ Meshulam Zonis Director February 23, 1995
--------------------------------
Meshulam Zonis
/s/ Uzi Zucker Director February 23, 1995
--------------------------------
Uzi Zucker
20
23
INDEX TO EXHIBITS
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3.1 - Form of Amended and Restated Articles of Incorporation of the Company.(1)
3.2 - Form of By-laws of the Company.(2)
4.1 - Letter Agreement dated July 11, 1989 between the Company and the Ted Arison Irrevocable Trust.(3)
4.2 - Revolving Credit Agreement dated July 1, 1993 between the Company and Citibank N.A. and certain banks named
therein.(4)
4.3 - Indenture entered into by the Registrant and First Trust National Association, as Trustee, relating to the
4-1/2% Convertible Subordinated Notes Due July 1, 1997 and the Form of Notes.(5)
4.4 - Amendment No. 1 to Revolving Credit Agreement dated June 15, 1994 between the Company and Citibank N.A.(6)
4.5 - Form of Indenture dated as of 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.(7)
4.6 - Second Amended and Restated Shareholder Agreement dated September 26, 1994 by and among Carnival Corporation,
Ted Arison, TAMMS Investment Company, The Ted Arison Family Holding Trust No. 4, The Micky Arison "B" Trust,
and T.A. Limited. (8)
4.7 - Assignment and Assumption Agreement dated September 26, 1994 by and among Ted Arison, Baring Brothers Ltd.,
Keinnort Benson Trustees Ltd., Cititrust Ltd., W.A.M. Trustees Jersey Ltd., and Carnival Corporation. (9)
10.1 - Carnival Cruise Lines, Inc. Stock Option Plan.(10)
10.2 - Carnival Cruise Lines, Inc. Restricted Stock Plan.(11)
10.3 - Carnival Cruise Lines, Inc. Retirement Plan.(12)
10.4 - Carnival Cruise Lines, Inc. Non-Qualified Retirement Plan.(13)
10.5 - Carnival Cruise Lines, Inc. Key Management Incentive Plan.(14)
10.6 - 1993 Outside Directors' Stock Option Plan.(15)
10.7 - Consulting Agreement/Registration Rights Agreement dated June 14, 1991, between the Company and Ted
Arison.(16)
10.8 - Form of Deferred Compensation Agreement between the Company and each of Harvey Levinson, Meshulam Zonis and
Robert H. Dickinson.(17)
10.9 - Indemnity Agreement between the Company and Ted Arison.(18)
10.10 - Stock Compensation Agreement dated February 1, 1991, between the Company and Robert H. Dickinson.(19)
10.11 - Employment Agreement dated July 1, 1989, between the Company and Howard Frank.(20)
10.12 - Carnival Cruise Lines, Inc. 1992 Stock Option Plan.(21)
10.13 - Holland America Line-Westours Inc. 1991-1993 Key Management Incentive Plan.(22)
10.14 - Amendment to the Carnival Cruise Lines, Inc. Stock Option Plan.(23)
10.15 - Holland America Line-Westours Inc. 1989 and 1990 Key Management Incentive Plan.(24)
10.16 - Consulting Agreement dated July 31, 1992, between the Company and Arison Investments Ltd.(25)
10.17 - First Amendment to Consulting Agreement/Registration Rights Agreement.(26)
10.18 - 1993 Carnival Cruise Lines, Inc. Restricted Stock Plan.(27)
10.19 - Shipbuilding Agreement dated January 12, 1993 between Futura Cruises, Inc. and Fincantieri - Cantieri Navali
Italiani S.p.A.*(28)
10.20 - Shipbuilding Agreement dated December 23, 1993 between Kvaerner Masa-Yards, Inc. and the Company.(29)
10.21 - Shipbuilding Agreement dated December 10, 1993 between Wind Surf Limited and Fincantieri-Cantieri Navali
Italiani S.p.A.**(30)
10.22 - Organization agreement dated February 25, 1994 between the Company and the principals of The Continental
Companies.(31)
10.23 - Shipbuilding Agreement dated January 14, 1995 between Utopia Cruises, Inc. and Fincantieri-Cantieri Navali
Italiani S.p.A.**
10.24 - Shipbuilding Agreement dated January 14, 1995 between Wind Surf Limited and Fincantieri-Cantieri Navali
Italiani S.p.A.**
10.25 - Shipbuilding Agreement dated December 7, 1994 between Carnival Corporation and Kvaerner Masa-Yards, Inc.**
10.26 - Shipbuilding Agreement dated January 12, 1995 between Carnival Corporation and Kvaerner Masa-Yards, Inc.**
24
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10.27 - Shipbuilding Agreement dated March 25, 1992 between Carnival Corporation and Kvaerner Masa-Yards, Inc.**
10.28 - Consulting and Retirement Agreement between A. Kirk Lanterman and Holland America Line-Westours, Inc.
10.29 - Amended and Restated Carnival Corporation 1992 Stock Option Plan
10.30 - 1994 Carnival Cruise Line Key Management Incentive Plan
10.31 - Stock Purchase Agreement between Carnival Corporation and CHC International.
10.32 - Stock Purchase Agreement between Carnival Corporation, Sherwood Weiser and others.
11.0 - Statement regarding computation of per share earnings.
12.0 - Ratio of Earnings to Fixed Charges
13.0 - Portions of 1994 Annual Report incorporated by reference into 1994 Annual Report on Form 10-K
21 - Subsidiaries of the Company.
23.0 - Price Waterhouse LLP Consent
27.0 - Financial Data Schedule (for SEC use only)
28.1 - Maks L. Birnbach Director's Agreement.(32)
28.2 - William S. Ruben Director's Agreement.(33)
28.3 - Stuart Subotnick Director's Agreement.(34)
28.4 - Sherwood M. Weiser Director's Agreement.(35)
28.5 - Uzi Zucker Director's Agreement.(36)
* Portions of documents omitted pursuant to an order for confidential
treatment pursuant to Rule 24b-2 under the Securities Act of 1934, as amended.
** Portions of documents omitted pursuant to an application for an order
for confidential treatment pursuant to Rule 24b-2 under the Securities Act of
1934, as ammended.
25
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(1) Incorporated by reference to Exhibit No. 3.1 to the registrant's registration statement on Form S-1 (File No.
33-14844), filed with the Securities and Exchange Commission.
(2) 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.
(3) Incorporated by reference to Exhibit No. 4.10 to the registrant's registration statement on Form S-1 (File No.
33-31795), filed with the Securities and Exchange Commission.
(4) Incorporated by reference to Exhibit 4.1 to the registrant's Quarterly Report on Form 10-Q for the quarter
ended May 31, 1993 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(5) Incorporated by reference to Exhibit No. 4(a) and Exhibit No. 4(b) to the registrant's Report on Form 8-K as
filed with the Securities and Exchange Commission on July 6, 1992.
(6) Incorporated by reference to Exhibit 4.1 to the registrant's Quarterly Report on Form 10-Q for the quarter
ended May 31, 1994 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(7) Incorporated by reference to Exhibit No. 4 on Form S-3 to the registrant's registration statement on Form S-3
(File No. 33-53136), filed with the Securities and Exchange Commission.
(8) Incorporated by reference to Exhibit 4.1 to the registrant's Quarterly Report on Form 10-Q for the quarter
ended August 31, 1994 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(9) Incorporated by reference to Exhibit 4.2 to the registrant's Quarterly Report on Form 10-Q for the quarter
ended August 31, 1994 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(10) Incorporated by reference to Exhibit No. 10.1 to the registrant's registration statement on Form S-1 (File No.
33-14844), filed with the Securities and Exchange Commission.
(11) Incorporated by reference to Exhibit No. 10.2 to the registrant's registration statement on Form S-1 (File No.
33-14844), filed with the Securities and Exchange Commission.
(12) Incorporated by reference to Exhibit No. 10.3 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 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.
(14) 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, 1993 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(15) 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, 1993 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(16) 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.
(17) 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.
(18) Incorporated by reference to Exhibit No. 10.18 to the registrant's registration statement on Form S-1 (File No.
33-14844), filed with the Securities and Exchange Commission.
26
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(19) Incorporated by reference to Exhibit No. 10.43 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1991 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(20) Incorporated by reference to Exhibit No. 10.44 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1991 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(21) Incorporated by reference to Exhibit No. 10.45 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1991 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(22) Incorporated by reference to Exhibit No. 10.46 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1991 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(23) Incorporated by reference to Exhibit No. 10.47 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1991 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(24) Incorporated by reference to Exhibit No. 10.48 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1991 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(25) Incorporated by reference to Exhibit No. 10.39 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.
(26) 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.
(27) Incorporated by reference to Exhibit No. 10.41 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.
(28) Incorporated by reference to Exhibit No. 10.42 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.
(29) Incorporated by reference to Exhibit No. 10.39 to the registrant's Annual Report on Form 10-K for the fiscal
year ended November 30, 1993 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(30) 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, 1993 (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, 1994 (Commission File No. 1-9610), filed with the Securities and Exchange Commission.
(32) 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.
(33) 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.
(34) 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.
27
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(35) 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.
(36) 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.