Filed pursuant to Form 424(b)(?)
Registration No. 33-?????
PROSPECTUS SUPPLEMENT
- ---------------------
(TO PROSPECTUS DATED MAY 17, 1995)
[LOGO]
$100,000,000
CARNIVAL CORPORATION
7.05% NOTES DUE MAY 15, 2005
-------------------
Interest on the Notes is payable on November 15 and May 15 of each year,
commencing November 15, 1995. Except as described in "Description of Debt
Securities--Redemption or Assumption of Debt Securities under Certain
Circumstances" in the Prospectus, the Notes are not redeemable by the Company
prior to maturity. The Notes will be represented by one or more global Notes
registered in the name of the nominee of The Depository Trust Company.
Beneficial interests in the global Notes will be shown on, and transfers thereof
will be effected only through, records maintained by DTC and its participants.
Except as described herein, Notes in definitive form will not be issued. The
Notes will be issued only in denominations of $1,000 and integral multiples
thereof. The Notes will trade in DTC's Same-Day Funds Settlement System until
maturity, and secondary market trading activity for the Notes will therefore
settle in immediately available funds. All payments of principal and interest
will be made by the Company in immediately available funds. See "Description of
Notes-- Same-Day Settlement and Payment".
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
================================================================================
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) DISCOUNT(2) COMPANY(1)(3)
Per Note.............. 99.8% .65% 99.15%
Total................. $99,800,000 $650,000 $99,150,000
================================================================================
(1) Plus accrued interest from May 15, 1995.
(2) The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting estimated expenses of $100,000 payable by the Company.
-------------------
The Notes are offered by the Underwriter, as specified herein, subject to
receipt and acceptance by it and subject to its right to reject any order in
whole or in part. It is expected that the Notes will be ready for delivery in
book-entry form only through the facilities of DTC in New York, New York, on or
about May 24, 1995 against payment therefor in immediately available funds.
-------------------
MERRILL LYNCH & CO.
-------------------
The date of this Prospectus Supplement is May 17, 1995.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
THE COMPANY
Carnival Corporation (the "Company") is the world's largest multiple-night
cruise line based on the number of passengers carried and revenues generated.
The Company offers a broad range of cruise products, serving the contemporary
cruise market through Carnival Cruise Lines, the premium market through Holland
America Line and the luxury market through Windstar Cruises and the Company's
joint venture, Seabourn Cruise Line. In total, the Company owns and operates 19
cruise ships with an aggregate capacity of 23,995 passengers based on two
passengers per cabin. Through its joint venture, the Company has an interest in
the operation of an additional two cruise ships with an aggregate capacity of
408 passengers. The nine Carnival Cruise Lines 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,
the Mediterranean and the Far East. The two Seabourn ships have an aggregate
capacity of 408 passengers with itineraries in the Caribbean, the Baltic, the
Mediterranean and the Far East. In April 1995, the Company sold its 49% equity
interest in Epirotiki Lines for $24 million in cash and $1 million in notes.
The Company has signed agreements with a Finnish shipyard providing for the
construction of four additional SuperLiners, each with a capacity of 2,040
passengers, for Carnival Cruise Lines with delivery expected in June 1995, March
1996, February 1998 and November 1998. The Company also has agreements with an
Italian shipyard for the construction of two cruise ships, each with a capacity
of 2,640 passengers, for Carnival Cruise Lines with delivery expected in
September 1996 and December 1998 and for the construction of one cruise ship
with a capacity of 1,266 passengers and one cruise ship with a capacity of 1,320
passengers for Holland America Line, with delivery expected in June 1996 and
September 1997, respectively.
The Company also operates a tour business, through Holland America
Line--Westours Inc. ("Holland America Westours"), which markets sightseeing
tours both separately and as a part of Holland America Line cruise/tour
packages. Holland America Westours operates 16 hotels in Alaska and the Canadian
Yukon, four luxury day-boats offering tours to the glaciers of Alaska and the
Yukon River, over 290 motor coaches used for sightseeing and charters in the
states of Washington and Alaska and in the Canadian Rockies and ten private
domed rail cars which are run on the Alaskan railroad between Anchorage and
Fairbanks.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Notes offered hereby
will be added to the working capital of the Company and will be available for
general corporate purposes, which may include the repayment of indebtedness, the
financing of capital commitments and possible future acquisitions associated
with the continued expansion of the Company's cruise business. The Company
expects to use all or a portion of such net proceeds to pay a portion of the
approximately $250 million which remains to be paid for the cruise ship
Imagination which is expected to be delivered in June 1995. The remainder of the
purchase price for the Imagination is expected to be funded by borrowings under
the $750 million unsecured revolving credit facility which the Company entered
into in July 1993, and amended in June 1994, with a syndicate of banks led by
Citibank, N.A. (the "Revolving Credit Facility"). Pending the application set
forth above, the net proceeds from the offering of the Notes will be invested in
marketable securities, including, without limitation, certificates of deposit
and commercial paper.
S-2
CAPITALIZATION
The following table sets forth the capitalization of the Company at February
28, 1995. For information on the use of the net proceeds to the Company from the
sale of the Notes offered hereby, see "Use of Proceeds". The information set
forth below should be read in conjunction with the financial statements and
related notes incorporated in this Prospectus by reference.
AS OF
FEBRUARY 28, 1995
--------------------
ACTUAL
--------------------
(DOLLARS IN
THOUSANDS)
Current portion of long-term debt........................................... $ 87,186
-----------
-----------
Long-term debt and convertible notes:
Mortgages and other loans payable bearing interest at rates ranging from
8% to 9.9%, secured by vessels.......................................... 198,664
Unsecured Revolving Credit Facility(1).................................... 215,000
Other loans payable....................................................... 50,004
5.75% Notes Due March 15, 1998............................................ 200,000
6.15% Notes Due October 1, 2003........................................... 124,941
7.70% Notes Due July 15, 2004............................................. 99,893
7.05% Notes Due May 15, 2005(2)........................................... --
7.20% Debentures Due October 1, 2023...................................... 124,863
4.50% Convertible Subordinated Notes Due July 1, 1997..................... 115,000
-----------
Total long-term debt and convertible notes................................ 1,128,365
-----------
Shareholders' equity:
Class A Common Stock ($.01 par value; one vote per share; 399,500 shares
authorized; 227,658 shares issued and outstanding)...................... 2,277
Class B Common Stock ($.01 par value; five votes per share; 100,500 shares
authorized; 54,957 shares issued and outstanding)....................... 550
Paid-in capital........................................................... 546,464
Retained earnings......................................................... 1,436,945
Less--other............................................................... (8,477)
-----------
Total shareholders' equity............................................ 1,977,759
-----------
Total capitalization................................................ $3,106,124
-----------
-----------
- ------------
(1) The indebtedness outstanding under the Revolving Credit Facility has been
reduced to approximately $35 million as of the date hereof as a result of
repayment from (i) net proceeds from the public offering in April 1995 of
2,070,000 shares of Class A Common Stock and (ii) operating cash flow of the
Company since February 28, 1995.
(2) The aggregate principal amount of the Notes is $100,000,000, and the initial
aggregate offering price to the public of the Notes is $99,800,000.
S-3
SUMMARY FINANCIAL DATA
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE AND PASSENGER DATA)
THREE MONTHS ENDED FISCAL YEAR ENDED
FEBRUARY 28, NOVEMBER 30,
------------------- --------------------------------------------------------------
1995 1994 1994 1993 1992(1) 1991 1990
-------- -------- ---------- ---------- ---------- ---------- ----------
OPERATIONS DATA:
Revenues....................... $419,820 $385,256 $1,806,016 $1,556,919 $1,473,614 $1,404,704 $1,253,756
Operating income............... 76,912 72,013 443,674 347,666 324,896 315,905 291,313
Income from continuing
operations.................... 67,552 65,051 381,765 318,170 281,773 253,824 234,431
Discontinued operations(2)..... -- -- -- -- -- (168,836) (28,229)
Net income..................... 67,552 65,051 381,765 318,170 276,584 84,988 206,202
Earnings per share:
Continuing operations......... $ .24 $ .23 $ 1.35 $ 1.13 $ 1.00 $ .93 $ .87
Net Income.................... $ .24 $ .23 $ 1.35 $ 1.13 $ .98 $ .31 $ .77
Dividends declared per share... $ .075 $ .070 $ .285 $ .280 $ .280 $ .245 $ .240
Weighted average shares........ 282,826 282,674 282,744 282,474 281,686 273,832 269,490
Passenger cruise days.......... 2,107 1,916 8,102 7,003 6,766 6,365 5,565
Percent of total cruise
capacity(3).................... 99.9% 100.2% 104.0% 105.3% 105.3% 105.7% 106.6%
Ratio of earnings to fixed
charges(4)..................... 3.7x 4.1x 5.8x 5.7x 4.4x 3.2x 2.8x
AS OF FEBRUARY 28, 1995
-----------------------
ACTUAL
-----------------------
BALANCE SHEET DATA:
Cash and cash equivalents and short-term investments..................... $ 113,630
Total current assets..................................................... 249,821
Total assets............................................................. 3,704,025
Customer deposits(5)..................................................... 281,702
Total current liabilities................................................ 583,878
Long-term debt and convertible notes..................................... 1,128,365
Total shareholders' equity............................................... 1,977,759
- ------------
(1) In the fiscal year ended November 30, 1992, the Company took an
extraordinary charge of $5.2 million in connection with the redemption of
its Zero Coupon Convertible Subordinated Notes due 2005.
(2) In November 1991, the Company adopted a formal plan to dispose of Carnival's
Crystal Palace Resort and Casino (the "CCP Resort"), which comprised the
entire resort and casino segment of the Company's operations. At that time,
the Company recorded a provision for the loss on disposal of the CCP Resort
of approximately $135 million, representing a write-down of $95 million to
record the property at its estimated net realizable value and a provision of
$40 million for the possible funding for the CCP Resort prior to disposal.
The data for the fiscal year ended November 30, 1990 have been restated to
reflect the discontinuation of the CCP Resort operations for accounting
purposes.
(3) In accordance with cruise industry practice, total capacity is calculated
based on two passengers per cabin even though some cabins can accommodate
three or four passengers. The percentages in excess of 100% indicate that
more than two passengers occupied some cabins.
(4) The ratio of earnings to fixed charges has been computed by dividing
earnings from continuing operations available for fixed charges (income from
continuing operations before income taxes adjusted for interest expense and
one-third of rent expense) by fixed charges. Fixed charges include interest
costs (interest expense plus capitalized interest and one-third of rent
expense). The Company has assumed that one-third of rent expense is
representative of the interest factor.
(5) Represents customer deposits for cruises and tours which will be recognized
as revenue when earned in the future.
S-4
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby (referred to in the Prospectus as "Debt Securities") supplements, and to
the extent inconsistent therewith replaces, the description of the general terms
and provisions of Debt Securities set forth in the Prospectus, to which
description reference is hereby made.
The Notes offered hereby will be limited to $100,000,000 aggregate principal
amount and will constitute a series of Debt Securities of the Company. The Notes
will bear interest at the rate of 7.05% per annum, from May 15, 1995, or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, payable semiannually on November 15 and May 15, commencing
November 15, 1995, to the persons in whose names the Notes are registered at the
close of business on the November 1 and May 1, as the case may be, preceding
such November 15 and May 15. Principal of and interest on the Notes will be
payable at the office of First Trust National Association, the Trustee under the
Indenture, in the Borough of Manhattan, The City of New York, or at such other
office designated by the Company; provided, however, that at the option of the
Company, payment of interest may be made by check mailed to the address of the
person entitled thereto as such address shall appear in the Note Register.
The Notes will mature on May 15, 2005, and, except as described in
"Description of Debt Securities--Redemption or Assumption of Debt Securities
under Certain Circumstances" in the Prospectus, will not be redeemable by the
Company prior to maturity.
BOOK-ENTRY SYSTEM
The Notes will be issued in the form of one or more fully registered global
securities which will be deposited with, or on behalf of, The Depository Trust
Company, New York, New York (the "Depository") and registered in the name of the
Depository's nominee. See "Description of Debt Securities-- Book-Entry System"
in the Prospectus.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made in immediately available funds. All
payments of principal and interest will be made by the Company in immediately
available funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing house or next-day funds. In contrast, the Notes
will trade in the Depository's Same-Day Funds Settlement System until maturity,
and secondary market trading in the Notes will therefore be required by the
Depository to settle in immediately available funds. No assurance can be given
as to the effect, if any, of settlement in immediately available funds on
trading activity in the Notes.
S-5
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement") between the Company and Merrill Lynch, Pierce,
Fenner & Smith Incorporated (the "Underwriter"), the Company has agreed to sell
to the Underwriter, and the Underwriter has agreed to purchase, the entire
principal amount of the Notes.
Under the terms and conditions of the Underwriting Agreement, the
Underwriter is committed to take and pay for all of the Notes, if any are taken.
The Underwriter proposes to offer the Notes in part directly to retail
purchasers at the initial public offering price set forth on the cover page of
this Prospectus Supplement and in part to certain securities dealers at such
price less a concession of .4% of the principal amount of the Notes. The
Underwriter may allow, and such dealers may reallow, a concession not to exceed
.25% of the principal amount of the Notes to certain brokers and dealers. After
the Notes are released for sale to the public, the offering price and other
selling terms may from time to time be varied by the Underwriter.
The Notes are a new issue of securities with no established trading market.
The Company has been advised by the Underwriter that the Underwriter intends to
make a market in the Notes but is not obligated to do so and may discontinue
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Notes.
Settlement for the Notes will be made in immediately available funds, and
all secondary trading in the Notes will settle in immediately available funds.
See "Description of Notes--Same-Day Settlement and Payment."
The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
VALIDITY OF THE NOTES
The validity of the Notes will be passed upon for the Company with respect
to New York law by Paul, Weiss, Rifkind, Wharton & Garrison, New York, New York
and for the Underwriter with respect to New York law by Sullivan & Cromwell, New
York, New York. The validity of the Notes with respect to Panamanian law will be
passed upon by Tapia Linares y Alfaro, Panama City, Republic of Panama. James M.
Dubin, a partner of Paul, Weiss, Rifkind, Wharton & Garrison, is the sole
stockholder of the trustee of the Micky Arison 1994 "B" Trust, a trust whose
primary beneficiary is Micky Arison, the Chairman and Chief Executive Officer of
the Company. Paul, Weiss, Rifkind, Wharton & Garrison also serves as counsel to
Micky Arison. See "Certain Considerations--Control by Principal Shareholders".
S-6
$500,000,000
CARNIVAL CORPORATION
DEBT SECURITIES AND WARRANTS
Carnival Corporation (the "Company") may offer from time to time in one or more
series up to $500,000,000 aggregate public offering price (or its equivalent
(based on the applicable exchange rate at the time of sale) if issued with
principal amounts denominated in one or more foreign currencies or currency
units as shall be designated by the Company) of its debt securities (the "Debt
Securities"), consisting of notes and/or debentures denominated in United States
dollars or any other currency, including composite currencies such as the
European Currency Unit, and warrants to purchase Debt Securities or to buy and
sell government debt securities, foreign currencies, currency units or units of
a currency index or basket, units of a stock index or basket or a commodity or
commodity index (the "Warrants") on terms to be determined at or prior to the
time of sale, subject to reduction from time to time after the date hereof from
the issuance of convertible debt securities and Class A Common Stock pursuant to
the Registration Statement of which this Prospectus is a part. The Debt
Securities and Warrants may be offered independently or together for sale. This
Prospectus will be supplemented by one or more prospectus supplements (each, a
"Prospectus Supplement") which will set forth, with respect to the particular
series of Debt Securities for which this Prospectus and any such Prospectus
Supplement are being delivered, the specific title, the aggregate principal
amount, the currencies of issue and payment, the initial public offering price,
the maturity, the interest rate or rates (which may be either fixed or
variable), if any, and/or method of determination thereof, the time of payment
of any interest, any redemption, extension or early repayment terms, any
provision for sinking fund payments, the net proceeds to the Company and other
specific terms relating to such series of Debt Securities, and, with respect to
the Warrants for which this Prospectus and any such Prospectus Supplement are
being delivered, the duration, purchase price, exercise price, detachability and
any other specific terms not set forth herein of such Warrants.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The Company may sell the Debt Securities and Warrants to or through
underwriters, and also may sell the Debt Securities and Warrants directly to
other purchasers or through agents. See "Plan of Distribution." In addition, the
Debt Securities and Warrants may be sold to dealers at the applicable price to
the public set forth in the Prospectus Supplement relating to a particular
series of Debt Securities or issuance of Warrants who later resell to investors.
Such dealers may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended. If any agents of the Company, or any
underwriters, are involved in the sale of any Debt Securities and Warrants, the
names of such agents or underwriters and any applicable commissions or discounts
are set forth in the accompanying Prospectus Supplement.
The date of this Prospectus is May 17, 1995.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company with the Commission can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 or at its Regional Offices located at Room
1400, 500 West Madison Street, Chicago, Illinois 60661 and 7 World Trade Center,
13th Floor, New York, New York 10048, and copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, reports,
proxy statements and other information concerning the Company can also be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005, on which the Company's Class A Common Stock and 4 1/2%
Convertible Subordinated Notes Due July 1, 1997 are listed.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), with respect to the Debt Securities and Warrants offered hereby. This
Prospectus and any applicable Prospectus Supplement do not contain all the
information set forth in the Registration Statement, certain parts of which have
been omitted pursuant to the rules and regulations of the Commission. The
information so omitted may be obtained from the Commission's principal office in
Washington, D.C. upon payment of the fees prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended November
30, 1994, as amended by Form 10-K/A #1 dated March 21, 1995, the Company's
Current Report on Form 8-K dated April 12, 1995 and the Company's Quarterly
Report on Form 10-Q for the three months ended February 28, 1995 filed with the
Commission (File No. 1-9610) pursuant to the Exchange Act, are incorporated
herein by reference.
All other documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Company's Debt Securities and
Warrants made hereby shall be deemed incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deeemed to be incorporated
herein by reference, or contained in this Prospectus, shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom this
Prospectus and any Prospectus Supplement have been delivered, upon written or
oral request of such person, a copy (without exhibits other than exhibits
specifically incorporated by reference) of any or all documents incorporated by
reference into this Prospectus. Requests for such copies should be directed to
Investor Relations, Carnival Corporation, 3655 N.W. 87th Avenue, Miami, Florida
33178-2428; telephone number (305) 599-2600.
2
THE COMPANY
The Company is the world's largest multiple-night cruise line based on the
number of passengers carried and revenues generated. The Company offers a broad
range of cruise products, serving the contemporary cruise market through
Carnival Cruise Lines, the premium market through Holland America Line and the
luxury market through Windstar Cruises and the Company's joint venture, Seabourn
Cruise Line. In total, the Company owns and operates 19 cruise ships with an
aggregate capacity of 23,995 passengers based on two passengers per cabin.
Through its joint venture, the Company has an interest in the operation of an
additional two cruise ships with an aggregate capacity of 408 passengers. The
nine Carnival Cruise Lines 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, the
Mediterranean and the Far East. The two Seabourn ships have an aggregate
capacity of 408 passengers with itineraries in the Caribbean, the Baltic, the
Mediterranean and the Far East.
The Company has signed agreements with a Finnish shipyard providing for the
construction of four additional SuperLiners, each with a capacity of 2,040
passengers, for Carnival Cruise Lines with delivery expected in June 1995, March
1996, February 1998 and November 1998. The Company also has agreements with an
Italian shipyard for the construction of two cruise ships, each with a capacity
of 2,640 passengers, for Carnival Cruise Lines with delivery expected in
September 1996 and December 1998 and for the construction of one cruise ship
with a capacity of 1,266 passengers and one cruise ship with a capacity of 1,320
passengers for Holland America Line, with delivery expected in June 1996 and
September 1997, respectively.
The Company also operates a tour business, through Holland America
Line--Westours Inc. ("Holland America Westours"), which markets sightseeing
tours both separately and as a part of Holland America Line cruise/tour
packages. Holland America Westours operates 16 hotels in Alaska and the Canadian
Yukon, four luxury day-boats offering tours to the glaciers of Alaska and the
Yukon River, over 290 motor coaches used for sightseeing and charters in the
states of Washington and Alaska and in the Canadian Rockies and ten private
domed rail cars which are run on the Alaskan railroad between Anchorage and
Fairbanks.
The Company was incorporated under the laws of the Republic of Panama in
November 1974. The Company's executive offices are located at 3655 N.W. 87th
Avenue, Miami, Florida 33178-2428, telephone number (305) 599-2600. The
Company's registered office in Panama is located at 10 Elvira Mendez Street,
Interseco Building, Panama, Republic of Panama.
CERTAIN CONSIDERATIONS
TAXATION OF THE COMPANY
The Company believes that it is not subject to United States corporate tax
on its income from the international operation of ships ("Shipping Income").
(Certain of the Company's United States source income, such as Holland America
Line's income from bus, hotel and tour operations, is not Shipping Income, and
thus is subject to United States tax.) The applicable exemption from United
States corporate income tax, which is provided by Section 883 of the Internal
Revenue Code of 1986, as amended (the "Code"), is available under current United
States law for as long as the Company and its subsidiaries that earn Shipping
Income (collectively, the "Shipping Companies") meet both an "Incorporation
Test" and a "CFC Test".
A corporation meets the Incorporation Test if it is organized under the laws
of a foreign country that grants an equivalent exemption to corporations
organized in the United States (an "equivalent exemption jurisdiction"). The
Company believes that all of the Shipping Companies are organized in equivalent
exemption jurisdictions.
A Shipping Company meets the CFC Test if it is a controlled foreign
corporation ("CFC"), as defined in Section 957(a) of the Code. A foreign
corporation is a CFC if stock representing more than 50% of such corporation's
voting power or equity value is owned (or considered as owned) by United
3
States persons each of whom owns (or is considered to own) stock representing
10% or more of the corporation's voting power.
The Company and the Shipping Companies meet the CFC Test because stock of
the Company representing more than 50% of the voting power of all the Company's
stock is owned by the Micky Arison 1994 "B" Trust, a United States trust whose
primary beneficiary is Micky Arison (the "B Trust"). If the Company and the
Shipping Companies were to cease to meet the CFC test, and no other basis for
exemption were available, much of their income would become subject to taxation
by the United States at higher than normal corporate tax rates.
CONTROL BY PRINCIPAL SHAREHOLDERS
Ted Arison, the B Trust, certain members of the Arison family, trusts for
the benefit of Mr. Ted Arison's children and the Arison Foundation, Inc., a
private foundation established by Ted Arison (collectively, the "Principal
Shareholders"), beneficially own, in the aggregate, approximately 59.8% of the
outstanding capital stock and control, in the aggregate, approximately 77.4% of
the voting power of the Company. For as long as the B Trust holds a majority of
the shares of the Class B Common Stock and the number of outstanding shares of
Class B Common Stock is at least 12 1/2% of the number of outstanding shares of
both Class A and Class B Common Stock, the B Trust will have the power to elect
at least 75% of the directors and to substantially influence the Company's
affairs and policies, Micky Arison, the Chairman and Chief Executive Officer of
the Company, has the sole right to vote and direct the sale of the Class B
Common Stock held by the B Trust, subject, during Ted Arison's lifetime, to the
consent of the trustee of the B Trust. The Company has agreed under certain loan
agreements to ensure that Ted Arison or members of his immediate family
beneficially own, directly or indirectly, a number of shares of the Company's
capital stock at least sufficient to elect the majority of the directors.
SOURCE OF INTEREST ON THE DEBT SECURITIES
Under the "branch tax" rules of the Code, it is possible that,
notwithstanding that the Company is a Panamanian corporation, some or all of the
interest on the Debt Securities may be treated as United States source income
for United States federal income tax purposes.
USE OF PROCEEDS
Except as otherwise provided in the applicable Prospectus Supplement, the
net proceeds to the Company from the sale of the Debt Securities and Warrants
offered hereby will be added to the working capital of the Company and will be
available for general corporate purposes, which may include the repayment of
indebtedness, the financing of capital commitments and possible future
acquisitions associated with the continued expansion of the Company's cruise
business. Pending application as set forth above, the net proceeds will be
invested in marketable securities, including, without limitation, certificates
of deposit and commercial paper.
4
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of "earnings" to "fixed charges" for the Company and its
subsidiaries were as follows for the three months ended February 28, 1995 and
1994 and for the five years ended November 30, 1994:
THREE MONTHS
ENDED
FEBRUARY 28, YEARS ENDED NOVEMBER 30,
- ------------- -----------------------------------------
1995 1994 1994 1993 1992 1991 1990
- ---- ---- ---- ---- ---- ---- -----
3.7x 4.1x 5.8x 5.7x 4.4x 3.2x 2.8x
The ratio of earnings to fixed charges has been computed by dividing
earnings from continuing operations available for fixed charges (income from
continuing operations before income taxes adjusted for interest expense and
one-third of rent expense) by fixed charges. Fixed charges include interest
costs (interest expense plus capitalized interest and one-third of rent
expense). The Company has assumed that one-third of rent expense is
representative of the interest factor.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued in one or more series under an
Indenture dated as of March 1, 1993, as supplemented from time to time (the
"Indenture"), between the Company and First Trust National Association ("First
Trust"), as Trustee. The term "Trustee," as used herein, shall mean First Trust
and, if at any time there is more than one Trustee acting under the Indenture,
the term "Trustee" as used herein with respect to Indenture Securities (as
defined below) of any particular series shall mean the Trustee with respect to
the Indenture Securities of such series. The following statements with respect
to the Debt Securities are subject to the detailed provisions of the Indenture,
the form of which is filed as an exhibit to the Registration Statement.
Parenthetical references below are to the Indenture (or the Form of Security
contained therein if so specified) and, whenever any particular provision of the
Indenture or any term used therein is referred to, such provision or term is
incorporated by reference as a part of the statement in connection with which
such reference is made, and the statement in connection with which such
reference is made is qualified in its entirety by such reference.
The particular terms of each series of Debt Securities, as well as any
modification or addition to the general terms of the Debt Securities as herein
described, which may be applicable to a particular series of Debt Securities,
are described in the Prospectus Supplement relating to such series of Debt
Securities and will be set forth in a filing with the Commission. Accordingly,
for a description of the terms of a particular series of Debt Securities,
reference must be made to both the Prospectus Supplement relating to such series
and to the description of Debt Securities set forth in this Prospectus.
GENERAL
The Debt Securities offered hereby will be limited to $500,000,000 aggregate
principal amount (or (i) its equivalent (based on the applicable exchange rate
at the time of sale), if Debt Securities are issued with principal amounts
denominated in one or more foreign currencies, composite currencies or currency
units as shall be designated by the Company, or (ii) such greater amount, if
Debt Securities are issued at an original issue discount, as shall result in
aggregate proceeds of $500,000,000 to the Company). The Indenture provides that
additional debt securities may be issued thereunder up to the aggregate
principal amount, which is not limited by the Indenture, authorized from time to
time by the Company's Board of Directors or any duly authorized committee
thereof. So long as a single Trustee is acting for the benefit of the holders of
all the Debt Securities offered hereby and any such additional debt securities
issued under the Indenture, the Debt Securities and any such additional debt
securities are herein collectively referred to as the "Indenture Securities."
The Indenture also provides that there may be more than one Trustee under the
Indenture, each with respect to one or more different series of
5
Indenture Securities. See also "Trustee" herein. At any time when two or more
Trustees are acting, each with respect to only certain series, the term
"Indenture Securities" as used herein shall mean the one or more series with
respect to which each respective Trustee is acting and the powers and trust
obligations of each such Trustee as described herein shall extend only to the
one or more series of Indenture Securities for which it is acting as Trustee.
The effect of the provisions contemplating that there might be more than one
Trustee acting for different series of Indenture Securities is that, in that
event, those Indenture Securities (whether of one or more than one series) for
which each Trustee is acting would be treated as if issued under a separate
Indenture.
The applicable Prospectus Supplement will set forth a description of the
particular series of Debt Securities being offered thereby, including: (1) the
designation or title of such Debt Securities; (2) the aggregate principal amount
of such Debt Securities; (3) the percentage of their principal amount at which
such Debt Securities will be offered; (4) the date or dates on which the
principal of such Debt Securities will be payable; (5) the rate or rates (which
may be either fixed or variable) and/or the method of determination of such rate
or rates at which such Debt Securities shall bear interest, if any; (6) the date
or dates from which any such interest shall accrue, or the method of
determination of such date or dates, and the date or dates on which any such
interest shall be payable; (7) the terms for redemption, extension or early
repayment of such Debt Securities, if any; (8) if other than denominations of
$1,000 and any integral multiple thereof, the denominations in which such Debt
Securities are authorized to be issued; (9) the currencies in which such Debt
Securities are issued or payable; (10) the provisions for a sinking fund, if
any; (11) if other than the principal amount thereof, the portion of the
principal amount of such Debt Securities that will be payable upon the
declaration of acceleration of the maturity thereof; (12) any additional
restrictive covenants included for the benefit of the holders of such Debt
Securities; (13) any additional Event of Default with respect to such Debt
Securities; (14) whether such Debt Securities are issuable as a Global Security
or securities; (15) any applicable tax consequences with respect to such Debt
Securities; and (16) any other term or provision relating to such Debt
Securities which is not inconsistent with the provisions of the Indenture.
One or more series of Debt Securities may be sold at a substantial discount
below their stated principal amount, bearing no interest or interest at a rate
which at the time of issuance is below market rates. Federal income tax
consequences and special considerations applicable thereto will be described in
the Prospectus Supplement relating to any such series of Debt Securities.
The Debt Securities will be unsecured obligations of the Company and will
rank pari passu with all other unsecured and unsubordinated indebtedness of the
Company. At February 28, 1995, the Company, including its subsidiaries, had
approximately $1,445 million of indebtedness outstanding (excluding customer
deposits of $282 million). Because the Debt Securities are unsecured, they in
effect rank junior to any secured indebtedness of the Company. At February 28,
1995, the Company, excluding its subsidiaries, had $203 million of secured
indebtedness outstanding. In addition, the Debt Securities will effectively be
subordinated to all indebtedness and other liabilities of the subsidiaries of
the Company, which at February 28, 1995, totalled $353 million (excluding
customer deposits of $126 million).
Except as otherwise provided in the applicable Prospectus Supplement,
principal, premium, if any, and interest, if any, will be payable at an office
or agency to be maintained by the Company in St. Paul, Minnesota, except that at
the option of the Company interest may be paid by check mailed to the person
entitled thereto. (Form of Security and Sections 10.1 and 10.2).
The Debt Securities will be issued only in fully registered form without
coupons and may be presented for registration of transfer or exchange at the
corporate trust office of the Trustee. No service charge will be made for any
transfer or exchange of the Debt Securities, but the Company may require payment
of a sum to cover any tax or other governmental charge payable in connection
therewith. Not all Debt Securities of any one series need be issued at the same
time, and, unless otherwise provided, a series may be reopened for issuances of
additional Debt Securities of such series. (Sections 3.1 and 3.5).
6
The Indenture does not contain any covenants or provisions that are
specifically intended to afford holders of the Debt Securities protection in the
event of a highly leveraged transaction. With respect to any specific series of
Debt Securities, the existence or non-existence of such covenants or provisions
will be disclosed in the applicable Prospectus Supplement.
Neither Panamanian law nor the Company's Articles of Incorporation or
By-laws impose limitations on the right of non-resident or foreign owners to
hold Debt Securities. While no tax treaty currently exists between the Republic
of Panama and the United States, under current law the Company believes that
interest payments to holders of its Debt Securities are not subject to taxation
under the laws of the Republic of Panama.
BOOK-ENTRY SYSTEM
The Debt Securities of a Series may be issued in the form of one or more
Global Securities that will be deposited with a depository (the "Depository") or
with a nominee for the Depository identified in the applicable Prospectus
Supplement and will be registered in the name of the Depository or a nominee
thereof. In such a case one or more Global Securities will be issued in a
denomination or aggregate denominations equal to the portion of the aggregate
principal amount of outstanding Debt Securities of the series to be represented
by such Global Security or Securities. Unless and until it is exchanged in whole
or in part for Debt Securities in definitive certificated form, a Global
Security may be transferred, in whole but not in part, only to another nominee
of the Depository for such series, or to a successor Depository for such series
selected or approved by the Company, or to a nominee of such successor
Depository. (Section 2.5).
The specific depository arrangement with respect to any series of Debt
Securities to be represented by a Global Security will be described in the
applicable Prospectus Supplement. The Company expects that the following
provisions will apply to depository arrangements.
Upon the issuance of any Global Security, and the deposit of such Global
Security with or on behalf of the Depository for such Global Security, the
Depository will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by such Global
Security to the accounts of institutions ("participants") that have accounts
with the Depository or its nominee. The accounts to be credited will be
designated by the underwriters or agents engaging in the distribution of such
Debt Securities or by the Company, if such Debt Securities are offered and sold
directly by the Company. Ownership of beneficial interests in a Global Security
will be limited to participants or persons that may hold interests through
participants. Ownership of beneficial interests by participants in such Global
Security will be shown on, and the transfer of such beneficial interests will be
effected only through, records maintained by the Depository for such Global
Security or by its nominee. Ownership of beneficial interests in such Global
Security by persons that hold through participants will be shown on, and the
transfer of such beneficial interests within such participants will be effected
only through, records maintained by such participants. The laws of some
jurisdictions may require that certain purchasers of securities take physical
delivery of such securities in certificated form. The foregoing limitations and
such laws may impair the ability to own, pledge or transfer beneficial interests
in such Global Securities.
So long as the Depository for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Unless otherwise specified in the applicable Prospectus Supplement
and except as specified below, owners of beneficial interests in such Global
Security will not be entitled to have Debt Securities of the series represented
by such Global Security registered in their names, will not receive or be
entitled to receive physical delivery of Debt Securities of such series in
certificated form and will not be considered the holders thereof for any
purposes under the Indenture. Accordingly, each person owning a
7
beneficial interest in such Global Security must rely on the procedures of the
Depository and, if such person is not a participant, on the procedures of the
participant through which such person owns its interest, to exercise any rights
of a holder under the Indenture. The Company understands that, under existing
industry practices, if the Company requests any action of holders or an owner of
a beneficial interest in such Global Security desires to give any notice or take
any action a holder is entitled to give or take under the Indenture, the
Depository would authorize the participants to give such notice or take such
action, and participants would authorize beneficial owners owning through such
participants to give such notice or take such action or would otherwise act upon
the instructions of beneficial owners owning through them.
Unless otherwise specified in the applicable Prospectus Supplement, payments
with respect to principal, premium, if any, and interest, if any, on Debt
Securities represented by a Global Security registered in the name of a
Depository or its nominee will be made to such Depository or its nominee, as the
case may be, as the registered owner of such Global Security.
The Company expects that the Depository for any Debt Securities represented
by a Global Security, upon receipt of any payment of principal, premium or
interest in respect of such Global Security, will immediately credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Security
as shown on the records of such Depository. The Company also expects that
payments by participants to owners of beneficial interests in such Global
Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers registered in "street names", and will be the
responsibility of such participants. None of the Company, the Trustee or any
agent of the Company or the Trustee shall have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of a Global Security, or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
Unless otherwise specified in the applicable Prospectus Supplement, if the
Depository for any Debt Securities represented by a Global Security is at any
time unwilling or unable to continue as Depository or ceases to be registered or
in good standing under the Exchange Act and a successor Depository is not
appointed by the Company within 90 days after the Company receives notice or
becomes aware of such condition, the Company will issue such Debt Securities in
definitive certificated form in exchange for such Global Security. In addition,
the Company may at any time and in its sole discretion determine not to have any
of the Debt Securities of a series represented by one or more Global Securities
and, in such event, will issue Debt Securities of such series in definitive
certificated form in exchange for all of the Global Security or Securities
representing such Debt Securities. (Section 2.5).
PAYMENT OF ADDITIONAL AMOUNTS
The Company will agree that any amounts to be paid by the Company with
respect to the Debt Securities will be paid without deduction or withholding for
any and all present and future taxes, levies, imposts or other governmental
charges whatsoever imposed, assessed, levied or collected by or for the account
of the Republic of Panama (or by or for the account of the jurisdiction of
incorporation (other than the United States) of a successor corporation to the
Company, to the extent that such taxes first become applicable as a result of
the successor corporation becoming the obligor on the Debt Securities) or any
political subdivision or taxing authority thereof or therein ("Panamanian
Taxes") or, if deduction or withholding of any Panamanian Taxes shall at any
time be required by the Republic of Panama (or the jurisdiction of incorporation
(other than the United States) of a successor corporation to the Company) or any
such subdivision or authority, the Company will (subject to compliance by the
holders or beneficial owners of the relevant Debt Securities with any relevant
administrative requirements) pay such additional amounts ("Additional Amounts")
in respect of principal, premium, if any, interest, if any, and sinking fund or
analogous payments, if any, as may be necessary in order that the
8
net amounts paid to the holders of the Debt Securities or the Trustee under the
Indenture, as the case may be, after such deduction or withholding, shall equal
the respective amounts of principal, premium, if any, interest, if any, and
sinking fund or analogous payments, if any, as specified in the Debt Securities
to which such holders or the Trustee are entitled; provided, however, that the
foregoing shall not apply to (i) any present or future Panamanian Taxes which
would not have been so imposed, assessed, levied or collected but for the fact
that the holder or beneficial owner of the relevant Debt Security being or
having been a domiciliary, national or resident of, or engaging or having been
engaged in business or maintaining or having maintained a permanent
establishment or being or having been physically present in, the Republic of
Panama (or the jurisdiction of incorporation of a successor corporation to the
Company) or such political subdivision or otherwise having or having had some
connection with the Republic of Panama (or the jurisdiction of incorporation of
a successor corporation to the Company) or such political subdivision other than
the holding or ownership of a Debt Security, or the collection of principal of
and interest, if any, on, or the enforcement of, a Debt Security, (ii) any
present or future Panamanian Taxes which would not have been so imposed,
assessed, levied or collected but for the fact that, where presentation is
required, the relevant Debt Security was presented more than thirty days after
the date such payment became due or was provided for, whichever is later, or
(iii) any present or future Panamanian Taxes which would not have been so
imposed, assessed, levied or collected but for the failure to comply with any
certification, identification or other reporting requirements concerning the
nationality, residence, identity or connection with the Republic of Panama (or
the jurisdiction of incorporation of a successor corporation to the Company) or
any political subdivision thereof of the holder or beneficial owner of the
relevant Debt Security, if compliance is required by statute or by rules or
regulations of the Republic of Panama (or the jurisdiction of incorporation of a
successor corporation to the Company) or such political subdivision as a
condition to relief or exemption from Panamanian Taxes. The provisions described
in (i) through (iii) above are referred to herein as "Excluded Taxes." The
Company or any successor to the Company, as the case may be, will indemnify and
hold harmless each holder of the Debt Securities and upon written request
reimburse each holder for the amount of (i) any Panamanian Taxes levied or
imposed and paid by such holder of the Debt Securities (other than Excluded
Taxes) as a result of payments made with respect to the Debt Securities, (ii)
any liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, and (iii) any Panamanian Taxes with respect to payment of
Additional Amounts or any reimbursement pursuant to this sentence. The Company
or any successor to the Company, as the case may be, will also (1) make such
withholding or deduction and (2) remit the full amount deducted or withheld to
the relevant authority in accordance with applicable law. The Company or any
successor to the Company, as the case may be, will furnish the Trustee within 30
days after the date the payment of any Panamanian Taxes is due pursuant to
applicable law, certified copies of tax receipts evidencing such payment by the
Company or any successor to the Company, as the case may be, which the Trustee
will forward to the holders of the Debt Securities.
At least 30 days prior to each date on which any payment under or with
respect to the Debt Securities is due and payable, if the Company will be
obligated to pay Additional Amounts with respect to such payments, the Company
will deliver to the Trustee an officers' certificate stating the fact that such
Additional Amounts will be payable, stating the amounts so payable and setting
forth such other information as may be necessary to enable the Trustee to pay
such Additional Amounts to holders of the Debt Securities on the payment date.
Whenever in the Indenture or any Debt Securities there is mentioned, in any
context, the payment of the principal, premium, if any, or interest, or sinking
fund or analogous payment, if any, in respect of such Debt Securities or overdue
principal or overdue interest or overdue sinking fund or analogous payment, such
mention shall be deemed to include mention of the payment of Additional Amounts
provided for herein to the extent that, in such context, Additional Amounts are,
were or would be payable in respect thereof pursuant to the provisions of this
Section and express mention thereof in any
9
provisions hereof shall not be construed as excluding Additional Amounts in
those provisions hereof where such express mention is not made (if applicable).
(Section 10.5).
REDEMPTION OR ASSUMPTION OF DEBT SECURITIES UNDER CERTAIN CIRCUMSTANCES
Unless otherwise specified in the Prospectus Supplement with respect to any
series of Debt Securities, if as the result of any change in or any amendment to
the laws, including any regulations thereunder and any applicable double
taxation treaty or convention, of the Republic of Panama (or the jurisdiction of
incorporation (other than the United States) of a successor corporation to the
Company), or of any political subdivision or taxing authority thereof or therein
affecting taxation, or any change in an application or interpretation of such
laws, including any applicable double taxation treaty or convention, which
change, amendment, application or interpretation (the "Change") becomes
effective on or after the original issuance date of such series (or, in certain
circumstances, such later date on which a corporation becomes a successor
corporation to the Company), it is determined by the Company based upon an
opinion of independent counsel of recognized standing that (i) the Company would
be required to pay Additional Amounts in respect of principal, premium, if any,
interest, if any, or sinking fund or analogous payments, if any, on the next
succeeding date for the payment thereof, or (ii) any taxes would be imposed
(whether by way of deduction, withholding or otherwise) by the Republic of
Panama (or the jurisdiction of incorporation (other than the United States) of a
successor corporation to the Company) or by any political subdivision or taxing
authority thereof or therein, upon or with respect to any principal, premium, if
any, interest, if any, or sinking fund or analogous payments, if any, then the
Company may, at its option, on giving not less than 30 nor more than 60 days'
notice (which shall be irrevocable) redeem such series of Debt Securities in
whole, but not in part, at any time (except in the case of Debt Securities of a
series having a variable rate of interest, which may be redeemed only on an
interest payment date) at a redemption price equal to 100% of the principal
amount thereof plus accrued interest to the date fixed for redemption (except in
the case of outstanding original issue discount Debt Securities which may be
redeemed at the redemption price specified by the terms of each series of such
Debt Securities); provided, however, that (i) no notice of redemption may be
given more than 90 days prior to the earliest date on which the Company would be
obligated to pay such Additional Amounts or such tax would be imposed, as the
case may be, and (ii) at the time that such notice of redemption is given, such
obligation to pay Additional Amounts or such tax, as the case may be, remains in
effect. For purposes of the foregoing, all references to the Company in this
paragraph shall include any successor corporation thereto. (Section 11.8).
MERGER AND CONSOLIDATION
The Company may not consolidate with or merge into any other Person or
transfer or lease all or substantially all of its assets to any Person unless,
after giving effect to such transaction, no Event of Default, and no event which
after notice or lapse of time or both would become an Event of Default, shall
have occurred and be continuing and the Person formed by such consolidation or
into which the Company is merged or the Person which acquires or leases all or
substantially all of its assets assumes all the obligations of the Company under
the Debt Securities and the Indenture. (Article 8).
EVENTS OF DEFAULT AND NOTICE THEREOF
Except as may otherwise be provided in an indenture supplemental to the
Indenture, the following events in respect of a particular series of Indenture
Securities are defined in the Indenture as "Events of Default": (a) failure to
pay interest (including Additional Amounts) for 30 days after becoming due; (b)
failure to pay the principal or premium, if any, when due at maturity, on
redemption or otherwise; (c) failure to make a sinking fund payment for five
days after becoming due; (d) failure to perform any other covenants for 60 days
after written notice as provided in the Indenture; (e) failure to pay when due
the principal of, or acceleration of, an indebtedness for money borrowed by the
Company in excess of
10
$20 million, if such indebtedness is not discharged, or such acceleration is not
annulled, within 30 days after written notice as provided in the Indenture; (f)
certain events of bankruptcy, insolvency or reorganization; and (g) any other
Event of Default provided with respect to Securities of such series (as
indicated in the Prospectus Supplement relating to such series of Securities).
(Section 5.1).
If an Event of Default in respect of a particular series of Indenture
Securities outstanding occurs and is continuing, either the Trustee or the
holders of at least 25% in aggregate principal amount of the Indenture
Securities outstanding of such series may declare the principal amount (or, if
the Indenture Securities of such series are Original Issue Discount Securities
(as defined in the Indenture), such portion of the principal amount as may be
specified in the terms of such series) of all of the Indenture Securities of
such series to be due and payable immediately. At any time after such a
declaration of acceleration in respect of a particular series of Indenture
Securities has been made, but before a judgment or decree for the payment of
money due upon acceleration has been obtained by the Trustee, the holders of a
majority in aggregate principal amount of the Indenture Securities outstanding
of such series may, under certain circumstances, rescind and annul such
declaration and its consequences if all Events of Default in respect of the
Indenture Securities of such series, other than the non-payment of principal due
solely by such declaration of acceleration, have been cured or waived as
provided in the Indenture. (Section 5.2).
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of a default in respect of a particular series of Indenture
Securities, give the holders of such series notice of all uncured defaults known
to it (the term "default" to include the events specified above without grace
periods); provided that, except in the case of default in the payment of the
principal of, or premium, if any, on or interest on any of the Indenture
Securities of such series, or in the payment of any sinking fund installment
with respect to the Indenture Securities of such series, the Trustee shall be
protected in withholding such notice if it in good faith determines that the
withholding of such notice is in the interests of the holders of such series.
(Section 6.2).
Pursuant to the terms of the Indenture, the Company is required to furnish
to the Trustee annually a statement of certain officers of the Company stating
whether or not to the best of their knowledge the Company is in default in
respect of any series of Indenture Securities in the performance and observance
of the terms of the Indenture and, if the Company is in default, specifying such
default and the nature thereof. (Section 10.4).
The Indenture provides that the holders of a majority in aggregate principal
amount of all Indenture Securities of a particular series then outstanding will
have the right to waive certain defaults in respect of such series and, subject
to certain limitations, to direct the time, method and place of conducting any
proceedings for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee. (Sections 5.12 and 5.13). The Indenture provides
that, in case an Event of Default in respect of a particular series of Indenture
Securities shall occur (which shall not have been cured or waived), the Trustee
will be required to exercise such of its rights and powers under the Indenture,
and to use the degree of care and skill in their exercise, that a prudent man
would exercise or use in the conduct of his own affairs, but otherwise need only
perform such duties as are specifically set forth in the Indenture. (Section
6.1). Subject to such provisions, the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request of any
of the holders of such series unless they shall have offered to the Trustee
reasonable security or indemnity. (Section 6.3).
No holder of any series of Indenture Securities will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless such holder shall have previously given to the Trustee
written notice of a continuing Event of Default and unless the holders of at
least 25% in aggregate principal amount of the outstanding Indenture Securities
of such series shall have made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as trustee, and the
Trustee shall not have received from the holders of a majority in aggregate
principal amount of
11
the outstanding Indenture Securities of such series a direction inconsistent
with such request and shall have failed to institute such proceeding within 60
days. (Section 5.7). However, such limitations do not apply to a suit instituted
by a holder of an Indenture Security for enforcement of payment of the principal
of and premium, if any, or interest on such Indenture Security on or after the
respective due dates expressed in such Indenture Security. (Section 5.8).
MODIFICATION OF THE INDENTURE
With certain exceptions, the Indenture, the rights and obligations of the
Company and the rights of the holders of a particular series may be modified by
the Company with the consent of the holders of not less than 66 2/3% in
aggregate principal amount of the Indenture Securities of such series then
outstanding, but no such modification may be made which would (i) change the
stated maturity of the principal of (or premium, if any, on) or interest on
(including any Additional Amounts) any Indenture Security of such series, or
reduce the principal amount thereof, or reduce the rate of interest thereon, or
reduce the amount of principal of an Original Issue Discount Security payable
upon acceleration of the maturity thereof, without the consent of the holder of
each Indenture Security of such series so affected; or (ii) reduce the
above-stated percentage of Indenture Securities of such series, the consent of
the holders of which is required to modify or alter the Indenture, without the
consent of the holders of all Indenture Securities of such series then
outstanding. (Section 9.2).
TRUSTEE
The Trustee may resign or be removed with respect to one or more series of
Indenture Securities and a successor Trustee may be appointed to act with
respect to such one or more series. (Section 6.10). In the event that there
shall be two or more persons acting as Trustee with respect to different series
of Indenture Securities, each such Trustee shall be a trustee of a trust or
trusts under the Indenture separate and apart from the trust or trusts
administered by any other such Trustee, and any action described herein to be
taken by the "Trustee" may then be taken by each such Trustee with respect to,
and only with respect to, the one or more series of Indenture Securities for
which it is acting as Trustee. (Section 6.11).
CONCERNING THE TRUSTEE
First Trust, Trustee under the Indenture, also acts as indenture trustee for
the Company's 4 1/2% Convertible Subordinated Notes Due July 1, 1997 and will
act as indenture trustee for the Company's convertible debt securities issuable
under an Indenture dated as of November 15, 1993 between First Trust and the
Company.
REPORTS
The Company publishes annual reports containing certified financial
statements. Copies of such reports will be available upon request.
12
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Debt Securities, Warrants
to purchase or sell debt securities of or guaranteed by the United States
("Government Debt Securities"), Warrants to purchase or sell foreign currencies,
currency units or units of a currency index or currency basket, Warrants to
purchase or sell units of a stock index or a stock basket and Warrants to
purchase or sell a commodity or a commodity index. The Warrants offered pursuant
to this Prospectus will be limited to $450,000,000 aggregate public offering
price. Warrants may be issued independently or together with any Debt Securities
offered by any Prospectus Supplement and may be attached to or separate from
such Debt Securities. The Warrants will be settled either through physical
delivery or through payment of a cash settlement value as set forth herein and
in any applicable Prospectus Supplement. The Warrants will be issued under
warrant agreements (each a "Warrant Agreement") to be entered into between the
Company and a bank or trust company, as warrant agent (the "Warrant Agent"), all
as set forth in the Prospectus Supplement relating to the particular issue of
Warrants being offered pursuant thereto. The Warrant Agent will act solely as an
agent of the Company in connection with the Warrant certificates and will not
assume any obligation or relationship of agency or trust for or with any holders
of Warrant certificates or beneficial owners of Warrants. The following
summaries of certain provisions of the forms of Warrant Agreement do not purport
to be complete and are subject to, and are qualified in their entirety by
reference to the provisions of the forms of Warrant Agreement (including the
forms of Warrant certificates), copies of which are filed as an exhibit to the
Registration Statement.
The particular terms of the Warrants offered by any Prospectus Supplement
(the "Offered Warrants"), as well as any modification or addition to the general
terms of the Warrants as herein described, which may be applicable to any
Offered Warrants are described in such Prospectus Supplement relating to such
Offered Warrants and will be set forth in a filing with the Commission.
Accordingly, for a description of the terms of any particular Offered Warrants,
reference must be made to both the Prospectus Supplement relating to such
Offered Warrants and to the description of the Warrants set forth in this
Prospectus.
GENERAL
The Prospectus Supplement will describe the following terms of the Offered
Warrants (to the extent such terms are applicable to such Warrants): (1) the
title of such Offered Warrants; (2) the aggregate number of such Offered
Warrants; (3) whether the Offered Warrants are for the purchase or sale of Debt
Securities, Government Debt Securities, currencies, currency units, composite
currencies, currency indices or currency baskets, stock indices, stock baskets,
commodities, commodity indices or such other index or reference as therein
described; (4) the price or prices at which such Offered Warrants will be
offered; (5) the currency or currencies, including composite currencies or
currency units, in which the price of such Offered Warrants may be payable; (6)
the date, if any, on and after which such Offered Warrants and the related Debt
Securities will be separately transferable; (7) the date on which the right to
exercise such Offered Warrants shall commence, and the date on which such right
shall expire; (8) the maximum or minimum number of such Offered Warrants which
may be exercised at any time; (9) a discussion of material federal income tax
considerations, if any; (10) the terms, procedures and limitations relating to
the exercise of such Offered Warrants; and (11) any other terms of the Offered
Warrants, including any terms which may be required or advisable under United
States laws or regulations.
If the Offered Warrants are to purchase Debt Securities, the Prospectus
Supplement will also describe (a) the designation, aggregate principal amount,
currency, currency unit, composite currency or currency basket of denomination
and other terms of the Debt Securities purchasable upon exercise of the Offered
Warrants; (b) the designation and terms of the Debt Securities with which the
Offered Warrants are issued and the number of Offered Warrants issued with each
such Debt Security; (c) the date on and after which the Offered Warrants and the
related Debt Securities will be separately
13
transferable, if any; and (d) the principal amount of Debt Securities
purchasable upon exercise of each Offered Warrant and the price at which and
currency, currency unit, composite currency or currency basket in which such
principal amount of Debt Securities may be purchased upon such exercise.
If the Offered Warrants are to purchase or sell Government Debt Securities
or a foreign currency, currency unit, composite currency, currency index or
currency basket, such Offered Warrants will be listed on a national securities
exchange and the Prospectus Supplement will describe the amount and designation
of the Government Debt Securities or currency, currency unit, composite
currency, currency index or currency basket, as the case may be, subject to each
Offered Warrant, whether such Offered Warrants are to purchase or sell the
Government Debt Securities, foreign currency, currency unit, composite currency,
currency index or currency basket, whether such Offered Warrants provide for
cash settlement or delivery of the Government Debt Securities or foreign
currency, currency unit, composite currency, currency index or currency basket
upon exercise, and the national securities exchange on which the Offered
Warrants will be listed.
If the Offered Warrants are Offered Warrants to purchase or sell a stock
index or a stock basket, such Offered Warrants will provide for payment of an
amount in cash determined by reference to increases or decreases in such stock
index or stock basket and will be listed on a national securities exchange, and
the Prospectus Supplement will describe the terms of the Offered Warrants,
whether such warrants are to purchase or sell the stock index or stock basket,
the stock index or stock basket covered by the Offered Warrants and the market
to which such stock index or stock basket relates, whether such warrants are to
purchase or sell the stock index or stock basket and the national securities
exchange on which the Offered Warrants will be listed.
If the Offered Warrants are Offered Warrants to purchase or sell a commodity
or commodity index, such Offered Warrants will provide for cash settlement or
delivery of the particular commodity or commodities and such Offered Warrants
will be listed on a national securities exchange, and the Prospectus Supplement
will describe the terms of the Offered Warrants, the commodity or commodity
index covered by the Offered Warrants, whether such Offered Warrants are to
purchase or sell the commodity or commodity index, whether such Offered Warrants
provide for cash settlement or delivery of the commodity or commodity index, the
market, if any, to which such commodity or commodity index relates and the
national securities exchange on which the Warrants will be listed.
Warrant certificates may be exchanged for new Warrant certificates of
different denominations, may be presented for registration of transfer, and may
be exercised at the corporate trust office of the Warrant Agent or any other
office indicated in the Prospectus Supplement. Warrants to purchase or sell
Government Debt Securities or a foreign currency, currency unit, composite
currency, currency index or currency basket, and Warrants to purchase stock
indices or stock baskets or commodities or commodity indices, may be issued in
the form of a single Global Warrant Certificate, registered in the name of the
nominee of the depository of the Warrants, or may initially be issued in the
form of definitive certificates that may be exchanged, on a fixed date, or on a
date or dates selected by the Company, for interests in a Global Warrant
Certificate, as set forth in the applicable Prospectus Supplement.
Prior to the exercise of their Warrants, holders of Warrants to purchase
Debt Securities will not have any of the rights of holders of the Debt
Securities purchasable upon such exercise, including the right to receive
payments of principal of, premium, if any, or interest, if any, on the Debt
Securities purchasable upon such exercise or to enforce covenants in the
Indenture.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder to purchase such principal amount of
Debt Securities or purchase or sell such amount of Government Debt Securities or
of such currency, currency unit, composite currency, currency index or currency
basket, stock index or stock basket, commodity or commodities at such exercise
price, or receive such settlement value in respect of such amount of
14
Government Debt Securities or of such currency, currency unit, composite
currency, currency index or currency basket, stock index or stock basket,
commodity or commodity index, as shall in each case be set forth in or
calculable from, the Prospectus Supplement relating to such Warrants or as
otherwise set forth in the Prospectus Supplement. Warrants may be exercised at
any time up to 3:00 P.M. New York time on the date set forth in the Prospectus
Supplement relating to such Warrants or as may be otherwise set forth in the
Prospectus Supplement. After such time on that date (or such later date to which
such date may be extended by the Company), unexercised Warrants will become
void.
Subject to any restrictions and additional requirements that may be set
forth in the Prospectus Supplement relating thereto, Warrants may be exercised
by delivery to the Warrant Agent of the Warrant certificate evidencing such
Warrants properly completed and duly executed and of payment as provided in the
Prospectus Supplement of the amount required to purchase the Debt Securities, or
(except in the case of Warrants providing for cash settlement) payment for or
delivery of the Government Debt Securities or currency, currency unit, composite
currency, currency index, currency basket, stock index, stock basket, commodity
or commodities index as the case may be, purchased or sold upon such exercise.
Warrants will be deemed to have been exercised upon receipt of such Warrant
certificate and any such payment, if applicable, at the corporate trust office
of the Warrant Agent or any other office indicated in the Prospectus Supplement
and the Company will, as soon as practicable thereafter, issue and deliver the
Debt Securities purchasable upon such exercise, or purchase or sell such
Government Debt Securities or currency, currency unit, composite currency,
currency index or currency basket, stock index or stock basket, commodity or
commodities or pay the settlement value in respect of such Warrants. If fewer
than all of the Warrants represented by such Warrant certificate are exercised,
a new Warrant certificate will be issued for the remaining amount of the
Warrants.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities and Warrants to or through
underwriters, and also may sell the Debt Securities and Warrants directly to one
or more other purchasers or through agents.
The Prospectus Supplement will set forth the terms of the offering of the
particular series or issuance of Debt Securities and/or Warrants to which such
Prospectus Supplement relates, including (i) the name or names of any
underwriters or agents with whom the Company has entered into arrangements with
respect to the sale of such series of Debt Securities or Warrants, (ii) the
initial public offering or purchase price of such series of Debt Securities or
Warrants, (iii) any underwriting discounts, commissions and other items
constituting underwriters' compensation from the Company and any other
discounts, concessions or commissions allowed or reallowed or paid by any
underwriters to other dealers, (iv) any commissions paid to any agents, (v) the
net proceeds to the Company, and (vi) the securities exchanges, if any, on which
such series of Debt Securities or Warrants will be listed.
Unless otherwise set forth in the Prospectus Supplement relating to a
particular series of Debt Securities or Warrants, the obligations of the
underwriters to purchase such series of Debt Securities or issuance of Warrants
will be subject to certain conditions precedent and each of the underwriters
with respect to such series of Debt Securities or Warrants will be obligated to
purchase all of the Debt Securities of such series or such Offered Warrants
allocated to it if any such Debt Securities or such Offered Warrants are
purchased. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
The Debt Securities and Warrants may be offered and sold by the Company
directly or through agents designated by the Company from time to time. Unless
otherwise indicated in the applicable Prospectus Supplement, any such agent or
agents will be acting on a best efforts basis for the period of its or their
appointment. Any agent participating in the distribution of the Debt Securities
and Warrants may be deemed to be an "underwriter", as that term is defined in
the Act, of the Debt Securities and Warrants so offered and sold. The Debt
Securities and Warrants also may be sold to dealers at the applicable price to
the public set forth in the Prospectus Supplement relating to a particular
series of
15
Debt Securities or Warrants who later resell to investors. Such dealers may be
deemed to be "underwriters" within the meaning of the Act.
If so indicated in the Prospectus Supplement relating to a particular series
of Debt Securities or Warrants, the Company will authorize underwriters or
agents to solicit offers by certain institutions to purchase Debt Securities of
such series or such Offered Warrants from the Company pursuant to delayed
delivery contracts providing for payment and delivery at a future date. Such
contracts will be subject only to those conditions set forth in the applicable
Prospectus Supplement and such Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Underwriters and agents may be entitled, under agreements entered into with
the Company, to indemnification by the Company against certain civil
liabilities, including liabilities under the Act.
VALIDITY OF SECURITIES
The validity of the Debt Securities and Warrants will be passed upon for the
Company with respect to New York law by Paul, Weiss, Rifkind, Wharton &
Garrison, New York, New York and for any underwriters or agents with respect to
New York law by Sullivan & Cromwell, New York, New York. The validity of the
Debt Securities and Warrants with respect to Panamanian law will be passed upon
by Tapia Linares y Alfaro, Panama City, Republic of Panama. James M. Dubin, a
partner of Paul, Weiss, Rifkind, Wharton & Garrison, is the sole stockholder of
the trustee of the B Trust. Paul, Weiss, Rifkind, Wharton & Garrison also serves
as counsel to Micky Arison. See "Certain Considerations-- Control by Principal
Shareholders".
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Annual Report on Form 10-K/A #1 for the year ended November 30, 1994 have been
so incorporated in reliance on the report of Price Waterhouse LLP, independent
certified public accountants, given on the authority of said firm as experts in
auditing and accounting.
16
================================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS
NOR ANY SALE MADE HEREUNDER OR THERE UNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
-------------------
TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUPPLEMENT
The Company........................... S-2
Use of Proceeds....................... S-2
Capitalization........................ S-3
Summary Financial Data................ S-4
Description of Notes.................. S-5
Underwriting.......................... S-6
Validity of the Notes................. S-6
[CAPTION]
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference............................. 2
The Company........................... 3
Certain Considerations................ 3
Use of Proceeds....................... 4
Ratio of Earnings to Fixed Charges.... 5
Description of Debt Securities........ 5
Description of Warrants............... 13
Plan of Distribution.................. 15
Validity of Securities................ 16
Experts............................... 16
================================================================================
[logo]
$100,000,000
CARNIVAL CORPORATION
7.05% NOTES DUE MAY 15, 2005
-------------------
PROSPECTUS SUPPLEMENT
-------------------
MERRILL LYNCH & CO.
MAY 17, 1995
================================================================================
