AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 29, 2001
REGISTRATION STATEMENT NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CARNIVAL CORPORATION
(Exact name of registrant as specified in its charter)
REPUBLIC OF PANAMA 4400 59-1562976
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
3655 N.W. 87TH AVENUE
MIAMI, FLORIDA 33178-2428
(305) 599-2600
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive office)
------------------------------
ARNALDO PEREZ, ESQ.
GENERAL COUNSEL
CARNIVAL CORPORATION
3655 N.W. 87TH AVENUE
MIAMI, FLORIDA 33178-2428
(305) 599-2600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
WITH COPIES TO:
JOHN C. KENNEDY, ESQ.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-6064
(212) 373-3000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 of the Securities Act of 1933,
other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF THE REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES REGISTERED REGISTERED(1) PER SECURITY PRICE REGISTRATION FEE
Liquid Yield Option-TM- Notes due 2021......... 1,051,175,000 47.566% 500,001,900 119,501
Common Stock................................... 17,446,000(2) (3) -0-(3) -0-(3)
(-TM-) Trademark of Merrill Lynch & Co., Inc.
(1) The LYONs were issued at an original price of $475.66 per $1,000 principal
amount at maturity, which represents an aggregate initial issue price of
$500,001,900 and an aggregate principal amount at maturity of
$1,051,175,000.
(2) Includes the shares of common stock initially issuable upon conversion of
the LYONs at the rate of 16.5964 shares of common stock per $1,000 principal
amount at maturity of LYONs. Pursuant to Rule 416 under the Securities Act,
such number of shares of common stock registered hereby shall also include
an indeterminate number of additional shares of common stock that may be
issued from time to time upon conversion of the LYONs by reason of
adjustment of the conversion price or upon repurchase or redemption, in each
case in certain circumstances outlined in the prospectus. See "Description
of LYONs--Conversion Rights."
(3) Pursuant to Rule 457(i) under the Securities Act, there is no filing fee
with respect to the shares of common stock issuable upon the conversion of
the LYONs because no additional consideration will be received in connection
with the exercise of the conversion privilege.
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING SECURITYHOLDERS IDENTIFIED IN THIS PROSPECTUS MAY NOT SELL THESE
SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED NOVEMBER 29, 2001
CARNIVAL CORPORATION
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$1,051,175,000 LIQUID YIELD OPTION-TM- NOTES DUE 2021
(ZERO COUPON--SENIOR)
17,446,000 SHARES OF COMMON STOCK
------------------
This prospectus relates to $1,051,175,000 aggregate principal amount at maturity
of our Liquid Yield Option-TM- Notes due 2021 (the "LYONs") held by certain
selling securityholders. The LYONs may be sold from time to time by or on behalf
of the selling securityholders named in this prospectus or in supplements to
this prospectus.
This prospectus also relates to 17,446,000 shares of our common stock issuable
upon conversion of the LYONs held by certain selling securityholders, plus such
additional indeterminate number of shares as may become issuable upon conversion
of the LYONs by reason of adjustment to the conversion price in certain
circumstances.
The selling securityholders may sell all or a portion of the LYONs in market
transactions, negotiated transactions or otherwise and at prices which will be
determined by the prevailing market price for the LYONs or in negotiated
transactions. The selling securityholders may also sell all or a portion of the
shares of common stock from time to time on the New York Stock Exchange, in
negotiated transactions or otherwise, and at prices which will be determined by
the prevailing market price for the shares or in negotiated transactions. The
selling securityholders will receive all of the proceeds from the sale of the
LYONs and the common stock. We will not receive any proceeds from the sale of
LYONs or common stock by the selling securityholders.
Our common stock is traded on the New York Stock Exchange under the symbol CCL.
On November 28, 2001, the last reported sales price of our common stock was
$25.47 per share. There is no public market for the LYONs, and we do not intend
to apply for listing of them or any securities exchange or to seek approval for
quotation of them through any automated quotation system.
WE URGE YOU TO CAREFULLY READ THE "RISK FACTORS" SECTION BEGINNING ON PAGE 11,
WHERE WE DESCRIBE SPECIFIC RISKS ASSOCIATED WITH THESE SECURITIES, BEFORE YOU
MAKE YOUR INVESTMENT DECISION.
Neither the Securities and Exchange Commission, nor any state securities
commission, has approved or disapproved of these LYONs or common stock or passed
upon the adequacy or accuracy of this prospectus. Any representation to the
contrary is a criminal offense.
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(-TM-) Trademark of Merrill Lynch & Co., Inc.
The date of this prospectus is November , 2001.
TABLE OF CONTENTS
PAGE
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Where You Can Find More Information......................... 2
Incorporation of Documents by Reference..................... 3
Summary..................................................... 4
Securities Being Offered.................................. 6
Risk Factors................................................ 10
Risks Related to our Business............................. 10
Risks Relating to our Corporate Structure................. 12
Risks Relating to the LYONs and our Common Stock.......... 14
Special Note Regarding Forward-Looking Statements........... 14
Ratio of Earnings to Fixed Charges.......................... 16
Price Range of Common Stock and Dividends................... 16
Selected Consolidated Financial Data........................ 18
Capitalization.............................................. 19
Use of Proceeds............................................. 20
Selling Securityholders..................................... 20
Plan of Distribution........................................ 21
Description of LYONs........................................ 23
Description of Capital Stock................................ 41
Certain Panamanian and United States Federal Income Tax
Considerations............................................ 44
Experts..................................................... 47
Legal Matters............................................... 47
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WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934, and file reports, proxy statements and other information with the
SEC. We have also filed with the SEC a registration statement on Form S-3 to
register the LYONs and the underlying common stock. This prospectus, which forms
part of the registration statement, does not contain all of the information
included in that registration statement. For further information about Carnival
Corporation and the securities offered in this prospectus, you should refer to
the registration statement and its exhibits. You may read and copy any document
we file with the SEC at the SEC's Public Reference Room, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of these reports, proxy statements and
information may be obtained at prescribed rates from the Public Reference
Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for further information on the operation of the
Public Reference Room. In addition, the SEC maintains a web site that contains
reports, proxy statements and other information regarding registrants, such as
us, that file electronically with the SEC. The address of this web site is
http://www.sec.gov.
You should only rely on the information contained in this prospectus and
incorporated by reference therein.
2
INCORPORATION OF DOCUMENTS BY REFERENCE
We are incorporating by reference into this prospectus the documents listed
below and any other filings made by us with the SEC under Section 13(a), 13(c),
14 or 15(d) of the Exchange Act prior to the termination of the offering:
- Our Annual Report on Form 10-K for the fiscal year ended November 30,
2000.
- Our Quarterly Reports on Form 10-Q for the fiscal quarters ended February
28, 2001, May 31, 2001 and August 31, 2001.
- Our Current Reports on Form 8-K filed on December 21, 2000, February 26,
2001, April 27, 2001, June 29, 2001, September 21, 2001, October 19, 2001,
October 23, 2001, October 25, 2001 and October 29, 2001 with the SEC.
Any statement contained in this prospectus or in a document incorporated or
deemed to be incorporated by reference in this prospectus shall be deemed to be
modified or superseded for purposes of this prospectus to the extent that a
statement contained in this prospectus or in any other document subsequently
filed with the SEC which is or is deemed to be incorporated by reference in this
prospectus 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.
We will provide without charge to you, upon your written or oral request a
copy of any or all of the documents incorporated by reference in this
prospectus, not including the exhibits to these documents, unless such exhibits
are specifically incorporated by reference in these documents. Requests for such
copies should be directed to Investor Relations, Carnival Corporation, 3655 N.W.
87th Avenue, Miami, Florida 33178-2428. Except as provided above, no other
information, including information on our web site, is incorporated by reference
into this prospectus.
3
SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION INCLUDED ELSEWHERE OR INCORPORATED BY REFERENCE INTO THIS
PROSPECTUS. BECAUSE THIS IS A SUMMARY, IT MAY NOT CONTAIN ALL THE INFORMATION
THAT MAY BE IMPORTANT TO YOU. YOU SHOULD READ THE ENTIRE PROSPECTUS, AS WELL AS
THE INFORMATION INCORPORATED BY REFERENCE, BEFORE MAKING AN INVESTMENT DECISION.
SOME OF THE STATEMENTS IN THIS "SUMMARY" ARE FORWARD-LOOKING STATEMENTS. PLEASE
SEE "SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS" FOR MORE INFORMATION
REGARDING THESE STATEMENTS. IN THIS PROSPECTUS, UNLESS OTHERWISE STATED OR THE
CONTEXT OTHERWISE REQUIRES, THE TERMS "WE," "US" AND "OUR" REFER TO CARNIVAL
CORPORATION, A PANAMANIAN CORPORATION, AND ITS CONSOLIDATED SUBSIDIARIES.
CARNIVAL CORPORATION
We are the world's largest multiple-night cruise company based on the number
of passengers carried, revenues generated and available capacity. We offer a
broad range of cruise products, serving the contemporary cruise market through
Carnival Cruise Lines and Costa Cruises, the premium market through Holland
America Line and the luxury market through Cunard Line, Seabourn Cruise Line and
Windstar Cruises. In total, we own and operate 42 cruise ships with an aggregate
capacity of 58,342 passengers based on two passengers per cabin. The fifteen
Carnival Cruise Lines ships have an aggregate capacity of 31,122 passengers with
itineraries primarily in the Caribbean and the Mexican Riviera. The seven Costa
ships have an aggregate capacity of 9,276 passengers with itineraries primarily
in Europe, the Caribbean and South America. The ten Holland America ships have
an aggregate capacity of 13,348 passengers, with itineraries primarily in the
Caribbean, Europe and Alaska. Windstar operates four luxury, sail-powered ships
with an aggregate capacity of 756 passengers, primarily in the Caribbean, Europe
and Central America. The four Seabourn ships have an aggregate capacity of 1,382
passengers and the two Cunard ships have an aggregate capacity of 2,458
passengers, each with worldwide itineraries.
We have signed agreements with three shipyards providing for the
construction of additional cruise ships as set forth in the following table:
EXPECTED ESTIMATED TOTAL
SERVICE PASSENGER COST ($ IN
SHIP DATE (1) SHIPYARD CAPACITY (2) MILLIONS) (3)
---- --------- ------------------- ------------- ---------------
CARNIVAL CRUISE LINES
Carnival Pride................ 1/02 Masa-Yards (4) 2,124 $ 375
Carnival Legend............... 8/02 Masa-Yards (4) 2,124 375
Carnival Conquest............. 12/02 Fincantieri 2,974 500
Carnival Glory................ 8/03 Fincantieri 2,974 500
Carnival Miracle.............. 4/04 Masa-Yards (4) 2,124 375
Carnival Valor................ 11/04 Fincantieri (4) 2,974 500
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TOTAL CARNIVAL CRUISE LINES... 15,294 2,625
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HOLLAND AMERICA LINE
Zuiderdam..................... 11/02 Fincantieri (4) 1,848 410
Oosterdam..................... 7/03 Fincantieri (4) 1,848 410
Newbuild...................... 2/04 Fincantieri (4) 1,848 410
Newbuild...................... 10/04 Fincantieri (4) 1,848 410
Newbuild...................... 6/05 Fincantieri (4) 1,848 410
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TOTAL HOLLAND AMERICA LINE.... 9,240 2,050
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4
EXPECTED ESTIMATED TOTAL
SERVICE PASSENGER COST ($ IN
SHIP DATE (1) SHIPYARD CAPACITY (2) MILLIONS) (3)
---- --------- ------------------- ------------- ---------------
COSTA CRUISES
Costa Mediterranea............ 7/03 Masa-Yards (5) 2,114 340
Costa Fortuna................. 1/04 Fincantieri (6) 2,720 395
Costa Magica.................. 12/04 Fincantieri (6) 2,720 395
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TOTAL COSTA CRUISES........... 7,554 1,130
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CUNARD LINE
Queen Mary 2.................. 12/03 Chantiers de 2,620 780
l'Atlantique (4)
------ ------
TOTAL CUNARD LINE............. 2,620 780
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TOTAL......................... 34,708 $6,585
====== ======
--------------------------
(1) The expected service date is the date the ship is currently expected to
begin revenue generating activities.
(2) In accordance with cruise industry practice, passenger capacity is
calculated based on two passengers per cabin even though some cabins can
accommodate three or four passengers.
(3) Estimated total cost of the completed ship includes the contract price with
the shipyard, design and engineering fees, capitalized interest, various
owner supplied items and construction oversight costs.
(4) These construction contracts are denominated in either German marks, Italian
lira or euros and have been fixed into U.S. dollars through the utilization
of forward foreign currency contracts.
(5) This construction contract is denominated in German marks which has a fixed
exchange rate with Costa's functional currency, which is the Italian lira.
The estimated total cost has been translated into U.S. dollars using the
August 31, 2001 exchange rate.
(6) These construction contracts are denominated in Italian lira, and the
estimated total costs have been translated into U.S. dollars using the
August 31, 2001 exchange rate.
In connection with the ships under contract for construction, we have paid
approximately $547 million through August 31, 2001, and we anticipate paying
approximately $940 million during the twelve months ending August 31, 2002 and
approximately $5.1 billion thereafter.
We also operate a tour business through Holland America Tours, which markets
sightseeing tours both separately and as part of its cruise/tour packages.
Holland America Tours operates 12 hotels in Alaska and the Canadian Yukon, two
luxury dayboats offering tours to the glaciers of Alaska and the Yukon River,
over 300 motor coaches used for sightseeing and charters in the states of
Washington and Alaska and 13 private domed rail cars which are run on the Alaska
railroad between Anchorage and Fairbanks.
We were incorporated under the laws of the Republic of Panama in November
1974. Our executive offices are located at 3655 N.W. 87th Avenue, Miami, Florida
33178-2428, telephone number (305) 599-2600.
5
SECURITIES BEING OFFERED
This prospectus covers the sale of $1,051,175,000 aggregate principal amount
at maturity of LYONs and 17,446,000 shares of our common stock, plus an
indeterminate number of additional shares of common stock that may be issued
form time to time upon conversion of the LYONs by reason of adjustment to the
conversion price or upon repurchase or redemption, in each case in certain
circumstances described in this prospectus.
We issued and sold $840,940,000 aggregate principal amount at maturity of
LYONs, on October 24, 2001, in a private offering to Merrill Lynch & Co., as the
initial purchaser. On October 26, 2001, upon exercise of its overallotment
option by Merrill Lynch & Co., we issued and sold to Merrill Lynch & Co., as the
initial purchaser, an additional $210,235,000 aggregate principal amount at
maturity of LYONs. These LYONs were simultaneously resold by the initial
purchaser in transactions exempt from registration requirements of the
Securities Act to persons reasonably believed by the initial purchaser to be
"qualified institutional buyers" (as defined in Rule 144A under the Securities
Act).
The shares of common stock may be offered by the selling securityholders
following the conversion of the LYONs.
TERMS OF THE LYONS
LYONs.......................... $1,051,175,000 aggregate principal amount at maturity of
LYONs due 2021. We do not pay interest on the LYONs prior to
maturity. Each LYON was issued at a price of $475.66 per
LYON (plus accrued original issue discount, if any) and has
a principal amount at maturity of $1,000.
Maturity of LYONs.............. October 24, 2021.
Yield to Maturity of LYONs..... 3.75% per year (computed on a semi-annual bond equivalent
basis) calculated from October 24, 2001.
Original Issue Discount........ The LYONs were issued at an issue price significantly below
the principal amount at maturity of the LYONs. The
difference between the issue price and the principal amount
at maturity of a LYON is referred to as original issue
discount. This original issue discount accrues daily at a
rate of 3.75% per year beginning on October 24, 2001,
calculated on a semi-annual bond equivalent basis, using a
360-day year comprised of twelve 30-day months. You should
be aware that although we do not pay interest on the LYONs,
United States holders must include original issue discount,
as it accrues, in their gross income for United States
federal income tax purposes. See "Certain Panamanian and
United States Federal Income Tax Considerations--United
States--United States Holders--Original Issue Discount."
6
Conversion Rights.............. For each LYON surrendered for conversion, if specified
conditions are satisfied, a holder will receive 16.5964
shares of our common stock. Upon conversion, we will have
the right to deliver, in lieu of our common stock, cash or a
combination of cash and common stock. If we elect to pay
holders cash for their LYONs, the payment will be based on
the average sale price of our common stock for the five
consecutive trading days immediately following either:
- the date of our notice of our election to deliver
cash, which we must give within two business days
after receiving a conversion notice, unless we have
earlier given notice of redemption as described in
this prospectus; or
- the conversion date, if we have given notice of
redemption specifying that we intend to deliver cash
upon conversion thereafter.
The conversion rate may be adjusted for certain reasons
specified in the indenture but will not be adjusted for
accrued original issue discount. Upon conversion, a holder
will not receive any cash payment representing accrued
original issue discount. Instead, accrued original issue
discount will be deemed paid by the shares of common stock
received by the holder on conversion. See "Description of
LYONs--Conversion Rights."
Commencing after February 28, 2002, holders may surrender
LYONs for conversion into shares of common stock in any
fiscal quarter (and only during such fiscal quarter), if the
closing sale price of our common stock for at least 20
trading days in a period of 30 consecutive trading days
ending on the last trading day of the preceding fiscal
quarter is more than 110% of the accreted conversion price
per share of common stock on the last day of such preceding
fiscal quarter. Our fiscal quarters end on the last day of
February, May, August and November. The "accreted conversion
price" per share as of any day will equal the issue price of
a LYON plus the accrued original discount to that day, with
that sum divided by the number of shares of common stock
issuable upon conversion of a LYON.
LYONs or portions of LYONs in integral multiples of $1,000
principal amount at maturity called for redemption may be
surrendered for conversion until the close of business on
the redemption date, even if the LYONs are not otherwise
convertible. In addition, if we make a significant
distribution to our shareholders or if we are a party to
certain consolidations, mergers or binding share exchanges,
LYONs may be surrendered for conversion as provided in
"Description of LYONs--Conversion Rights." The ability to
surrender LYONs for conversion will expire at the close of
business on the business day immediately preceding
October 24, 2021, unless they have previously been redeemed
or repurchased. See "Description of LYONs--Conversion
Rights--Conversion Rights Upon Notice of Redemption."
7
Ranking........................ The LYONs are unsecured and unsubordinated obligations and
rank equal in right of payment to all our existing and
future unsecured and unsubordinated indebtedness. However,
the LYONs are effectively subordinated to all existing and
future obligations of our subsidiaries. As of August 31,
2001, we had approximately $2.66 billion of total
indebtedness outstanding, which included approximately
$1.21 billion of indebtedness of our consolidated
subsidiaries. See "Capitalization."
Sinking Fund................... None.
Redemption of LYONs at Our
Option....................... We may redeem all or a portion of the LYONs at any time on
or after October 24, 2008 at the redemption prices set forth
in this prospectus under the caption, "Description of
LYONs--Redemption of LYONs at our Option." Holders may
convert their LYONs after they are called for redemption at
any time prior to the close of business on the redemption
date. Our notice of redemption will inform the holders of
our election to deliver shares of our common stock or to pay
cash or a combination of cash and common stock. See
"Description of LYONs--Redemption of LYONs at Our Option."
Purchase of LYONs by Us at the
Option
of Holder.................... Holders may require us to purchase all or a portion of their
LYONs on the following dates at the following prices:
- On October 24, 2006 for a price equal to $572.76 per LYON,
- On October 24, 2008 for a price equal to $616.94 per LYON,
- On October 24, 2011 for a price equal to $689.68 per LYON,
and
- On October 24, 2016 for a price equal to $830.47 per LYON.
We may choose to pay the purchase price in cash, shares of
common stock or a combination of cash and shares of common
stock. After receiving notice of such choice, you may
withdraw your election. We may also add additional purchase
dates on which holders may require us to purchase all or a
portion of their LYONs. See "Description of the
LYONs--Purchase of LYONs by Us at the Option of the Holder."
Change in Control.............. Upon a change in control (as defined in the indenture
governing the LYONs) of our company occurring at any time on
or before October 24, 2008, each holder may require us to
purchase all or a portion of such holder's LYONs for cash at
a price equal to 100% of the issue price of the LYONs to be
purchased plus accrued original issue discount to, but
excluding, the date of purchase. See "Description of
LYONs--Change in Control Permits Purchase of LYONs by Us at
the Option of the Holder."
Ownership Limitation on
LYONs........................ In order to permit us to retain our status as a publicly
traded corporation under the proposed Treasury regulations
to Section 883 of the Code, LYONs generally may not be
transferred if the transfer would result in ownership,
including LYONs and other convertible securities on an
as-converted basis, by one person or group of related
persons by virtue of the attribution provisions of the Code,
of more than 4.9% of our common stock. See "Description of
LYONs--Ownership Limitation on LYONs."
8
Use of Proceeds................ The selling securityholders will receive all of the proceeds
from the sale of the securities sold under this prospectus.
We will not receive any of the proceeds from sales by the
selling securityholders of the offered securities.
DTC Eligibility................ The LYONs were issued in book-entry form and are represented
by one or more permanent global certificates deposited with
a custodian for and registered in the name of a nominee of
DTC in New York, New York. Beneficial interests in any such
securities are shown on, and transfers are effected only
through, records maintained by DTC and its direct and
indirect participants, and any such interest may not be
exchanged for certificated securities, except in limited
circumstances. See "Description of LYONs--Book-Entry
System."
Shelf Registration Statement... Under the registration rights agreement, dated October 24,
2001, between Merrill Lynch & Co. and us, we have agreed to
use commercially reasonable efforts to cause a shelf
registration statement to become effective within 180 days
after the date of original issuance of the LYONs. We are
required to keep such shelf registration statement effective
until the earlier of (i) the sale pursuant to the shelf
registration statement of all of the LYONs and the shares of
common stock issuable upon conversion of the LYONs, which
together we refer to as "registrable securities," and (ii)
the expiration of the holding period applicable to such
securities held by non-affiliates of ours under Rule 144(k)
under the Securities Act, or any successor provision and
(iii) the second anniversary of the effective date of the
shelf registration statement, subject to certain permitted
exceptions. See "Description of LYONs--Registration Rights."
We are permitted to suspend the use of this prospectus under
certain circumstances. We agreed to pay predetermined
liquidated damages to selling securityholders if this
prospectus is unavailable for periods in excess to those
described elsewhere in this prospectus. Purchasers of the
registrable securities offered by means of this prospectus
will not have any rights under the registration rights
agreement, although once sold under this registration
statement the registrable securities should be freely
tradable except by purchasers who are our "affiliates" or
are "underwriters" of the registrable securities for
purposes of the Securities Act.
Trading Symbol for our Common
Stock........................ Our common stock is traded on the New York Stock Exchange
under the symbol "CCL."
9
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING SPECIFIC RISK FACTORS AS WELL AS
THE OTHER INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS
BEFORE DECIDING TO INVEST IN THE LYONS AND OUR COMMON STOCK. SOME STATEMENTS IN
THIS SECTION ARE "FORWARD-LOOKING STATEMENTS." FOR A DISCUSSION OF THOSE
STATEMENTS AND OF OTHER FACTORS FOR INVESTORS TO CONSIDER, SEE "SPECIAL NOTE
REGARDING FORWARD-LOOKING STATEMENTS."
RISKS RELATED TO OUR BUSINESS
DEMAND FOR CRUISES CAN BE AND HAS BEEN AFFECTED BY MANY FACTORS THAT ARE OUTSIDE
OUR CONTROL, INCLUDING THE ONGOING EFFECTS OF THE SEPTEMBER 11, 2001 TERRORIST
INCIDENTS; AND OUR OPERATING RESULTS AND REVENUES DEPEND IN LARGE PART ON DEMAND
FOR CRUISES.
Demand for cruises may be affected by a number of factors. For example, our
sales are dependent on the underlying economic strength of the countries in
which we operate. Adverse economic conditions can reduce the level of disposable
income of consumers available for vacations. In addition, armed conflicts or
political instability in areas where our ships cruise can adversely affect
demand for our cruises to those areas. Also, acts of terrorism can have an
adverse effect on tourism, travel and the availability of air service and other
forms of transportation. In particular, the recent terrorist attacks and
subsequent actions have impacted negatively our revenues and operating results
since September 11, 2001. Given the uncertainty regarding the future impact of
these events on tourism and travel, we are unable to quantify their long-term
impact on our future operations at this time.
Finally, adverse incidents involving cruise ships and adverse media
publicity concerning the cruise industry in general can impact demand. The
operation of cruise ships involves the risk of accidents and other incidents
which may bring into question passenger safety and adversely affect future
industry performance. While we make passenger safety a high priority in the
design and operation of our ships, accidents and other incidents involving
cruise ships could adversely affect our future sales and profitability. Any
reduction in demand may have a negative impact on our net revenue yields, which
would also have a negative impact on our net income.
OVERCAPACITY WITHIN THE CRUISE BUSINESS COULD HAVE A NEGATIVE IMPACT ON OUR NET
REVENUE YIELDS.
Cruising capacity has grown in recent years, and we expect it to continue to
increase over the next five years as all of the major cruise companies,
including our own, are expected to introduce new ships into service. In order to
utilize new capacity, the cruise industry must increase its share of the overall
vacation market. Any imbalances between cruise industry supply and demand could
have a negative impact on our net revenue yields, which would also have a
negative impact on our net income.
ENVIRONMENTAL AND HEALTH AND SAFETY LEGISLATION COULD INCREASE OPERATING COSTS.
Some environmental groups have lobbied for more stringent regulation of
cruise ships. Some groups also have generated negative publicity about the
cruise industry and its environmental impact. As a result, governmental
authorities around the world may enact new environmental and health and safety
legislation. For instance, the United States Environmental Protection Agency is
considering new laws and rules to manage cruise ship waste. Stricter
environmental and health and safety regulations could increase the cost of
compliance and adversely affect the cruise industry.
WE FACE SIGNIFICANT COMPETITION FROM BOTH CRUISE LINES AND OTHER VACATION
OPERATORS.
We operate in the vacation market. We compete for consumer disposable
leisure-time dollars with both other cruise operators and a wide array of
vacation operators, including numerous land destinations and timeshare vacation
operators located throughout the world. These operators attempt to obtain a
competitive advantage by lowering prices and by improving their products by
offering
10
different vacation experiences, itineraries and locations. Since September 11,
2001, the major cruise lines, including our own, have announced the movement of
some of their vessels from European to North American ports. The redeployment of
such vessels may result in increased competition among the cruise lines with
respect to Caribbean, Mexican Riviera and Alaska cruises. Our principal
competitors include Royal Caribbean Cruise Ltd., which owns Royal Caribbean
International and Celebrity Cruises, P&O Princess Cruises plc, which owns
Princess Cruises, P&O Cruises and Aida Cruises, and Norwegian Cruise Line and
Orient Lines, which are both owned by Star Cruises plc. On November 20, 2001,
Royal Caribbean Cruise Ltd. and P&O Princess Cruises plc announced their
intention to combine their businesses, subject to shareholder and regulatory
approvals. In the event that we do not compete effectively with other cruise
companies and other vacation operators, our market share could decrease and our
net revenue yields could be adversely affected.
OUR OPERATING COSTS ARE SUBJECT TO MANY ECONOMIC AND POLITICAL FACTORS THAT ARE
BEYOND OUR CONTROL.
Some of our operating costs, including fuel costs, insurance premiums and
security costs, are subject to increases because of economic or political
instability. Since September 11, 2001, our insurance costs have increased, and
we have also incurred additional expense due to heightened security for our
operations. Additional political instability or terrorist incidents could result
in further increases to operating costs. Increases in operating costs could
adversely affect our operating results because we may not be able to increase
the prices on our cruise vacations to recover these increased costs.
CONDUCTING BUSINESS INTERNATIONALLY MAY RESULT IN INCREASED COSTS.
We operate our business internationally, and we plan to continue to develop
our international presence, especially in Europe. Operating internationally
exposes us to a number of risks. Examples include currency fluctuations,
interest rate movements, increases in duties and taxes, political uncertainty,
and changes in laws and policies affecting cruising, vacation or maritime
businesses or the governing operations of foreign-based companies. If we are
unable to address these risks adequately, our financial results could be
adversely affected.
DELAYS OR FAULTS IN SHIP CONSTRUCTION COULD REDUCE OUR PROFITABILITY.
Cruise ships are large and complicated vessels, and building them involves
risks similar to those encountered in similar sophisticated construction
projects, including delays in delivery and faulty construction. Delays or faults
in ship construction may result in delays or cancellations of scheduled cruises,
necessitate unscheduled repairs and drydocking of the ship and increase our
shipbuilding costs and/or expenses. Industrial action, insolvency of shipyards
or other events could also delay or indefinitely postpone the delivery of new
ships. These events, in turn, could, to the extent they are not covered by
contractual provisions or insurance, adversely affect our financial results.
THE INABILITY OF QUALIFIED SHIPYARDS TO BUILD OUR SHIPS COULD REDUCE OUR FUTURE
PROFITABILITY.
We believe that there are a limited number of shipyards in the world capable
of the quality construction of large passenger cruise ships. We currently have
contracts with three of these shipyards for the construction of 15 ships to
enter service over the next four years. Our primary competitors also have
contracts to construct new cruise ships. If we elect to build additional ships
in the future, which we expect to do, there is no assurance that any of these
shipyards will have the available capacity to build additional new ships for us
at the times desired by us or that the shipyards will agree to build additional
ships at a cost acceptable to us. Additionally, there is no assurance that ships
under contract for construction will be delivered. These events, in turn, could
adversely affect our financial results.
11
RISKS RELATING TO OUR CORPORATE STRUCTURE
ANY CHANGE OF OUR TAX STATUS UNDER THE UNITED STATES INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), COULD HAVE AN ADVERSE EFFECT ON OUR NET INCOME
AND SHAREHOLDERS.
We are a foreign corporation engaged in a trade or business in the United
States, and our ship-owning subsidiaries are foreign corporations that, in many
cases, depending upon the itineraries of their ships, receive income from
sources within the United States. To the best of our knowledge, we believe that,
under Section 883 of the Code and applicable income tax treaties, our income and
the income of our ship-owning subsidiaries, in each case derived from or
incidental to the international operation of a ship or ships, is currently
exempt from United States federal income tax. We believe that substantially all
of our income, and the income of our ship-owning subsidiaries, with the
exception of the United States source income from the transportation, hotel and
tour business of Holland America Tours, is derived from or incidental to the
international operation of a ship or ships within the meaning of Section 883 and
applicable income tax treaties.
We believe that we and many of our ship-owning subsidiaries currently
qualify for the Section 883 exemption since each of us is incorporated in
qualifying jurisdictions and our common stock is primarily and regularly traded
on an established securities market in the United States. To date, however, no
final Treasury regulations or other definitive interpretations of the relevant
portions of Section 883 have been promulgated, although regulations have been
proposed. See the risk factor immediately below for a discussion of the proposed
regulations under Section 883. Those regulations or official interpretations
could differ materially from our interpretation of this Code provision and, even
in the absence of differing regulations or official interpretations, the
Internal Revenue Service might successfully challenge our interpretation. In
addition, the provisions of Section 883 are subject to change at any time by
legislation. Moreover, changes could occur in the future with respect to the
identity, residence, or holdings of our direct or indirect shareholders that
could affect our and our subsidiaries' eligibility for the Section 883
exemption. Accordingly, it is possible that we and our subsidiaries will not be
exempt from United States federal income tax on United States-source shipping
income. If we and our ship-owning subsidiaries were not entitled to the benefit
of Section 883, we would be subject to United States federal income taxation on
a portion of our income, which would reduce our net income.
We believe that the income of some of our ship-owning subsidiaries currently
qualifies for exemption from United States federal income tax under bilateral
income tax treaties. These treaties may be cancelled by either country or
replaced with a new agreement that treats shipping income differently than under
the agreements currently in force. If these subsidiaries do not qualify for
benefits under the existing treaties or the existing treaties are cancelled or
materially modified in a manner adverse to our interests and the subsidiaries do
not qualify for the Section 883 exemption, the ship-owning subsidiaries would be
subject to United States federal income taxation on a portion of their income,
which would reduce our net income.
FAILURE TO COMPLY WITH THE PROPOSED TREASURY REGULATIONS COULD HAVE A NEGATIVE
IMPACT ON OUR NET INCOME AND STOCK PRICE. ALSO, IN ORDER TO COMPLY WITH PROPOSED
TREASURY REGULATIONS, YOUR ABILITY TO ACQUIRE OR TRANSFER OUR COMMON STOCK AND
THE LYONS IS RESTRICTED.
On February 8, 2000, the United States Treasury Department issued proposed
Treasury regulations to Section 883 of the Code, relating to income derived by
foreign corporations from the international operation of ships and aircraft. The
proposed regulations provide, in general, that a corporation organized in a
qualified foreign country and engaged in the international operation of ships or
aircraft shall exclude qualified income from gross income for purposes of United
States federal income taxation provided that the corporation can satisfy certain
ownership requirements, including, among other things, that its stock is
publicly traded. A publicly traded corporation will satisfy this requirement if
more than 50% of its stock is owned by persons who each own less than 5% of the
value of the
12
outstanding shares of the corporation's capital stock. To the best of our
knowledge, after due investigation, we believe that we currently qualify as a
publicly traded corporation under these proposed regulations. However, because
various members of the Arison family and certain trusts established for their
benefit currently own approximately 47% of our common stock, there is the
potential that another shareholder could acquire 5% or more of our common stock,
which could jeopardize our qualification as a publicly traded corporation. If,
in the future, we were to fail to qualify as a publicly traded corporation, we
would be subject to United States federal income tax on our income associated
with our cruise operations in the United States. In such event, our net income
and stock price would be negatively impacted.
As a precautionary matter, we amended our second amended and restated
articles of incorporation to ensure that we will continue to qualify as a
publicly traded corporation under the proposed regulations. This amendment
provides that no one person or group of related persons, other than certain
members of the Arison family and certain trusts established for their benefit,
may own or be deemed to own by virtue of the attribution provisions of the Code
more than 4.9% of our common stock, whether measured by vote, value or number of
shares. Any shares of our common stock acquired in violation of this provision
will be transferred to a trust and, at the direction of our board of directors,
sold to a person whose shareholding does not violate that provision. No profit
for the purported transferee may be realized from any such sale. In addition,
under specified circumstances, the trust may transfer the common stock at a loss
to the purported transferee. Because the LYONs are convertible into common
stock, the transfer of the LYONs will be subject to similar restrictions. See
"Description of LYONs--Ownership Limitation on LYONs." These transfer
restrictions may also have the effect of delaying or preventing a change in our
control or other transactions in which the shareholders might receive a premium
for their shares of our common stock over the then prevailing market price or
which the shareholders might believe to be otherwise in their best interest.
A GROUP OF PRINCIPAL SHAREHOLDERS EFFECTIVELY CONTROLS US AND HAS THE POWER TO
CAUSE OR PREVENT A CHANGE OF CONTROL.
A group of shareholders comprising certain members of the Arison family,
including Micky Arison, our chairman and chief executive officer, and trusts
established for their benefit, beneficially own, as of the date of this
prospectus, a total of approximately 47% of our outstanding common stock. As a
result, this group of shareholders has the power to substantially influence the
election of directors and our affairs and policies without the consent of our
other shareholders. In addition, this group has the power to prevent or cause a
change in control.
WE ARE NOT A UNITED STATES CORPORATION, AND OUR SHAREHOLDERS MAY BE SUBJECT TO
THE UNCERTAINTIES OF A FOREIGN LEGAL SYSTEM IN PROTECTING THEIR INTERESTS.
Our corporate affairs are governed by our second amended and restated
articles of incorporation and by-laws and by the corporate laws of Panama. Thus,
our public shareholders may have more difficulty in protecting their interests
in the face of actions by the management, directors or controlling shareholders
than would shareholders of a corporation incorporated in a United States
jurisdiction.
13
RISKS RELATING TO THE LYONS AND OUR COMMON STOCK
AN ACTIVE TRADING MARKET FOR THE LYONS MAY NOT DEVELOP.
The LYONs are a new issue of securities for which there is currently no
public market and no active trading market might ever develop. If the LYONs are
traded, they may trade at a discount from their initial offering price,
depending on prevailing interest rates, the market for similar securities, the
price of our shares of common stock, our performance and other factors. In
addition, we do not know whether an active trading market will develop for the
LYONs. To the extent that an active trading market does not develop, the
liquidity and trading prices for the LYONs may be harmed.
WE MAY NOT HAVE THE ABILITY TO RAISE THE FUNDS NECESSARY TO FINANCE THE CHANGE
IN CONTROL REPURCHASE OPTION OR THE REPURCHASE AT THE OPTION OF THE HOLDER
PROVISION IN THE LYONS.
Upon the occurrence of specific kinds of change in control events occurring
on or before October 24, 2008, and on the 2006, 2008, 2011 and 2016 purchase
dates, we may be required to repurchase all outstanding LYONs. However, it is
possible that we will not have sufficient funds at such time to make the
required repurchase of LYONs in cash or that restrictions in our debt
instruments will not allow such repurchases. See "Description of LYONs--Purchase
of LYONs by Us at the Option of the Holder" and "--Change in Control Permits
Purchase of LYONs by Us at the Option of the Holder."
THE HOLDERS OF OUR COMMON STOCK MAY EXPERIENCE A DILUTION IN THE VALUE OF THEIR
EQUITY INTEREST AS A RESULT OF THE ISSUANCE AND SALE OF ADDITIONAL SHARES OF OUR
COMMON STOCK.
A substantial number of shares of our common stock were issued by us in
private transactions not involving a public offering and are therefore treated
as "restricted securities" for purposes of Rule 144 under the Securities Act or
are held by our affiliates and, therefore, treated as "restricted securities" or
"control securities." Some members of the Arison family and related entities
beneficially own approximately 47% of our outstanding common stock. No
predictions can be made as to the effect, if any, that the issuance and
availability for future market sales of shares of our common stock will have on
the market price of our common stock prevailing from time to time. Sales of
substantial amounts of our common stock (including shares issued upon the
exercise of stock options), or the perception that such sales could occur, could
materially adversely affect the prevailing market price for our common stock and
could impair our future ability to raise capital through an offering of equity
securities.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this prospectus constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. We have tried, wherever possible, to identify such statements by using
words such as "anticipate," "assume," "believe," "expect," "intend," "plan" and
words and terms of similar substance in connection with any discussion of future
operating or financial performance. These forward-looking statements, including
those which may impact the forecasting of our net revenue yields, involve known
and unknown risks, uncertainties and other factors, which may cause our actual
results, performances or achievements to be materially different from any future
results, performances or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, the following:
- general economic and business conditions which may impact levels of
disposable income of consumers and the net revenue yields for our cruise
products;
- consumer demand for cruises;
- effects on consumer demand of armed conflicts, political instability,
terrorism, the availability of air service and adverse media publicity;
14
- increases in cruise industry capacity;
- cruise and other vacation industry competition;
- continued availability of attractive port destinations;
- changes in tax laws and regulations;
- our ability to implement our shipbuilding program and to continue to
expand our business outside the North American market;
- our ability to attract and retain shipboard crew;
- changes in foreign currency rates, security expenses, food, fuel,
insurance and commodity prices and interest rates;
- delivery of new ships on schedule and at the contracted prices;
- weather patterns;
- unscheduled ship repairs and drydocking;
- incidents involving cruise ships;
- impact of pending or threatened litigation; and
- changes in laws and regulations applicable to us.
We caution the reader that these risks may not be exhaustive. We operate in
a continually changing business environment, and new risks emerge from time to
time. We cannot predict such risks nor can we assess the impact, if any, of such
risks on our business or the extent to which any risk, or combination of risks
may cause actual results to differ from those projected in any forward-looking
statements. Accordingly, forward-looking statements should not be relied upon as
a prediction of actual results. We undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
15
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges on a
historical basis for the periods indicated and on an unaudited pro forma basis
for the nine months ended August 31, 2001 and the fiscal year ended November 30,
2000. The pro forma data give effect to the application of the proceeds of the
LYONs and the amortization of deferred financing expenses. Earnings include net
income, adjusted for income taxes, minority interest and income from affiliated
operations net of dividends received, plus fixed charges and exclude capitalized
interest. Fixed charges include gross interest expense, amortization of deferred
financing expenses and an amount equivalent to interest included in rental
charges. We have assumed that one-third of rental expense is representative of
the interest factor.
HISTORICAL PRO FORMA
-------------------------------------------------------------------------- -------------------------------
NINE MONTHS
ENDED
AUGUST 31, YEARS ENDED NOVEMBER 30, NINE MONTHS YEAR ENDED
------------------- ---------------------------------------------------- ENDED AUGUST 31, NOVEMBER 30,
2001 2000 2000 1999 1998 1997 1996 2001 2000
-------- -------- -------- -------- -------- -------- -------- ---------------- ------------
Ratio of earnings to
fixed charges...... 8.3x 13.6x 11.5x 11.3x 8.8x 9.0x 6.4x 7.7x 9.5x
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
Our common stock is traded on the New York Stock Exchange under the symbol
"CCL". The intra-day high and low of our common stock sales prices for the
periods indicated were as follows:
HIGH LOW
-------- --------
FISCAL 1999
First Quarter............................................. $49.125 $34.875
Second Quarter............................................ $53.500 $38.500
Third Quarter............................................. $50.500 $39.750
Fourth Quarter............................................ $51.875 $38.125
FISCAL 2000
First Quarter............................................. $51.250 $27.250
Second Quarter............................................ $29.063 $21.188
Third Quarter............................................. $27.500 $18.313
Fourth Quarter............................................ $25.875 $19.563
FISCAL 2001
First Quarter............................................. $34.938 $21.938
Second Quarter............................................ $33.400 $23.600
Third Quarter............................................. $33.740 $25.890
Fourth Quarter (through November 28, 2001)................ $31.450 $16.950
As of November 28, 2001, there were approximately 4,594 holders of record of
our common stock.
We declared cash dividends on all of our common stock in the amount of $.09
per share in each of the first three quarters of fiscal 1999 and $.105 for each
subsequent quarter through and including the fourth quarter of fiscal 2001.
Payment of future dividends on the common stock will depend upon, among other
factors, our earnings, financial condition and capital requirements. We may also
declare special dividends to all shareholders in the event that members of the
Arison family and certain related entities, as a result of any future income tax
audit, are required to pay additional income taxes by reason of their ownership
of our common stock.
16
The Republic of Panama does not currently have tax treaties with any other
country. Under current law, we believe that distributions to our shareholders,
other than residents of Panama or other business entities conducting business in
Panama, are not subject to taxation under the laws of the Republic of Panama.
Dividends that we pay to United States citizens, residents, corporations and to
foreign corporations doing business in the United States, to the extent treated
as "effectively connected" income, will be taxable as ordinary income for United
States federal income tax purposes to the extent of our current or accumulated
earnings and profits, but generally will not qualify for any dividends-received
deduction.
The payment and amount of any dividend is within the discretion of our board
of directors, and it is possible that the amount of any dividend may vary from
the levels discussed above.
17
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data presented below for the fiscal
years ended November 30, 2000, 1999, 1998, 1997 and 1996, and as of the end of
each such fiscal year, are derived from our audited financial statements and
should be read in conjunction with those financial statements and the related
notes. The selected financial data presented below for the nine month periods
ended August 31, 2001 and 2000, are derived from our unaudited financial
statements and should be read in conjunction with those financial statements and
related notes.
NINE MONTHS ENDED
AUGUST 31, YEARS ENDED NOVEMBER 30,
----------------------- --------------------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME STATEMENT AND OTHER
DATA (3):
Revenues...................... $3,576,649 $2,928,216 $3,778,542 $3,497,470 $3,009,306 $2,447,468 $2,212,572
Operating income before income
from affiliated
operations.................. 816,218 778,756 945,130 943,941 819,792 660,979 551,461
Operating income.............. 772,194 774,395 982,958 1,019,699 896,524 714,070 597,428
Net income.................... 809,888 (4) 771,663 965,458 1,027,240 835,885 666,050 566,302
Earnings per share (1):
Basic....................... $ 1.39 $ 1.28 $ 1.61 $ 1.68 $ 1.40 $ 1.12 $ 0.98
Diluted..................... 1.38 1.27 1.60 1.66 1.40 1.12 0.96
Dividends declared per share
(1)......................... 0.315 0.315 0.420 0.375 0.315 0.240 0.190
Capital expenditures.......... 713,328 882,460 1,003,348 872,984 1,150,413 497,657 901,905
Available lower berth days.... 15,500 11,808 15,888 14,336 12,237 10,992 9,838
Occupancy percentage (2)...... 107.0% 106.1% 105.4% 104.3% 106.3% 108.3% 107.6%
AS OF AUGUST 31, AS OF NOVEMBER 30,
------------------------ --------------------------------------------------------------
2001 (3) 2000 2000 (3) 1999 1998 1997 1996
----------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS)
BALANCE SHEET DATA:
Total assets................. $11,275,806 $8,592,170 $9,831,320 $8,286,355 $7,179,323 $5,426,775 $5,101,888
Long-term debt
(excluding portion due
within one year).......... 2,478,482 1,475,831 2,099,077 867,515 1,563,014 1,015,294 1,316,632
Total shareholders' equity... 6,546,416 5,769,186 5,870,617 5,931,247 4,285,476 3,605,098 3,030,884
------------------------------
(1) All per share amounts have been adjusted as of such date to reflect a
two-for-one stock split effective June 12, 1998.
(2) In accordance with cruise industry practice, occupancy percentage is
calculated based upon 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.
(3) Since June 1997, we owned 50% of Costa. On September 29, 2000, we completed
the acquisition of the remaining 50% interest in Costa. We accounted for
this transaction using the purchase accounting method. Prior to the fiscal
2000 acquisition, we accounted for our 50% interest in Costa using the
equity method. Commencing in fiscal 2001, Costa's results of operations have
been consolidated on a current month basis in the same manner as our other
wholly-owned subsidiaries. Our November 30, 2000 and August 31, 2001
consolidated balance sheets include Costa's balance sheet. See Note 3 to our
financial statements for the year ended November 30, 2000, which are
incorporated by reference in this prospectus.
(4) Our net income for the nine months ended August 31, 2001 includes an
impairment loss of approximately $101 million and a nonoperating net gain of
approximately $100 million from the sale of our investment in Airtours plc.
See Notes 8 and 9 to our financial statements for the nine months ended
August 31, 2001, which are incorporated by reference in this prospectus.
18
CAPITALIZATION
The following table sets forth our capitalization as of August 31, 2001 and
as adjusted as of such date to give effect to the LYONs and the application of
the gross proceeds of that offering. See "Use of Proceeds."
AS OF AUGUST 31, 2001
-------------------------------------
ACTUAL AS ADJUSTED
----------------- -----------------
(in thousands, except per share data)
Long-term debt (1):
LYONs net of discount....................................... $ -- $ 500,000
2% convertible senior debentures due 2021................... 600,000 600,000
Unsecured debentures and notes, bearing interest at rates
ranging from 6.15% to 7.7%, due through 2028.............. 848,749 848,749
Euro note, secured by one ship, bearing interest at euribor
plus 0.5% (4.8% at August 31, 2001), due through 2008..... 128,554 128,554
Unsecured euro notes, bearing interest at rates ranging from
euribor plus 0.19% to euribor plus 1.0% (4.7% to 5.4% at
August 31, 2001), due 2001, 2005 and 2006 (2)............. 780,743 621,039
Unsecured euro notes, bearing interest at 5.57%, due in
2006...................................................... 272,074 272,074
Other....................................................... 30,210 30,210
----------- -----------
Total long-term debt...................................... 2,660,330 3,000,626
Less portion due within one year.......................... (181,848) (22,144)
----------- -----------
Total long-term debt (excluding portion due within one
year)................................................... 2,478,482 2,978,482
----------- -----------
Shareholders' equity:
Common stock; $.01 par value; 960,000 shares authorized;
620,006 shares issued..................................... 6,200 6,200
Additional paid-in capital.................................. 1,805,050 1,805,050
Retained earnings........................................... 5,501,532 5,501,532
Unearned stock compensation................................. (13,590) (13,590)
Accumulated other comprehensive loss........................ (25,139) (25,139)
Treasury stock; 33,848 shares at cost....................... (727,637) (727,637)
----------- -----------
Total shareholders' equity................................ 6,546,416 6,546,416
----------- -----------
Total capitalization (excluding portion of long-term debt
due within one year).................................... $ 9,024,898 $ 9,524,898
=========== ===========
------------------------
(1) All borrowings are in U.S. dollars unless otherwise noted. Euro denominated
notes have been translated to U.S. dollars at August 31, 2001 exchange rate.
(2) In May 2001, we entered into a five-year $235 million unsecured euro
denominated revolving credit facility, of which $207 million was available
at August 31, 2001. We intend to refinance a $70 million unsecured euro
note, due in 2001, with proceeds from this revolver and, accordingly, have
classified this $70 million of outstanding debt as long-term at August 31,
2001.
19
USE OF PROCEEDS
The selling securityholders will receive all of the proceeds from the sale
of the securities sold under this prospectus. We will not receive any of the
proceeds from sales by the selling securityholders of the offered securities.
SELLING SECURITYHOLDERS
The following table provides, as of November 28, 2001, the name of each
selling securityholder, the principal amount at maturity of the LYONs held by
such selling securityholder, the number of shares of common stock owned by such
securityholder prior to its purchase of the LYONs and the common stock issuable
upon conversion of the LYONs (based upon the initial conversion price). This
information has been obtained from the selling securityholders. Selling
securityholders representing an amount of up to an additional $817,138,000
aggregate principal amount at maturity of the LYONs will be added to the table
prior to or after the effectiveness of the registration statement of which this
prospectus is a part.
(2)
PRINCIPAL
AMOUNT AT
MATURITY OF (3) (4) (5)
LYONS PERCENT OF COMMON STOCK COMMON STOCK
(1) BENEFICIALLY TOTAL ISSUABLE UPON OWNED PRIOR TO
SELLING OWNED AND OUTSTANDING CONVERSION OF CONVERSION OF
SECURITYHOLDER OFFERED LYONS THE LYONS LYONS*
--------------------------------- ------------- -------------- ----------------- -----------------
BNP Paribas Equity Strategies
SNC............................ $ 5,500,000 0.52% 91,281 241,406
First Union Securities, Inc...... 39,400,000 3.75% 653,908 0
Global Bermuda Limited
Partnership.................... 3,300,000 0.31% 54,769 --
HBK Master Fund L.P.............. 9,000,000 0.86% 149,370 7,200
Highbridge International LLC..... 26,500,000 2.52% 439,811 --
J.P. Morgan Securities Inc....... 2,050,000 0.20% 34,023 187,218
Lakeshore International, Ltd..... 13,200,000 1.26% 219,076 --
MLQA Convertible Securities
Arbitrage Ltd.................. 52,500,000 4.99% 871,325 --
Shepherd Investments
International, Ltd............. 58,087,000 5.53% 964,050 --
St. Albans Partners Ltd.......... 10,000,000 1.00% 165,966 --
Triborough Partners QP, LLC...... 2,500,000 0.24% 41,491 --
Yield Strategies Fund I, LP...... 12,000,000 1.14% 199,160 --
--------------------------
* Assuming the sale of all LYONs and common stock issuable upon conversion of
the LYONs, selling securityholders will not hold any LYONs and will hold the
number of our common stock set forth in column (5) "Common Stock Owned Prior
to Conversion of LYONs". At that time, no selling securityholder will hold
more than 1% of our outstanding common stock.
Except as described below, none of the selling securityholders listed above
has, or within the past three years had, any position, office or any material
relationship with us or any of our affiliates. Because the selling
securityholders may offer all or some portion of the above-referenced securities
under this prospectus or otherwise, no estimate can be given as to the amount of
percentage that will be held by the selling securityholders upon termination of
any sale. In addition, the selling securityholders identified above may have
sold, transferred or otherwise disposed of all or a portion of such securities
since October 24, 2001, in transactions exempt from the registration
requirements of the Securities Act.
Generally, only selling securityholders identified in the foregoing table
who beneficially own the securities set forth opposite their respective names in
columns (2) and (5) may sell offered securities under the registration statement
of which this prospectus forms a part. We may from time to time include
additional selling securityholders in supplements to this prospectus.
20
PLAN OF DISTRIBUTION
The LYONs and underlying common stock, which we will refer to as offered
securities, are being registered to permit the resale of such securities by the
holders of them from time to time after the date of this prospectus. We will not
receive any of the proceeds from the sale by the selling securityholders of the
LYONs and common stock. We will bear the fees and expenses incurred in
connection with our obligation to register the LYONs and underlying common
stock. These fees and expenses include registration and filing fees, printing
and duplication expenses, fee and disbursement of our counsel. However, the
selling securityholders will pay all underwriting discounts and selling
commissions, if any, and their own legal expenses.
The selling securityholders may sell the LYONs and common stock from time to
time, at market prices prevailing at the time of sale, at prices related to
market prices, at fixed prices, prices subject to change or at negotiated
prices, by a variety of methods including the following:
- in market transactions;
- in privately negotiated transactions;
- through broker-dealers, which may act as agents or principals;
- in a block trade in which a broker-dealer will attempt to sell a block of
securities as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
- if we agree to it prior to the distribution, through one or more
underwriters on a firm commitment or best-efforts basis;
- directly to one or more purchasers;
- through agents;
- in any combination of the above; or
- by any other legally available means.
In effecting sales, brokers or dealers engaged by the selling
securityholders may arrange for other brokers or dealers to participate.
Broker-dealer transactions may include:
- purchases of the LYONs and common stock by a broker-dealer as principal
and resales of them by the broker-dealer for its account pursuant to this
prospectus;
- ordinary brokerage transactions; or
- transactions in which the broker-dealer solicits purchasers.
- If a material arrangement with any underwriter, broker, dealer or other
agent is entered into for the sale of any LYONs and common stock through a
secondary distribution or a purchase by a broker or dealer, or if other
material changes are made in the plan of distribution of the LYONs and
common stock, a prospectus supplement will be filed, if necessary, under
the Securities Act disclosing the material terms and conditions of such
arrangement. The underwriter or underwriters with respect to an
underwritten offering of LYONs and common stock and the other material
terms and conditions of the underwriting will be set forth in a prospectus
supplement relating to such offering and, if an underwriting syndicate is
used, the managing underwriter or underwriters will be set forth on the
cover of the prospectus supplement. In connection with the sale of LYONs
and common stock, underwriters will receive compensation in the form of
underwriting discounts or commissions and may also receive commissions
from purchasers of LYONs and underlying common stock for whom they may act
as agent. Underwriters may sell to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers
for whom they may act as agent.
21
In addition, any securities covered by this prospectus which can be sold
under Rule 144 under the Securities Act may be sold under Rule 144 rather than
in a registered offering contemplated by this prospectus.
The selling securityholders and any underwriters, broker-dealers or agents
participating in the distribution of the securities may be deemed to be
"underwriters" within the meaning of the Securities Act, and any profit on the
sale of the LYONs and/or common stock by the selling securityholders and any
commissions received by any such underwriters, broker-dealers or agents may be
deemed to be underwriting commissions under the Securities Act.
The selling securityholders and any other person participating in the
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations under the Exchange Act, including without limitation,
Regulation M, which may limit the timing of purchases and sales of any of the
LYONs and common stock by the selling securityholders and any other relevant
person. Furthermore, Regulation M may restrict the ability of any person engaged
in the distribution of the LYONs and common stock to engage in market-making
activities with respect to the particular LYONs and common stock being
distributed. All of the above may affect the marketability of the LYONs and
common stock and the ability of any person or entity to engage in market-making
activities with respect to the LYONs and common stock.
Under the securities laws of certain states, the LYONs and underlying common
stock may be sold in those states only through registered or licensed brokers or
dealers. In addition, in certain states the LYONs and common stock may not be
sold unless the LYONs and common stock have been registered or qualified for
sale in the state or an exemption from registration or qualification is
available and is complied with.
We have agreed to indemnify the selling securityholders against certain
civil liabilities, including certain liabilities arising under the Securities
Act, and the selling securityholders will be entitled to contribution from us in
connection with those liabilities. The selling securityholders will indemnify us
against certain civil liabilities, including liabilities arising under the
Securities Act, and will be entitled to contribution from the selling
securityholders in connection with those liabilities.
We are permitted to suspend the use of this prospectus under certain
circumstances relating to pending corporate developments, public filings with
the SEC and similar events for a period not to exceed 60 days in any three-month
period and not to exceed an aggregate of 90 days in any 12-month period.
However, if the duration of such suspension exceeds any of the periods
above-mentioned, we have agreed to pay liquidated damages. Please refer to the
section entitled "Description of LYONs--Registration Rights."
The outstanding common stock is listed for trading on the New York Stock
Exchange under the symbol "CCL." We do not intend to apply for listing of the
LYONs on any securities exchange or for quotation through the National
Association of Securities Dealers Automated Quotation System. Accordingly, we
cannot assure you about the development of liquidity or any trading market for
the LYONs. Please refer to the section entitled "Risk Factors."
22
DESCRIPTION OF LYONS
We have issued the LYONs pursuant to the indenture dated as of April 25,
2001, between us and US Bank Trust National Association, as trustee, as
supplemented by a second supplemental indenture dated October 24, 2001,
governing the LYONs. We refer to the indenture, as so supplemented, as the
"indenture."
The following summary does not purport to be complete, and is subject to,
and is qualified in its entirety by reference to, all of the provisions of the
LYONs and the indenture. We urge you to read the indenture and the form of the
LYONs, which you may obtain from us upon request. As used in this description,
all references to "our company," "we," "us" or "our" mean Carnival Corporation,
excluding, unless otherwise expressly stated or the context otherwise requires,
its subsidiaries.
GENERAL
The LYONs were limited to $1,051,175,000 aggregate principal amount at
maturity. The LYONs mature on October 24, 2021. The principal amount at maturity
of each LYON is $1,000. The LYONs will be payable at the office of the paying
agent, which initially will be an office or agency of the trustee, or an office
or agency maintained by us for such purpose, in the Borough of Manhattan, The
City of New York.
The LYONs were offered at a substantial discount from their principal amount
at maturity. We do not make periodic payments of interest on the LYONs. Each
LYON was issued at an issue price of $475.66 per LYON. However, the LYONs accrue
original issue discount while they remain outstanding. Original issue discount
is the difference between the issue price and the principal amount at maturity
of a LYON. Original issue discount is calculated on a semi-annual bond
equivalent basis at the yield to maturity of the LYONs, using a 360-day year
comprised of twelve 30-day months. The issue date for the LYONs and the
commencement date for the accrual of original issue discount is October 24,
2001.
Maturity, conversion, purchase by us at the option of a holder or redemption
of a LYON at our option will cause original issue discount to cease to accrue on
such LYON. We may not reissue a LYON that has matured or been converted,
purchased by us at your option, redeemed or otherwise cancelled, except for
registration of transfer, exchange or replacement of such LYON.
LYONs may be presented for conversion at the office of the conversion agent,
and for exchange or registration of transfer at the office of the registrar,
each such agent initially being the trustee. We do not charge a service fee for
any registration of transfer or exchange of the LYONs.
RANKING OF LYONS
The LYONs are unsecured and unsubordinated obligations. The LYONs rank equal
in right of payment to all of our existing and future unsecured and
unsubordinated indebtedness. However, the LYONs are effectively subordinated to
all existing and future obligations of our subsidiaries.
As of August 31, 2001, we had approximately $2.66 billion of total
indebtedness outstanding, which included approximately $1.21 billion of
indebtedness of our consolidated subsidiaries. See "Capitalization."
CONVERSION RIGHTS
Holders may surrender LYONs for conversion into shares of our common stock
only if at least one of the conditions described below is satisfied. The initial
conversion rate is 16.5964 shares of common stock per $1,000 principal amount at
maturity of LYONs, subject to adjustment upon the occurrence of certain events
described below. A holder of a LYON otherwise entitled to a fractional share
will receive cash in an amount equal to the value of such fractional share based
on the sale price, as defined below,
23
on the trading day immediately preceding the conversion date. Upon a conversion,
we will have the right to deliver cash or a combination of cash and common
stock, as described below.
CONVERSION RIGHTS BASED ON COMMON STOCK PRICE. Commencing after
February 28, 2002, holders may surrender LYONs for conversion into shares of our
common stock in any fiscal quarter (and only during such fiscal quarter), if the
closing sale price of our common stock for at least 20 trading days in a period
of 30 consecutive trading days ending on the last trading day of the preceding
fiscal quarter is more than 110% of the accreted conversion price per share of
common stock on the last day of such preceding fiscal quarter (the "conversion
trigger price"). Our fiscal quarters end on the last day of February, May,
August and November. The "accreted conversion price" per share as of any day
will equal the sum of the issue price of a LYON plus the accrued original issue
discount to that day, with that sum divided by the number of shares of common
stock issuable upon a conversion of a LYON.
"Trading Day" means a day during which trading in securities generally
occurs on the New York Stock Exchange or, if the common stock is not listed on
the New York Stock Exchange, on the principal other national or regional
securities exchange on which the common stock is then listed or, if the common
stock is not listed on a national or regional securities exchange, on the
National Association of Securities Dealers Automated Quotation System or, if the
common stock is not quoted on the National Association of Securities Dealers
Automated Quotation System, on the principal other market on which the common
stock is then traded.
The table below shows the conversion trigger price per share of our common
stock for each of the first 20 fiscal quarters. These prices reflect the
accreted conversion price per share of common stock multiplied by 110%. The
conversion trigger price for the fourth fiscal quarter of 2021 beginning
September 1 is $65.92, assuming no adjustment to the conversion rate.
(2)
(1) CONVERSION
ACCRETED TRIGGER
CONVERSION PRICE
FISCAL QUARTER* PRICE (1) X 110%
--------------- ---------- -------------
2002
Second Quarter............................................ $29.04 $31.94
Third Quarter............................................. 29.31 32.24
Fourth Quarter............................................ 29.58 32.54
2003
First Quarter............................................. 29.86 32.85
Second Quarter............................................ 30.14 33.15
Third Quarter............................................. 30.42 33.46
Fourth Quarter............................................ 30.70 33.77
2004
First Quarter............................................. 30.99 34.09
Second Quarter............................................ 31.28 34.41
Third Quarter............................................. 31.57 34.73
Fourth Quarter............................................ 31.87 35.05
2005
First Quarter............................................. 32.16 35.38
Second Quarter............................................ 32.46 35.71
Third Quarter............................................. 32.77 36.04
Fourth Quarter............................................ 33.07 36.38
24
(2)
(1) CONVERSION
ACCRETED TRIGGER
CONVERSION PRICE
FISCAL QUARTER* PRICE (1) X 110%
--------------- ---------- -------------
2006
First Quarter............................................. 33.38 36.72
Second Quarter............................................ 33.69 37.06
Third Quarter............................................. 34.01 37.41
Fourth Quarter............................................ 34.32 37.76
2007
First Quarter............................................. 34.64 38.11
------------------------
* This table assumes no events have occurred that would require an adjustment
to the conversion rate. Our fiscal quarters end on the last days of
February, May, August and November.
CONVERSION RIGHTS UPON NOTICE OF REDEMPTION. A holder may surrender for
conversion a LYON called for redemption at any time prior to the close of
business on the redemption date, even if it is not otherwise convertible at such
time. A LYON for which a holder has delivered a purchase notice or a change in
control purchase notice as described below requiring us to purchase the LYON may
be surrendered for conversion only if such notice is withdrawn in accordance
with the indenture.
CONVERSION RIGHTS UPON OCCURRENCE OF CERTAIN CORPORATE TRANSACTIONS. If we
are party to a consolidation, merger or binding share exchange pursuant to which
our shares of common stock would be converted into cash, securities or other
property, the LYONs may be surrendered for conversion at any time from and after
the date which is 15 days prior to the anticipated effective date of the
transaction until 15 days after the actual date of such transaction and, at the
effective time, the right to convert LYONs into shares of common stock will be
changed into a right to convert it into the kind and amount of cash, securities
or other property of our company or another person which the holder would have
received if the holder had converted the holder's LYONs immediately prior to the
transaction. If such transaction also constitutes a change in control, the
holder will be able to require us to purchase all or a portion of such holder's
LYONs as described under "--Change in Control Permits Purchase of LYONs by Us at
the Option of the Holder."
In the event we elect to make a distribution described in the third or
fourth bullet of the paragraph under the caption, "--Conversion
Rights--Conversion Rate Adjustment" below describing adjustments to the
conversion rate which, in the case of the fourth bullet, has a per share value
equal to more than 7.5% of the sale price of our shares of common stock on the
day preceding the declaration date for such distribution, we will be required to
give notice to the holders of the LYONs at least 20 days prior to the
ex-dividend date for such distribution and, upon the giving of such notice, the
LYONs may be surrendered for conversion at any time until the close of business
on the business day prior to the ex-dividend date or until we announce that such
distribution will not take place.
Notwithstanding anything to the contrary, no LYONs may be surrendered for
conversion pursuant to the first paragraph under this caption, and no corporate
transaction requiring an adjustment to the conversion price will be deemed to
have occurred by reason of the completion of a merger, consolidation or other
transaction effected with one of our affiliates for the purpose of:
- changing our jurisdiction of organization; or
- effecting a corporate reorganization, including, without limitation, the
implementation of a holding company structure.
DELIVERY OF COMMON STOCK. On conversion of a LYON, a holder will not
receive any cash payment of interest representing accrued original issue
discount. Our delivery to the holder of the full number
25
of shares of common stock into which the LYON is convertible, together with any
cash payment for such holder's fractional shares, will be deemed:
- to satisfy our obligation to pay the principal amount at maturity of the
LYON; and
- to satisfy our obligation to pay accrued original issue discount
attributable to the period from the issue date through the conversion
date.
As a result, accrued original issue discount is deemed to be paid in full
rather than cancelled, extinguished or forfeited.
A certificate for the number of full shares of common stock into which any
LYONs are converted, together with any cash payment for fractional shares, will
be delivered through the conversion agent as soon as practicable following the
conversion date. For a discussion of the tax treatment of a holder receiving
shares of common stock upon conversion, see "Certain Panamanian and United
States Federal Income Tax Considerations."
In lieu of delivery of shares of our common stock upon notice of conversion
of any LYONs (for all or any portion of the LYONs), we may elect to pay holders
surrendering LYONs an amount in cash per LYON (or a portion of a LYON) equal to
the average sale price of our common stock for the five consecutive trading days
immediately following either (a) the date of our notice of our election to
deliver cash as described below if we have not given notice of redemption, or
(b) the conversion date, in the case of conversion following our notice of
redemption specifying that we intend to deliver cash upon conversion, in either
case multiplied by the conversion rate in effect on that date. We will inform
the holders through the trustee no later than two business days following the
conversion date of our election to deliver shares of our common stock or to pay
cash in lieu of delivery of the shares, unless we have already informed holders
of our election in connection with our optional redemption of the LYONs as
described under "--Redemption of LYONs at Our Option." If we elect to deliver
all of such payment in shares of our common stock, the shares will be delivered
through the conversion agent no later than the fifth business day following the
conversion date. If we elect to pay all or a portion of such payment in cash,
the payment, including any delivery of our common stock, will be made to holders
surrendering LYONs no later than the tenth business day following the applicable
conversion date. If an event of default, as described under "--Events of
Default; Waiver and Notice" below (other than a default in a cash payment upon
conversion of the LYONs), has occurred and is continuing, we may not pay cash
upon conversion of any LYONs or portion of a LYON (other than cash for
fractional shares).
To convert a LYON into shares of common stock, a holder must:
- complete and manually sign the conversion notice on the back of the
LYON or complete and manually sign a facsimile of the conversion notice
and deliver the conversion notice to the conversion agent;
- surrender the LYON to the conversion agent;
- if required by the conversion agent, furnish appropriate endorsements
and transfer documents; and
- if required, pay all transfer or similar taxes.
Pursuant to the indenture, the date on which all of the foregoing
requirements have been satisfied is the conversion date.
CONVERSION RATE ADJUSTMENT. The conversion rate will be adjusted for:
- dividends or distributions on our shares of common stock payable in
shares of common stock or other capital stock of our company;
- subdivisions, combinations or certain reclassifications of shares of
our common stock;
26
- distributions to all holders of shares of common stock of certain
rights to purchase shares of common stock for a period expiring within
60 days at less than the sale price at the time; and
- distributions to all holders of our shares of common stock of our
assets (including shares of capital stock, of or similar equity
interests in, a subsidiary or other business unit of ours) or debt
securities or certain rights to purchase our securities (excluding cash
dividends or other cash distributions from current or retained earnings
other than, with respect to any consecutive 12-month period, the
amount, if any, by which the aggregate amount of all cash dividends on
the common stock occurring during such 12-month period exceeds on a per
share basis 7.5% of the sale price of the shares of common stock on the
day preceding the date of declaration of such dividend or other
distribution).
In the event that we pay a dividend or make a distribution on shares of our
common stock consisting of capital stock of, or similar equity interests in, a
subsidiary or other business unit of ours, the conversion rate will be adjusted
based on the market value of the securities so distributed relative to the
market value of our common stock, in each case based on the average sale prices
of those securities for the 10 trading days commencing on and including the
fifth trading day after the date on which "ex-dividend trading" commences for
such dividend or distribution on the New York Stock Exchange or such other
national or regional exchange or market on which the securities are then listed
or quoted.
No adjustment to the conversion rate or the ability of a holder of a LYON to
convert will be made if we provide that holders of LYONs will participate in the
transaction without conversion or in certain other cases.
The indenture permits us to increase the conversion rate from time to time.
In the event of:
- a taxable distribution to holders of shares of common stock which
results in an adjustment of the conversion rate; or
- an increase in the conversion rate at our discretion,
the holders of the LYONs may, in certain circumstances, be deemed to have
received a distribution subject to federal income tax as a dividend. See
"Certain Panamanian and United States Federal Income Tax Considerations."
Upon determination that LYON holders are or will be entitled to convert
their LYONs into shares of common stock in accordance with the foregoing
provisions, we will issue a press release and publish such information on our
website on the World Wide Web.
REDEMPTION OF LYONS AT OUR OPTION
Prior to October 24, 2008, the LYONs will not be redeemable at our option.
Beginning on October 24, 2008, we may redeem the LYONs at any time as a whole,
or from time to time in part. We will give not less than 30 days nor more than
60 days notice of redemption by mail to holders of the LYONs. The notice of
redemption will inform the holders of our election to deliver shares of our
common stock or to pay cash or a combination of cash and common stock.
27
The table below shows the redemption prices of a LYON on October 24, 2008,
at each October 24 thereafter prior to maturity and at stated maturity on
October 24, 2021. The redemption price equals the original issue price plus
accrued original issue discount to the redemption date. The redemption price of
a LYON redeemed between such dates would include an additional amount reflecting
the additional original issue discount accrued since the immediately preceding
date in the table.
(1) (2) (3)
ACCRUED ORIGINAL REDEMPTION PRICE
REDEMPTION DATE LYON ISSUE PRICE ISSUE DISCOUNT (1) + (2)
--------------- ---------------- ---------------- ----------------
October 24, 2008............................... $475.66 $141.28 $ 616.94
October 24, 2009............................... 475.66 164.63 640.29
October 24, 2010............................... 475.66 188.87 664.53
October 24, 2011............................... 475.66 214.02 689.68
October 24, 2012............................... 475.66 240.13 715.79
October 24, 2013............................... 475.66 267.22 742.88
October 24, 2014............................... 475.66 295.34 771.00
October 24, 2015............................... 475.66 324.52 800.18
October 24, 2016............................... 475.66 354.81 830.47
October 24, 2017............................... 475.66 386.24 861.90
October 24, 2018............................... 475.66 418.87 894.53
October 24, 2019............................... 475.66 452.73 928.39
October 24, 2020............................... 475.66 487.87 963.53
At stated maturity............................. 475.66 524.34 1,000.00
If we decide to redeem fewer than all of the outstanding LYONs, the trustee
will select the LYONs to be redeemed in principal amounts at maturity of $1,000
or integral multiples of $1,000. In this case, the trustee may select the LYONs
by lot, pro rata, or by another method the trustee considers fair and
appropriate.
If the trustee selects a portion of your LYONs for partial redemption and
you convert a portion of your LYONs, the converted portion will be deemed to be
the portion selected for redemption.
PURCHASE OF LYONS BY US AT THE OPTION OF THE HOLDER
You have the right to require us to purchase your LYONs on any October 24
occurring in the years 2006, 2008, 2011 and 2016. We will be required to
purchase any outstanding LYON for which a written purchase notice has been
properly delivered by the holder to the paying agent and not withdrawn, subject
to certain additional conditions. We may also add additional dates on which you
may require us to purchase all or a portion of your LYONs. However, we cannot
assure you that we will add any purchase dates. You may submit your LYONs for
purchase to the paying agent at any time from the opening of business on the
date that is 20 business days prior to the purchase date until the close of
business on the purchase date. Also, our ability to satisfy our purchase
obligations may be affected by the factors described in "Risk Factors" under the
heading "We may not have the ability to raise the funds necessary to finance the
change in control repurchase option or the repurchase at the option of the
holder provision in the LYONs."
The purchase price of a LYON will be:
- $572.76 per LYON on October 24, 2006;
- $616.94 per LYON on October 24, 2008;
- $689.68 per LYON on October 24, 2011; and
- $830.47 per LYON on October 24, 2016.
28
The purchase prices shown above are equal to the issue price plus accrued
original discount to the purchase date. We may, at our option, elect to pay the
purchase price in cash or shares of common stock, or any combination thereof.
For a discussion of the tax treatment of a holder receiving cash, shares of
common stock or any combination thereof, see "Certain Panamanian and United
States Federal Income Tax Considerations."
We will be required to give notice on a date not less than 20 business days
prior to the purchase date to all holders at their addresses shown in the
register of the registrar, and to beneficial owners as required by applicable
law, stating among other things:
- whether we will pay the purchase price of the LYONs in cash or shares of
common stock or any combination thereof, and specifying the percentages of
each;
- if we elect to pay in shares of common stock, the method of calculating
the market price of the common stock; and
- the procedures that holders must follow to require us to purchase their
LYONs.
Your purchase notice electing to require us to purchase your LYONs must
state:
- if certificated LYONs have been issued, the LYONs certificate numbers, or
if not, such information as may be required under appropriate DTC
procedures;
- the portion of the principal amount of LYONs to be purchased, in integral
multiples of $1,000 principal amount at maturity;
- that we are to purchase the LYONs pursuant to the applicable provisions of
the LYONs and the indenture; and
- in the event we elect, pursuant to the notice that we are required to
give, to pay the purchase price in shares of common stock, in whole or in
part, but the purchase price is ultimately to be paid to you entirely in
cash because any of the conditions to payment of the purchase price or
portion of the purchase price in shares of common stock is not satisfied
prior to the close of business on the purchase date, as described below,
whether you elect:
1. to withdraw the purchase notice as to some or all of the LYONs to
which it relates; or
2. to receive cash in respect of the entire purchase price for all LYONs
or portions of the LYONs subject to such purchase notice.
If you fail to indicate your choice with respect to the election described
in the final bullet point above, you will be deemed to have elected to receive
cash in respect of the entire purchase price for all LYONs subject to the
purchase notice in these circumstances. For a discussion of the tax treatment of
a holder receiving cash instead of shares of common stock, see "Certain
Panamanian and United States Federal Income Tax Considerations."
You may withdraw any purchase notice by a written notice of withdrawal
delivered to the paying agent prior to the close of business on the purchase
date. The notice of withdrawal must state:
- the principal amount at maturity of the withdrawn LYONs;
- if certificated LYONs have been issued, the certificate numbers of the
withdrawn LYONs, or if not, such information as may be required under
appropriate DTC procedures; and
- the principal amount at maturity, if any, of LYONs that remain subject to
your purchase notice.
If we elect to pay the purchase price, in whole or in part, in shares of
common stock, the number of shares to be delivered by us will be equal to the
portion of the purchase price to be paid in shares of common stock divided by
the market price of one share of common stock. We will pay cash based
29
on the market price for all fractional shares in the event we elect to deliver
shares of common stock in payment, in whole or in part, of the purchase price.
The "market price" means the average of the sale prices of the common stock
for the five trading day period ending on the third business day (if the third
business day prior to the purchase date is a trading day or, if not, then on the
last trading day prior to the third business day) prior to the purchase date,
appropriately adjusted to take into account the occurrence, during the period
commencing on the first of such trading days during such five trading day period
and ending on such purchase date, of certain events with respect to the common
stock that would result in an adjustment of the conversion rate.
The "sale price" of the common stock on any date means the closing sale
price per share (or if no closing sale price is reported, the average of the bid
and ask prices or, if more than one in either case, the average of the average
bid and the average ask prices) on such date as reported in composite
transactions for the principal United States securities exchange on which the
common stock is traded or, if the common stock is not listed on a United States
national or regional securities exchange, as reported by the National
Association of Securities Dealers Automated Quotation System or by the National
Quotation Bureau Incorporated.
Because the market price of the common stock is determined prior to the
purchase date, holders of LYONs exercising the purchase right bear the market
risk with respect to the value of the common stock to be received from the date
such market price is determined to the purchase date. We may pay the purchase
price or any portion of the purchase price in shares of common stock only if the
information necessary to calculate the market price is published in a daily
newspaper of national circulation or is otherwise readily publicly available.
Upon determination of the actual number of shares of common stock to be
issued for each $1,000 principal amount at maturity of LYONs in accordance with
the foregoing provisions, we will publish such information on our Web site on
the World Wide Web or through such other public medium as we may use at that
time.
Our right to purchase LYONs, in whole or in part, with shares of common
stock is subject to our satisfying various conditions, including:
- the listing of such shares of common stock on the principal United States
securities exchange on which the common stock is then listed or, if not so
listed, on Nasdaq;
- the registration of the shares of common stock under the Securities Act
and the Exchange Act, if required; and
- any necessary qualification or registration under applicable state
securities law or the availability of an exemption from such qualification
and registration.
If such conditions are not satisfied with respect to a holder prior to the
close of business on the purchase date, we will pay the purchase price of the
LYONs of the holder entirely in cash. See "Certain Panamanian and United States
Federal Income Tax Considerations." We may not change the form or components or
percentages of components of consideration to be paid for the LYONs once we have
given the notice that we are required to give to holders of LYONs, except as
described in the first sentence of this paragraph.
Our ability to purchase LYONs with cash may be limited by the terms of our
then existing borrowing agreements. The indenture prohibits us from purchasing
LYONs for cash in connection with your purchase right if any event of default
under the indenture has occurred and is continuing, except a default in the
payment of the purchase price with respect to the LYONs.
You must either effect book-entry transfer or deliver the LYONs to be
purchased, together with necessary endorsements, to the office of the paying
agent after delivery of the purchase notice to
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receive payment of the purchase price. You will receive payment in cash on the
later of the purchase date or the time of book-entry transfer or the delivery of
your LYONs. If the paying agent holds money or securities sufficient to pay the
purchase price of the LYON on the business day following the purchase date,
then, immediately after the purchase date:
- your LYONs will cease to be outstanding;
- original issue discount will cease to accrue; and
- all other rights of the holder will terminate.
This will be the case whether or not book-entry transfer of your LYONs is
made and whether or not your LYONs are delivered to the paying agent.
We will comply with the provisions of Rule 13e-4, Rule 14e-1 and any other
tender offer rules under the Exchange Act that may be applicable at the time. We
will file Schedule TO or any other schedule under the Exchange Act required in
connection with any offer by us to purchase the LYONs at your option.
CHANGE IN CONTROL PERMITS PURCHASE OF LYONS BY US AT THE OPTION OF THE HOLDER
In the event of a change in control, which occurs on or before October 24,
2008, you will have the right, at your option, subject to the terms and
conditions of the indenture, to require us to purchase for cash any or all of
your LYONs in integral multiples of $1,000 principal amount at maturity. We will
purchase the LYONs at a price equal to 100% of the issue price of the LYONs to
be purchased plus accrued original issue discount to, but excluding, the change
in control purchase date.
We will be required to purchase the LYONs as of the date that is 35 business
days after the occurrence of such change in control (a "change in control
purchase date").
A change of control occurs in the following situations:
- any person or group, other than our subsidiaries, any of our or their
employee benefit plans or permitted holders, after the first issuance of
LYONs files a Schedule TO or a Schedule 13D (or any successors to those
Schedules) stating that it has become and actually is the beneficial owner
of our voting stock representing more than 50% of the total voting power
of all of our classes of voting stock entitled to vote generally in the
election of the members of our board of directors; or
- permitted holders file a Schedule TO or a Schedule 13D (or any successors
to those Schedules) stating that they have become and actually are
beneficial owners of our voting stock representing more than 80%, in the
aggregate, of the voting power of all of our classes of voting stock
entitled to vote generally in the election of the members of our board of
directors; or
- we consolidate with or merge with or into another person (other than a
subsidiary), we sell, convey, transfer or lease our properties and assets
substantially as an entirety to any person (other than a subsidiary), or
any person (other than a subsidiary) consolidates with or merges with or
into our company, and our outstanding common stock is reclassified into,
exchanged for or converted into the right to receive any other property or
security, provided that none of these circumstances will be a change in
control if the persons that beneficially own our voting stock immediately
prior to a transaction beneficially own, in substantially the same
proportion, shares with a majority of the total voting power of all
outstanding voting securities of the surviving or transferee person that
are entitled to vote generally in the election of that person's board of
directors.
For purposes of this provision, a "permitted holder" means each of Marilyn
B. Arison, Micky Arison, Shari Arison, Michael Arison or their spouses, children
or lineal descendants of Marilyn B. Arison, Micky Arison, Shari Arison, Michael
Arison or their spouses, any trust established for the
31
benefit of any Arison family member mentioned in this paragraph, or any "person"
(as such term is used in Section 13(d) or 14(d) of the Exchange Act), directly
or indirectly, controlling, controlled by or under common control with any
Arison family member mentioned in this paragraph or any trust established for
the benefit of any such Arison family member or any charitable trust or
non-profit entity established by a permitted holder.
Notwithstanding anything to the contrary, the completion of a merger,
consolidation or other transaction effected with one of our affiliates for the
purpose of:
- changing our jurisdiction of organization; or
- effecting a corporate reorganization, including, without limitation, the
implementation of a holding company structure
shall not be deemed to be a "change of control."
Within 15 business days after the occurrence of a change in control, we are
obligated to mail to the trustee and to all holders of LYONs at their addresses
shown in the register of the registrar and to beneficial owners as required by
applicable law a notice regarding the change in control, stating, among other
things:
- the events causing a change in control;
- the date of such change in control;
- the last date on which the purchase right may be exercised;
- the change in control purchase price;
- the change in control purchase date;
- the name and address of the paying agent and the conversion agent;
- the conversion rate and any adjustments to the conversion rate;
- that LYONs with respect to which a change in control purchase notice is
given by the holder may be converted only if the change in control
purchase notice has been withdrawn in accordance with the terms of the
LYONs and the indenture; and
- the procedures that holders must follow to exercise these rights.
To exercise this right, you must deliver a written notice to the paying
agent prior to the close of business on the business day immediately before the
change in control purchase date. The required purchase notice upon a change in
control must state:
- if certificated LYONs have been issued, the LYON certificate numbers, or
if not, must comply with appropriate DTC procedures;
- the portion of the principal amount of LYONs to be purchased, in integral
multiples of $1,000 principal amount at maturity; and
- that we are to purchase such LYONs pursuant to the applicable provisions
of the LYONs and the indenture.
You may withdraw any change in control purchase notice by a written notice
of withdrawal delivered to the paying agent prior to the close of business on
the business day before the change in control purchase date. The notice of
withdrawal must state:
- the principal amount at maturity of the withdrawn LYONs, in integral
multiples of $1,000 principal amount at maturity;
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- if certificated LYONs have been issued, the certificate numbers of the
withdrawn LYONs, or if not, must comply with appropriate DTC procedures;
and
- the principal amount at maturity, if any, of LYONs that remain subject to
your change in control purchase notice.
A holder must either effect book-entry transfer or deliver the LYONs to be
purchased, together with necessary endorsements, to the office of the paying
agent after delivery of the change in control purchase notice to receive payment
of the change in control purchase price. You will receive payment in cash on the
change in control purchase date or the time of book-entry transfer or the
delivery of your LYONs. If the paying agent holds money or securities sufficient
to pay the change in control purchase price of your LYONs on the business day
following the change in control purchase date, then, immediately after the
change in control purchase date:
- your LYONs will cease to be outstanding;
- original issue discount will cease to accrue; and
- all other rights of the holder will terminate.
This will be the case whether or not book-entry transfer of your LYONs is
made or whether or not your LYONs is delivered to the paying agent.
We will comply with the provisions of Rule 13e-4, Rule 14e-1 and any other
tender offer rules under the Exchange Act that may be applicable at the time. We
will file Schedule TO or any other schedule under the Exchange Act required in
connection with any offer by us to purchase the LYONs at your option.
The change in control purchase feature of the LYONs may in certain
circumstances make more difficult or discourage a takeover of us. The change in
control purchase feature, however, is not the result of our knowledge of any
specific effort:
- to accumulate shares of common stock;
- to obtain control of us by means of a merger, tender offer, solicitation
or otherwise; or
- by management to adopt a series of anti-takeover provisions.
Instead, the terms of the change in control purchase feature resulted from
negotiations between Merrill Lynch and us.
We could, in the future, enter into certain transactions, including certain
recapitalizations, that would not constitute a change in control with respect to
the change in control purchase feature of the LYONs but that would increase the
amount of our (or our subsidiaries') outstanding indebtedness.
No LYONs may be purchased by us at the option of holders upon a change in
control if there has occurred and is continuing an event of default with respect
to the LYONs, other than a default in the payment of the change in control
purchase price with respect to the LYONs.
For purposes of defining a change of control:
- the term "person" and the term "group" have the meanings given by Sections
13(d) and 14(d) of the Exchange Act or any successor provisions;
- the term "group" includes any group acting for the purpose of acquiring,
holding or disposing of securities within the meaning of Rule 13d-5(b)(1)
under the Exchange Act or any successor provision; and
- the term "beneficial owner" is determined in accordance with Rules 13d-3
and 13d-5 under the Exchange Act or any successor provision, except that a
person will be deemed to have beneficial
33
ownership of all shares that person has the right to acquire irrespective
of whether that right is exercisable immediately or only after the passage
of time.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
The indenture provides that we may not consolidate with or merge into any
other entity or convey or transfer our properties and assets substantially as an
entirety to any entity, unless:
- the successor or transferee entity is a corporation, limited liability
company trust or partnership organized under the laws of the United States
or any State of the United States or the District of Columbia or the
Republic of Panama or any other country recognized by the United States
and all political subdivisions of such countries;
- the successor or transferee entity, if other than us, expressly assumes by
a supplemental indenture executed and delivered to the trustee, in form
reasonably satisfactory to the trustee, the due and punctual payment of
the principal of, any premium on and any interest or accrued original
issue discount on, all the outstanding LYONs and the performance of every
covenant in the indenture to be performed or observed by us and provides
for conversion rights in accordance with applicable provisions of the
indenture;
- immediately after giving effect to the transaction, no Event of Default,
as defined in the indenture, and no event which, after notice or lapse of
time or both, would become an Event of Default, has happened and is
continuing; and
- we have delivered to the trustee an officers' certificate and an opinion
of counsel, each in the form required by the indenture and stating that
such consolidation, merger, conveyance or transfer and such supplemental
indenture comply with the foregoing provisions relating to such
transaction.
In case of any such consolidation, merger, conveyance or transfer, the
successor entity will succeed to and be substituted for us as obligor on the
LYONs, with the same effect as if it had been named in the indenture as our
company.
EVENTS OF DEFAULT; WAIVER AND NOTICE
An event of default is defined in the indenture as:
(a) default for 30 days in payment of any Liquidated Damages under the
registration rights agreement described below;
(b) default in payment of principal of or any premium on the LYONs at
maturity, redemption price, purchase price or change in control purchase price,
when the same becomes due and payable;
(c) default in the payment (after any applicable grace period) of any
indebtedness for money borrowed by our company or a Subsidiary in excess of
$50 million in aggregate principal amount (excluding such indebtedness of any
Subsidiary other than a Significant Subsidiary, all the indebtedness of which
Subsidiary is nonrecourse to our company or any other Subsidiary) or default on
such indebtedness that results in the acceleration of such indebtedness prior to
its express maturity, if such indebtedness is not discharged, or such
acceleration is not annulled, by the end of a period of 30 days after written
notice to us by the trustee or to us and the trustee by the holders of at least
25% in principal amount at maturity of the outstanding LYONs;
(d) default by us in the performance of any other covenant contained in the
indenture for the benefit of the LYONs that has not been remedied by the end of
a period of 60 days after notice is given as specified in the indenture; and
(e) certain events of bankruptcy, insolvency and reorganization of our
company or a Significant Subsidiary.
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When we refer to a "Significant Subsidiary," we mean any Subsidiary, the Net
Worth of which represents more than 10% of the Consolidated Net Worth of our
company and our Subsidiaries. The terms "Subsidiary," "Net Worth" and
"Consolidated Net Worth" are defined in the indenture.
The indenture provides that:
- if an event of default described in clause (a), (b), (c) or (d) above has
occurred and is continuing, either the trustee or the holders of not less
than 25% in aggregate principal amount at maturity of the LYONs may
declare the accreted principal amount (the original issue price of the
LYONs plus accrued original issue discount thereon through the date of
such declaration) of the LYONs then outstanding to be due and payable
immediately;
- upon certain conditions such declarations may be annulled and past
defaults (except for defaults in the payment of principal of, any premium
on or interest on, the LYONs and in compliance with certain covenants) may
be waived by the holders of a majority in aggregate principal amount at
maturity of the LYONs then outstanding.
- if an event of default described in clause (e) occurs and is continuing,
then the accreted principal amount of all LYONs issued under the indenture
and then outstanding shall become and be due and payable immediately,
without any declaration or other act by the trustee or any other holder.
In case of default in payment of the accreted principal amount of the LYONs,
whether at the stated maturity or upon acceleration or redemption, from and
after the maturity date, the LYONs will bear interest, payable upon demand of
their beneficial owners, at the rate of 3.75% per year, to the extent that
payment of any interest is legally enforceable, on the unpaid amount due and
payable on that date in accordance with the terms of the LYONs to the date
payment of that amount has been made or duly provided for.
Under the indenture, the trustee must give to the holders of LYONs notice of
all uncured defaults known to it with respect to the LYONs within 90 days after
such a default occurs (the term default to include the events specified above
without notice or grace periods); provided that, except in the case of default
in the payment of principal of, any premium on, any of the LYONs, the trustee
will 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 the LYONs.
No holder of any LYONs may institute any action under the indenture unless:
- such holder has given the trustee written notice of a continuing event of
default with respect to the LYONs;
- the holders of not less than 25% in aggregate principal amount at maturity
of the LYONs then outstanding have requested the trustee to institute
proceedings in respect of such event of default;
- such holder or holders have offered the trustee such reasonable indemnity
as the trustee may require;
- the trustee has failed to institute an action for 60 days thereafter; and
- no inconsistent direction has been given to the trustee during such 60-day
period by the holders of a majority in aggregate principal amount at
maturity of LYONs.
The holders of a majority in aggregate principal amount at maturity of the
LYONs affected and then outstanding will have the right, subject to certain
limitations, to direct the time, method and place of conducting any proceeding
for any remedy available to the trustee or exercising any trust or power
conferred on the trustee with respect to the LYONs. The indenture provides that,
if an event of default occurs and is continuing, the trustee, in exercising its
rights and powers under the indenture, will be
35
required to use the degree of care of a prudent man in the conduct of his own
affairs. The indenture further provides that the trustee shall not be required
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties under the indenture unless it has
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is reasonably assured to it.
We must furnish to the trustee within 120 days after the end of each fiscal
year a statement of our company signed by one of the officers of our company to
the effect that a review of our activities during such year and of our
performance under the indenture and the terms of the LYONs has been made, and,
to the knowledge of the signatories based on such review, we have complied with
all conditions and covenants of the indenture or, if we are in default,
specifying such default.
For the purposes of determining whether the holders of the requisite
principal amount at maturity of LYONs have taken any action herein described,
the principal amount of LYONs will be deemed to be the portion of such principal
amount that would be due and payable at the time of the taking of such action
upon a declaration of acceleration of maturity thereof.
MODIFICATION OF THE INDENTURE
We and the trustee may, without the consent of the holders of the debt
securities issued under the indenture, enter into supplemental indentures for,
among others, one or more of the following purposes:
- to evidence the succession of another corporation to our company, and the
assumption by such successor of our obligations under the indenture and
the LYONs;
- to add covenants of our company, or surrender any rights of our company,
or add any rights for the benefit of the holders of LYONs;
- to cure any ambiguity, omission, defect or inconsistency in such
indenture;
- to establish the form or terms of any other series of debt securities,
including any subordinated securities;
- to evidence and provide for the acceptance of any successor trustee with
respect to the LYONs or one or more other series of debt securities or to
facilitate the administration of the trusts thereunder by one or more
trustees in accordance with such indenture; and
- to provide any additional events of default.
With certain exceptions, the indenture or the rights of the holders of the
LYONs may be modified by us and the trustee with the consent of the holders of a
majority in aggregate principal amount at maturity of the LYONs then
outstanding, but no such modification may be made without the consent of the
holder of each outstanding LYON affected thereby that would:
- change the maturity of any payment of principal of, or any premium on, any
LYONs, or reduce the principal amount at maturity or the rate of accrual
of original issue discount of any LYON, or change any place of payment
where, or the coin or currency in which, any LYON or any premium is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the maturity thereof (or, in the case of
redemption or repayment, on or after the redemption date or the repayment
date, as the case may be) or adversely affect the conversion or repurchase
provisions in the indenture;
- reduce the percentage in principal amount at maturity of the outstanding
LYONs, the consent of whose holders is required for any such modification,
or the consent of whose holders is required for any waiver of compliance
with certain provisions of the indenture or certain defaults thereunder
and their consequences provided for in the indenture; or
36
- modify any of the provisions of certain sections of the indenture,
including the provisions summarized in this paragraph, except to increase
any such percentage or to provide that certain other provisions of the
indenture cannot be modified or waived without the consent of the holder
of each outstanding LYON affected thereby.
DISCHARGE OF THE INDENTURE
We may satisfy and discharge our obligations under the indenture by
delivering to the trustee for cancellation all outstanding LYONs or by
depositing with the trustee, the paying agent or the conversion agent, if
applicable, after the LYONs have become due and payable, whether at stated
maturity, or any redemption date, or any purchase date, or a change in control
purchase date, or upon conversion or otherwise, cash or common stock (as
applicable under the terms of the indenture) sufficient to pay all of the
outstanding LYONs and paying all other sums payable under the indenture by our
company.
OWNERSHIP LIMITATION ON LYONS
In order to permit us to retain our status as a publicly traded corporation
under the proposed Treasury regulations to Section 883 of the Code, LYONs may
not be transferred if the transfer would result in ownership by one person or
group of related persons by virtue of the attribution provisions of the Code,
other than certain members of the Arison family and certain trusts established
for their benefit, of more than 4.9% of our common stock, whether measured by
vote, value or number of shares. The calculation of a holder's stockholdings
assumes the conversion of the LYONs and other convertible securities issued by
us held by that person or group. See "Description of Capital Stock--Common
Stock--Transfer Restrictions" for a discussion of the attribution provisions. If
a person attempts to acquire LYONs in violation of the 4.9% ownership
limitation, the putative transfer to that person would be void, and the intended
transferee would acquire no rights to the LYONs. For purposes of this 4.9%
limitation, a "transfer" will include any sale, transfer, gift, assignment,
devise or other disposition, whether voluntary or involuntary, whether of
record, constructively or beneficially, and whether by operation of law or
otherwise.
If a prohibited transfer of LYONs results in the ownership of LYONs and
shares of common stock by any shareholder in violation of the 4.9% limit or
would cause us to be subject to United States federal shipping or aircraft
income tax, those LYONs the ownership of which is in excess of the 4.9% limit or
would cause us to be subject to United States federal shipping or aircraft
income tax will automatically be designated as "excess LYONs."
Our board of directors may waive the 4.9% limit or transfer restrictions in
any specific instance if evidence satisfactory to our board of directors and our
tax counsel is presented that such ownership will not jeopardize our status as
exempt from United States income taxation on gross income from the international
operation of a ship or ships, within the meaning of Section 883 of the Code. The
board of directors may also terminate the limit and transfer restrictions
generally at any time for any reason.
Excess LYONs will be transferred to a trust. The trustee of the trust will
be appointed by us and will be independent of us and the purported holder of the
excess LYONs. The beneficiary of such trust will be one or more charitable
organizations selected by the trustee of such trust. The trust will be deemed to
own the LYONs for the beneficiary of such trust on the day prior to the date of
the putative violative transfer.
At the direction of our board of the directors, the trustee of such trust
will transfer the excess LYONs held in trust to a person or persons (including
us) whose ownership of such excess LYONs will not violate the 4.9% limit or
otherwise cause us to become subject to United States shipping income tax within
180 days after the later of the transfer or other event that resulted in such
excess LYONs or we become aware of such transfer or event. If such a transfer is
made, the interest of the charitable beneficiary will terminate, the designation
of such shares as excess LYONs will cease and the prohibited holder of the
excess LYONs will receive the payment that reflects a price per LYON for such
excess
37
LYONs equal to the lesser of (i) the price received by the trustee of such trust
for the sale or other disposition of the LYONs held in trust, and (ii) the price
paid by the prohibited transferee for the LYONs, or, if the prohibited
transferee did not give value for such LYONs, the market price of the LYONs on
the date of the event that resulted in the excess LYONs. A prohibited transferee
or holder of the excess LYONs will not be permitted to receive an amount that
reflects any appreciation in the excess LYONs during the period that such excess
LYONs were outstanding. Any amount received in excess of the amount permitted to
be received by the prohibited transferee or holder of the excess LYONs must be
turned over to the charitable beneficiary of the trust.
If the foregoing restrictions are determined to be void or invalid by virtue
of any legal decision, statute, rule or regulation, then the intended transferee
or holder of any excess LYONs may be deemed, at our option, to have acted as an
agent on our behalf in acquiring or holding such excess LYONs and to hold such
excess LYONs on our behalf.
We have the right to purchase any excess LYONs held by the trust for a
period of 90 days from the later of (i) the date the transfer or other event
resulting in excess LYONs has occurred and (ii) the date the board of directors
determines in good faith that a transfer or other event resulting in excess
LYONs has occurred. The price per excess LYON to be paid by us will be equal to
the lesser of (i) the price per LYON paid in the transaction that created such
excess LYONs (or, in the case of certain other events, the market price per LYON
for the excess LYONs on the date of such event), or (ii) the lowest market price
for the excess LYONs at any time after their designation as excess LYONs and
prior to the date we accept such offer.
GOVERNING LAW
The indenture and the LYONs are governed by and construed in accordance with
the laws of the State of New York.
BOOK-ENTRY SYSTEM
The LYONs that were sold to qualified institutional buyers are evidenced by
global securities, which were deposited with, or on behalf of, DTC and
registered in the name of Cede & Co. as DTC's nominee. Except as set forth
below, the global securities may be transferred, in whole or in part, only to
another DTC nominee or to a successor of DTC or its nominee.
After a sale of LYONs under this shelf registration statement, LYONs that
were held as beneficial interests in the global securities with DTC will remain
as beneficial interests in the global securities.
Persons may hold their interests in the global securities directly through
DTC if they are participants in DTC, or indirectly through organizations that
are participants in DTC. Transfers between participants will be effected in
accordance with DTC rules and will be settled in clearing house funds.
Persons who are not DTC participants may own interests in the global
securities only through DTC participants or certain banks, brokers, dealers,
trust companies and other parties that clear through or maintain a custodial
relationship with a DTC participant. So long as Cede & Co., as the nominee of
DTC, is the registered owner of the global securities, we will consider Cede &
Co. for all purposes to be the sole holder of the global securities. Except as
provided in this section or as described in "Exchange of Beneficial Interests in
the Global Securities for Certificated LYONs," owners of beneficial interests in
the global securities will not have certificates registered in their names, will
not receive physical delivery of certificates in definitive registered form, and
will not be considered the holders of the LYONs.
We will pay interest on and the redemption price or repurchase price of the
global securities to Cede & Co., as the registered owner, by wire transfer of
immediately available funds on each interest payment, redemption or repurchase
date. We and the trustee have no responsibility or liability for any
38
aspect of the records relating to or payments made on account of beneficial
ownership interests in the global securities.
DTC has informed us that its practice is to credit participants' accounts on
the payment date with payments in amounts proportionate to their beneficial
interests in the global securities, unless it has reason to believe that it will
not receive payment. Only the DTC participants are responsible for payments to
owners of beneficial interests held through them.
Because DTC can only act on behalf of participants, who in turn act on
behalf of indirect participants and certain banks, a person having a beneficial
interest in the principal amount at maturity represented by the global
securities may be unable to pledge its interest to persons or entities that do
not participate in the DTC system, due to the lack of a physical certificate
evidencing its interest.
We are not responsible for the performance by DTC or its participants or
indirect participants of their obligations. The trustee is also not responsible
for such performance. DTC has advised us that it will take any action permitted
to be taken by a holder of LYONs, only at the direction of one or more
participants with an interest in a global security, and only with respect to the
principal amount at maturity as to which the participants have given it a
direction.
DTC has advised us that it is a limited purpose trust company organized
under the laws of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the Uniform Commercial Code and a "clearing
agency" registered under the provisions of Section 17A of the Exchange Act. DTC
was created to hold securities for its participants and to facilitate the
clearance and settlement of securities transactions between participants through
electronic book-entry changes to the accounts of its participants, thereby
eliminating the need for physical movement of certificates. Participants include
securities brokers and dealers, banks, trust companies and clearing corporations
and may include certain other organizations such as the initial purchasers of
the debentures. Certain participants (or their representatives), together with
other entities, own DTC. Indirect access to the DTC system is available to
others such as banks, brokers, dealers and trust companies that clear through,
or maintain a custodial relationship with, a participant, either directly or
indirectly.
Although DTC has agreed to the foregoing procedures to facilitate transfers
of interests in global securities among participants, it has no obligation to
perform or continue to perform these procedures. These procedures may be
discontinued at any time.
EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL SECURITY FOR CERTIFICATED LYONS
A global security is exchangeable for definitive convertible LYONs in
registered certificated form if DTC notifies us that it is unwilling or unable
to continue as depositary for the global security and we fail to appoint a
successor depositary within 90 days or if we, at any time and in our sole
discretion, decide not to have the LYONs represented by global securities.
REGISTRATION RIGHTS
The summary herein of certain provisions of the registration rights
agreement is subject to, and is qualified in its entirety by reference to, all
the provisions of the registration rights agreement, which is incorporated by
reference into the registration statement of which this prospectus forms a part.
We entered into a registration rights agreement with Merrill Lynch pursuant to
which we agreed to file with the SEC, at our expense and for the benefit of the
holders, a shelf registration statement covering resale of the LYONs and the
shares of common stock issuable upon conversion of the LYONs, as soon as
practicable, but in any event within 90 days after the date of original issuance
of the LYONs. We will use reasonable best efforts to cause the shelf
registration statement to become effective as promptly as practicable but in any
event within 180 days of such date of original issuance, and to keep the shelf
registration statement effective until the earlier of (i) the transfer pursuant
to Rule 144 under the Securities Act or the sale pursuant to the shelf
registration statement of all the securities registered thereunder, (ii) the
expiration of the holding period applicable to such securities held by persons
that
39
are not affiliates of ours under Rule 144(k) under the Securities Act or any
successor provision and (iii) the second anniversary of the effective date of
the registration statement, subject to certain permitted exceptions. We are
permitted to suspend the use of this prospectus under certain circumstances
relating to pending corporate developments, public filings with the SEC and
similar events for a period not to exceed 60 days in any three-month period and
not to exceed an aggregate of 90 days in any 12-month period. We agreed to pay
predetermined liquidated damages as described herein ("Liquidated Damages") to
holders of transfer restricted LYONs and holders of transfer restricted common
stock issued upon conversion of the LYONs, if a shelf registration statement is
not timely filed or made effective or if the prospectus is unavailable for the
periods in excess of those permitted above. Such Liquidated Damages shall accrue
until such failure to file or become effective or unavailability is cured, (i)
in respect of any LYONs at a rate per year equal to 0.25% for the first 90 day
period after the occurrence of such event and 0.50% thereafter of the applicable
principal amount (as defined below) thereof and, (ii) in respect of any shares
of common stock issued upon conversion, at a rate per year equal to 0.25% for
the first 90 day period and 0.50% thereafter of the then applicable conversion
price (as defined below). So long as the failure to file or become effective or
unavailability continues, we will pay Liquidated Damages in cash on April 24 and
October 24 of each year to the holder of record of the transfer restricted LYONs
or shares of common stock on the immediately preceding April 10 or October 10.
When such registration default is cured, accrued and unpaid Liquidated Damages
will be paid in cash to the record holder as of the date of such cure.
A holder who sells LYONs or shares of common stock issued upon conversion of
the LYONs pursuant to the shelf registration statement must complete and deliver
to us a notice and questionnaire, at least 10 business days prior to any
distribution of the securities so offered. A holder generally is required to be
named as a selling securityholder in the prospectus or in any supplements to
such prospectus, at the time of effectiveness, deliver a prospectus to
purchasers and be bound by the provisions of the registration rights agreement
that are applicable to such holder, including the indemnification provisions,
and will be subject to certain civil liability provisions under the Securities
Act. If the holder of offered securities is not a named selling securityholder
in this prospectus at the time of effectiveness of the shelf registration
statement, we will prepare and file, if required, as promptly as practicable
after the receipt of such holder's questionnaire, amendments to the shelf
registration statement and/or supplements to the prospectus as are necessary to
permit such holder to deliver this prospectus, including any supplements, to
purchasers of the offered securities, subject to our right to suspend the use of
this prospectus as described above. We will pay all of our expenses relating to
the shelf registration statement, provide copies of such prospectus to each
holder that has notified us of its acquisition of LYONs or shares of common
stock issued upon conversion of the LYONs, notify each such holder when the
shelf registration statement has become effective and take certain other actions
as are required to permit, subject to the foregoing, unrestricted resales of the
LYONs and the shares of common stock issued upon conversion of the LYONs.
The term "applicable principal amount" means, as of any date of
determination, with respect to each $1,000 principal amount at maturity of
LYONs, the sum of the initial issue price of such LYONs, $475.66 per $1,000
principal amount at maturity, plus accrued original issue discount with respect
to such LYONs through such date of determination.
The term "applicable conversion price" means, as of any date of
determination, the applicable principal amount of each LYON as of such date of
determination divided by the conversion rate in effect as of such date of
determination or, if no LYONs are then outstanding, the conversion rate that
would be in effect were LYONs then outstanding.
40
DESCRIPTION OF CAPITAL STOCK
GENERAL
Our authorized capital stock consists of 960,000,000 shares of common stock
and 40,000,000 shares of preferred stock. On November 28, 2001, there were
586,171,547 shares of common stock and no shares of preferred stock outstanding.
The following description is qualified in all respects by reference to our
second amended and restated articles of incorporation.
COMMON STOCK
VOTING. Holders of common stock vote as a single class on all matters
submitted to a vote of the shareholders, with each share of common stock
entitled to one vote. In the annual election of directors, the holders of common
stock are not entitled to vote cumulatively.
DIVIDENDS. The holders of the common stock are entitled to receive such
dividends, if any, as may be declared by our board of directors in its
discretion out of funds legally available to be paid as dividends. Panamanian
law permits the payment of dividends to the extent of our retained earnings.
TRANSFER RESTRICTIONS. On February 8, 2000, the United States Treasury
Department issued proposed Treasury regulations to Section 883 of the Code
relating to income derived by foreign corporations from the international
operation of a ship or ships (which includes certain cruise ship and aircraft
income). The proposed regulations provide, in general, that a foreign
corporation organized in a qualified foreign country and engaged in the
international operation of ships and aircraft shall exclude such income from
gross income for purposes of federal income taxation provided that the
corporation can satisfy certain ownership requirements, including, among other
things, that its stock be publicly traded. A corporation's stock that is
otherwise publicly traded will fail to satisfy this requirement if it is closely
held, i.e., that 50% or more of its stock is owned by persons who each own 5% or
more of the value of the outstanding shares of the corporation's stock.
To the best of our knowledge, after due investigation, we currently qualify
as a publicly traded corporation under the proposed regulations. However,
because certain members of the Arison family and certain trusts established for
their benefit own approximately 47% of our common stock, there is the potential
that another shareholder could acquire 5% or more of our common stock which
could jeopardize our qualification as a publicly traded corporation. If we in
the future were to fail to qualify as a publicly traded corporation, we would be
subject to United States income tax on income associated with our cruise
operations in the United States. As a precautionary matter, in 2000, we amended
our articles of incorporation to ensure that we will continue to qualify as a
publicly traded corporation under the proposed regulations.
Our articles have been amended to provide that no one person or group of
related persons, other than certain members of the Arison family and certain
trusts established for their benefit, may own, or be deemed to own by virtue of
the attribution provisions of the Code, more than 4.9% of our common stock,
whether measured by vote, value or number. In addition, the articles generally
restrict the transfer of any shares of our common stock if such transfer would
cause us to be subject to United States shipping income tax. In general, the
attribution rules under the Code applicable in determining whether a person is a
5% shareholder under the proposed regulations attribute stock:
- among specified members of the same family,
- to shareholders owning 50% or more of a corporation from that corporation,
- among corporations that are members of the same controlled group,
- among grantors, beneficiaries and fiduciaries of trusts, and
- to partners of a partnership from that partnership.
For purposes of this 4.9% limit, a "transfer" will include any sale,
transfer, gift, assignment, devise or other disposition, whether voluntary or
involuntary, whether of record, constructively or beneficially, and whether by
operation of law or otherwise. The 4.9% limit will not apply to certain members
of the
41
Arison family and certain trusts established for their benefit. These
shareholders will be permitted to transfer their shares of our common stock
without complying with the limit so long as transfer does not cause us to be
subject to United States income tax on shipping operations.
Our second amended and restated articles of incorporation provide that the
board of directors may waive the 4.9% limit or transfer restrictions (in any
specific instance) if evidence satisfactory to our board of directors and our
tax counsel is presented that such ownership will not jeopardize our status as
exempt from United States income taxation on gross income from the international
operation of a ship or ships, within the meaning of Section 883 of the Code. The
board of directors may also terminate the limit and transfer restrictions
generally at any time for any reason.
If a purported transfer or other event (including owning shares of common
stock in excess of the 4.9% limit on the effective date of the proposed
amendment) results in the ownership of common stock by any shareholder in
violation of the 4.9% limit (or causes us to be subject to United States income
tax on shipping operations), such shares of common stock in excess of the 4.9%
limit or which would cause us to be subject to United States shipping income tax
will automatically be designated as "excess shares" to the extent necessary to
ensure that the purported transfer or other event does not result in ownership
of common stock in violation of the 4.9% limit (or causes us to become subject
to United States income tax on shipping operations) and any proposed transfer
that would result in such an event would be void. Any purported transferee or
other purported holder of excess shares will be required to give us written
notice of a purported transfer or other event that would result in excess
shares. The purported transferee or holders of such excess shares shall have no
rights in such excess shares, other than a right to the payments described
below.
Excess shares will not be treasury stock but rather will continue to be
issued and outstanding shares of our common stock. While outstanding, excess
shares will be transferred to a trust. The trustee of such trust will be
appointed by us and will be independent of us and the purported holder of the
excess shares. The beneficiary of such trust will be one or more charitable
organizations selected by the trustee. The trustee will be entitled to vote the
excess shares on behalf of the beneficiary. If, after the purported transfer or
other event resulting in excess shares and prior to the discovery by us of such
transfer or other event, dividends or distributions are paid with respect to
such excess shares, such dividends or distributions will be repaid to the
trustee upon demand for payment to the charitable beneficiary. All dividends
received or other income declared by the trust will be paid to the charitable
beneficiary. Upon our liquidation, dissolution or winding up, the purported
transferee or other purported holder will receive a payment that reflects a
price per share for such excess shares generally equal to the lesser of (i) in
the case of excess shares resulting from a purported transfer, the price per
share paid in the transaction that created such excess shares (or, in the case
of certain other events, the market price per share for the excess shares on the
date of such event), or (ii) in the case of excess shares resulting from an
event other than a purported transfer, the market price for the excess shares on
the date of such event.
At the direction of the board of the directors, the trustee will transfer
the excess shares held in trust to a person or persons (including us) whose
ownership of such excess shares will not violate the 4.9% limit or otherwise
cause us to become subject to United States shipping income tax within 180 days
after the later of the transfer or other event that resulted in such excess
shares or we become aware of such transfer or event. If such a transfer is made,
the interest of the charitable beneficiary will terminate, the designation of
such shares as excess shares will cease and the purported holder of the excess
shares will receive the payment described below. The purported transferee or
holder of the excess shares will receive a payment that reflects a price per
share for such excess shares equal to the lesser of (i) the price per share
received by the trustee and (ii) the price per share such purported transferee
or holder paid in the purported transfer that resulted in the excess shares (or,
if the purported transferee or holder did not give value for such excess shares
(through a gift, devise or other event) a price per share equal to the market
price on the date of the purported transfer or other event that resulted in the
excess shares). A purported transferee or holder of the excess shares will not
be
42
permitted to receive an amount that reflects any appreciation in the excess
shares during the period that such excess shares were outstanding. Any amount
received in excess of the amount permitted to be received by the purported
transferee or holder of the excess shares must be turned over to the charitable
beneficiary of the trust.
If the foregoing restrictions are determined to be void or invalid by virtue
of any legal decision, statute, rule or regulation, then the intended transferee
or holder of any excess shares may be deemed, at our option, to have acted as an
agent on our behalf in acquiring or holding such excess shares and to hold such
excess shares on our behalf.
We will have the right to purchase any excess shares held by the trust for a
period of 90 days from the later of (i) the date the transfer or other event
resulting in excess shares has occurred and (ii) the date the board of directors
determines in good faith that a transfer or other event resulting in excess
shares has occurred. The price per excess share to be paid by us will be equal
to the lesser of (i) the price per share paid in the transaction that created
such excess shares (or, in the case of certain other events, the market price
per share for the excess shares on the date of such event), or (ii) the lowest
market price for the excess shares at any time after their designation as excess
shares and prior to the date we accept such offer.
These provisions in our second amended and restated articles of
incorporation could have the effect of delaying, deferring or preventing a
change in our control or other transaction in which our shareholders might
receive a premium for their shares of common stock over the then-prevailing
market price or which such holders might believe to be otherwise in their best
interests. To the extent that the proposed regulations are either not adopted or
are adopted in form which, in the opinion of our board of directors, does not
require the proposed amendment to ensure that we will maintain its income tax
exemption for its shipping income, our board of directors may determine, in its
sole discretion, to terminate the 4.9% limit and the transfer restrictions in
the amendment.
TRANSFER AGENT AND REGISTRAR. The transfer agent and registrar for our
common stock is First Union National Bank.
OTHER PROVISIONS. Upon liquidation or dissolution, the holders of shares of
common stock are entitled to receive on a proportionate basis all of our assets
remaining for distribution to common stockholders. The common stock has no
preemptive or other subscription rights and there are no other conversion rights
or redemption or sinking fund provisions with respect to the shares. All shares
of common stock that are currently outstanding are fully paid for and may not be
assessed.
Neither Panamanian law nor our by-laws limit the right of non-resident or
foreign owners to hold or vote shares of the common stock. While no tax treaty
currently exists between the Republic of Panama and the United States, under
current law we believe that distributions to our shareholders other than
residents of Panama or other business entities conducting business in Panama,
are not subject to taxation under the laws of the Republic of Panama.
Under Panamanian law, our directors may vote by proxy.
PREFERRED STOCK
Our board of directors may issue, without further authorization from our
stockholders, up to 40,000,000 shares of preferred stock in one or more series.
Our board of directors may determine, at the time of creating each series, the
distinctive designation of, and the number of shares in, the series, its
dividend rate, the number of votes, if any, allocated to each share of the
series, the price and terms on which the shares may be redeemed, the terms of
any applicable sinking fund, the amount payable upon liquidation, dissolution or
winding up, the conversion rights, if any, and any other rights, preferences and
priorities of the shares as our board of directors may be permitted to fix under
the laws of the Republic of Panama in effect at the time the series is created.
The issuance of preferred stock could adversely affect the voting power of
holders of common stock and could delay, defer or prevent a change in control.
43
CERTAIN PANAMANIAN AND UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
PANAMA
Under current Panamanian law, because we conduct all of our operations
outside of Panama, no Panamanian taxes or withholding will be imposed on
payments to holders of our securities.
UNITED STATES
GENERAL. This is a summary of certain United States federal income tax
considerations relevant to holders of LYONs. This summary is based upon the
Internal Revenue Code of 1986, as amended, Treasury regulations, IRS rulings and
judicial decisions now in effect, all of which are subject to change (possibly
with retroactive effect) or different interpretations. There can be no assurance
that the IRS will not challenge one or more of the conclusions described herein,
and we have not obtained, nor do we intend to obtain, a ruling from the IRS with
respect to the United States federal income tax consequences of acquiring or
holding LYONs.
This summary does not purport to deal with all aspects of United States
federal income taxation that may be relevant to a holder, such as persons
subject to the alternative minimum tax provisions of the Code. Also, it does not
purport to deal with persons in special tax situations, such as insurance
companies, tax-exempt organizations, mutual funds, retirement plans, financial
institutions, dealers in securities or foreign currency, United States
expatriates, persons that hold the LYONs as part of a "straddle" or as a "hedge"
against currency risk or in connection with a conversion or another integrated
transaction for tax purposes, and persons that have functional currency other
than the United States dollar.
This summary also does not discuss the tax consequences arising under the
laws of any state, local or foreign jurisdiction. In addition, this summary is
limited to original purchasers of LYONs who acquire LYONs at their issue price
within the meaning of Section 1273 of the Code and who will hold the LYONs and
common stock into which the LYONs may be converted as "capital assets" within
the meaning of Section 1221 of the Code. The "issue price" of the LYONs will
equal the first price at which a substantial amount of the LYONs are sold for
cash to the public, not including sales to bond houses, brokers or similar
persons or organizations acting in the capacity of underwriters, placement
agents or wholesalers.
Persons considering the purchase, ownership, conversion or other disposition
of LYONs should consult their own tax advisors regarding the United States
federal income tax consequences and the consequences arising under the laws of
any state, local or foreign taxing jurisdiction.
While the following does not purport to discuss all tax matters relating to
the LYONs, and assuming the LYONs will be treated as indebtedness, the following
are the material federal income tax consequences of the LYONs, subject to the
qualifications described above.
The term "United States holder" means a beneficial owner of LYONs or common
stock into which LYONs have been converted that is, for United States federal
income tax purposes:
- a citizen or resident of the United States;
- a corporation or other entity that has elected to be treated as a
corporation, created or organized in or under the laws of the United
States or any political subdivision thereof;
- an estate, the income of which is subject to United States federal income
tax regardless of its source; or
- a trust if a court within the United States is able to exercise primary
jurisdiction over its administration and one or more United States persons
have authority to control all of its substantial decisions or if the trust
has otherwise elected to be a United States person in accordance with
applicable Treasury regulations.
44
The term "non-United States holder" means a beneficial owner, other than a
partnership, of LYONs or common stock into which LYONs have been converted that
is not a United States holder for United States federal income tax purposes.
If a partnership, including for this purpose any entity treated as a
partnership for United States tax purposes, is a beneficial owner of LYONs or
common stock into which LYONs have been converted, the treatment of a partner in
the partnership will generally depend upon the status of the partner and upon
the activities of the partnership. A holder of LYONs that is a partnership, and
partners in such a partnership, should consult their tax advisors about the
United States federal income tax consequences of holding and disposing of LYONs
and common stock into which LYONs have been converted.
UNITED STATES HOLDERS
ORIGINAL ISSUE DISCOUNT. The LYONs are being issued at a substantial
discount from their principal amount at maturity. For United States federal
income tax purposes, the difference between the issue price and the stated
principal amount at maturity of each LYON constitutes original issue discount.
United States holders of the LYONs will be required to include original issue
discount in income periodically over the term of the LYONs before receipt of the
cash or other payment attributable to such income.
A United States holder of a LYON must include in gross income for United
States federal income tax purposes the sum of the daily portions of original
issue discount with respect to the LYON for each day during the taxable year or
portion of a taxable year on which such holder holds the LYON. The daily portion
is determined by allocating to each day of an accrual period a pro rata portion
of an amount equal to the adjusted issue price of the LYON at the beginning of
the accrual period multiplied by the yield to maturity of the LYON. The accrual
period of a LYON may be of any length and may vary in length over the term of
the LYON, provided that each accrual period is no longer than one year. The
adjusted issue price of the LYON at the start of any accrual period is the issue
price of the LYON increased by the accrued original issue discount for each
prior accrual period. Under these rules, United States holders will have to
include in gross income increasingly greater amounts of original issue discount
in each successive accrual period. Any amount included in income as original
issue discount will increase a United States holder's tax basis in the LYON.
We will be required to furnish annually to the IRS and to certain
noncorporate United States holders information regarding the amount of the
original issue discount attributable to that year. For this purpose, we will use
a six-month accrual period which ends on the day in each calendar year
corresponding to the maturity day of the LYON or the date six months before such
maturity date.
DISPOSITION OR CONVERSION. Except as described below, gain or loss upon a
sale or other disposition of a LYON will generally be capital gain or loss,
which will be long-term if the LYON is held for more than one year. Net capital
gains of a non-corporate United States holder are, under certain circumstances,
taxed at lower rates than items of ordinary income. In the case of a
non-corporate United States holder, long-term capital gains are generally taxed
at a maximum 20% federal tax rate. Net capital gains of a corporate United
States holder are taxed at the same rates as ordinary income, with a maximum
federal rate of 35%. The deductibility of capital losses is subject to
limitations.
A conversion of a LYON into common stock, and the use of common stock to
repurchase a LYON, whether at the option of the holder or us, will not be a
taxable event except with respect to cash received in lieu of a fractional
share. The United States holder's obligation to include in gross income the
daily portions of original issue discount with respect to a LYON will terminate
prospectively on the date of conversion. The United States holder's basis in the
common stock received for a LYON will be the same as the United States holder's
basis in the LYON at the time of conversion or exchange, exclusive of any tax
basis allocable to a fractional share.
If a United States holder elects to exercise its option to tender a LYON to
us and the purchase price is paid in a combination of shares of common stock and
cash (other than cash received in lieu of
45
a fractional share), gain (but not loss) realized by the United States holder
will be recognized, but only to the extent such gain does not exceed that cash.
Generally, that gain will be capital gain and will be long-term if the holding
period for that LYON is more than one year. A United States holder's tax basis
in the common stock received in the exchange will equal the United States
holder's tax basis in the LYON tendered to us, exclusive of any tax basis
allocable to a fractional share interest as described below, decreased by the
amount of cash (other than cash received in lieu of a fractional share), if any,
received in exchange and increased by the amount of any gain recognized by the
United States holder on the exchange (other than gain with respect to a
fractional share).
If a United States holder elects to exercise its option to tender a LYON to
us and we deliver cash in satisfaction of the purchase price, the United States
holder will recognize gain or loss, measured by the difference between the
amount of the cash and the United States holder's basis in the tendered LYON.
Gain or loss recognized by the United States holder will generally be capital
gain or loss, which gain or loss will be long-term if the holding period for
such LYON is more than one year.
Cash received in lieu of a fractional share of common stock upon conversion
of a LYON or upon a put of a LYON to us on a purchase date should be treated as
a payment in exchange for the fractional share. Accordingly, the receipt of cash
in lieu of a fractional share of common stock should generally result in capital
gain or loss, if any, measured by the difference between the cash received for
the fractional share and the holder's basis in the fractional share.
Gain or loss upon a sale or other disposition of the common stock received
upon conversion of a LYON or in satisfaction of the purchase price of a LYON put
to us generally will be capital gain or loss (which gain or loss will be
long-term if the holding period for such common stock is more than one year).
The holding period for common stock received in exchange will include the
holding period for the LYON tendered to us in exchange for the common stock.
However, the holding period for common stock attributable to accrued original
issue discount may commence on the day following the conversion or purchase
date.
DIVIDENDS. If a United States holder receives common stock, in general,
distributions on the common stock that are paid out of our current or
accumulated earnings and profits (as defined for United States federal income
tax purposes) will constitute taxable dividends and will be includible in income
by a holder in accordance with that holder's method of accounting for United
States federal income tax purposes.
CONSTRUCTIVE DIVIDEND. If at any time we make a distribution of property to
our stockholders that would be taxable to the stockholders as a dividend for
United States federal income tax purposes and, in accordance with the
anti-dilution provisions of the LYONs, the conversion rate of the LYONs is
increased (or if the conversion rate is increased at our discretion), the
increase may be deemed to be the payment of a taxable dividend to holders of the
LYONs.
For example, an increase in the conversion rate in the event of
distributions of evidences of indebtedness or our assets or an increase in the
event of an extraordinary cash dividend will generally result in deemed dividend
treatment to holders of the LYONs, but generally an increase in the event of
stock dividends or the distribution of rights to subscribe for common stock will
not. See "Description of LYONs--Conversion Rights."
BACKUP WITHHOLDING AND INFORMATION REPORTING. Information reporting will
apply to payments of interest (including accruals of original issue discount) or
dividends, if any, made by us on, or the proceeds of the sale or other
disposition of, the LYONs or shares of common stock with respect to certain
non-corporate United States holders, and backup withholding may apply unless the
recipient United States holder of such payment supplies a taxpayer
identification number, certified under penalties of perjury, as well as certain
other information or otherwise establishes an exemption from backup withholding.
Any amount withheld under the backup withholding rules will be allowable as a
credit against the United States holder's United States federal income tax,
provided that the required information is provided to the IRS.
46
NON-UNITED STATES HOLDERS
ORIGINAL ISSUE DISCOUNT AND DISPOSITION. In general and subject to the
discussion below under "--Backup Withholding and Information Reporting," a
non-United States holder will not be subject to United States federal income or
withholding tax with respect to original issue discount with respect to LYONs or
gain upon the disposition of LYONs or shares of common stock, unless:
- the income or gain is "United States trade or business income," which
means income or gain that is effectively connected with the conduct by the
non-United States holder of a trade or business, or, in the case of a
treaty resident, attributable to a permanent establishment or a fixed
base, in the United States, or
- such non-United States holder is an individual who is present in the
United States for 183 days or more in the taxable year of disposition and
certain other conditions are met.
United States trade or business income of a non-United States holder will
generally be subject to regular United States income tax in the same manner as
if it were realized by a United States holder. Non-United States holders that
realize United States trade or business income with respect to the LYONs or
shares of common stock should consult their tax advisers as to the treatment of
such income or gain. In addition, United States trade or business income of a
non-United States holder that is a non-United States corporation may be subject
to a branch profits tax at a rate of 30%, or such lower rate provided by an
applicable income tax treaty.
BACKUP WITHHOLDING AND INFORMATION REPORTING. If the LYONs, or shares of
common stock into which LYONs have been converted, are held by a non-United
States holder through a non-United States, and non-United States related, broker
or financial institution, information reporting and backup withholding generally
would not be required. Information reporting, and possibly backup withholding,
may apply if the LYONs or shares of common stock are held by a non-United States
holder through a United States, or United States related, broker or financial
institution and the non-United States holder fails to provide appropriate
information. Non-United States holders should consult their tax advisers.
EXPERTS
The financial statements incorporated in this prospectus by reference to the
Annual Report on Form 10-K for the year ended November 30, 2000 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent certified public accountants, given on the authority of said firm as
experts in auditing and accounting.
LEGAL MATTERS
The validity of the offered LYONs has been passed upon by Paul, Weiss,
Rifkind, Wharton & Garrison, New York, New York. The validity of the shares of
the offered common stock has been passed upon by Tapia Linares y Alfaro, Panama
City, Republic of Panama.
James M. Dubin, a partner of Paul, Weiss, Rifkind, Wharton & Garrison and
one of our directors, is the sole stockholder of three corporations which act as
trustees or protectors of various trusts established for the benefit of members
of the Arison family. In this capacity, Mr. Dubin has shared voting or
dispositive rights for approximately 24.9% of our outstanding common stock.
Paul, Weiss, Rifkind, Wharton & Garrison also serves as counsel to Micky Arison,
our chairman and chief executive officer, Shari Arison, one of our directors,
and other Arison family members and trusts.
47
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses payable in connection
with the issuance and distribution of the debentures and underlying common stock
being registered hereby, other than underwriting discounts and commissions
(which will be described in the applicable prospectus supplement). All the
amounts shown are estimates, except the SEC registration fee. All of such
expenses are being borne by us.
SEC Registration Fee........................................ $119,501
New York Stock Exchange Listing Fee......................... $
Accounting Fees and Expenses................................ $
Legal Fees and Expenses..................................... $
Printing and Engraving Expenses............................. $
--------
Total....................................................... $
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our second amended and restated articles of incorporation and by-laws
provide, subject to the requirements set forth therein, that with respect to any
person who was or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, we shall indemnify such person by reason of the fact that he is
or was one of our director or an officer, and may indemnify such person by
reason of the fact that he is or was one of our employees or agents or is or was
serving at our request as a director, officer, employee or agent in another
corporation, partnership, joint venture, trust or other enterprise, in either
case against expenses (including attorney's fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to our best interests and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. We have entered into indemnity agreements with Shari
Arison, Maks L. Birnbach, Richard G. Capen, Jr., Arnold W. Donald, James M.
Dubin, Modesto Maidique, Stuart Subotnick, Sherwood M. Weiser, Meshulam Zonis
and Uzi Zucker providing essentially the same indemnities as are described in
the our second amended and restated articles of incorporation.
Under a registration rights agreement among us and certain irrevocable
trusts (the "Trusts"), the Trusts have agreed to indemnify us, our directors and
officers and each person who controls us within the meaning of the Exchange Act,
against certain liabilities. Under a registration agreement between us and
selling holders of our 2% convertible senior debentures due 2021, these selling
holders have agreed to indemnify us, our directors and officers and each person
who controls us within the meaning of the Exchange Act against certain
liabilities. Finally, under a registration agreement between us and the selling
securityholders, the selling securityholders have agreed to indemnify us, our
directors and officers and each person who controls us within the meaning of the
Exchange Act against certain liabilities.
II-1
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
4.1 Second Amended and Restated Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit No. 3 to
the Registrant's registration statement on Form S-3,
File No. 333-68999, filed with the Securities and Exchange
Commission).
4.2 Amendment to Second Amended and Restated Articles of
Incorporation of the Registrant (incorporated by reference
to Exhibit 3.1 to the Registrant's quarterly report on Form
10-Q for the quarter ended May 31, 1999, filed with the
Securities and Exchange Commission).
4.3 Certificate of Amendment of Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.1 to the
Registrant's quarterly report on Form 10-Q for the quarter
ended May 31, 2000, filed with the Securities and Exchange
Commission).
4.4 Form of By-laws of the Registrant (incorporated by reference
to Exhibit 3.2 to the Registrant's registration statement on
Form S-1, File No. 33-14844, filed with the Securities and
Exchange Commission).
4.5 Indenture, dated as of April 25, 2001, between Carnival
Corporation and U.S. Bank Trust National Association, as
trustee, relating to unsecured and unsubordinated debt
securities (incorporated by reference to Exhibit No. 4.5 to
the Registrant's registration statement on
Form S-3, File No. 333-62950, filed with the Securities
Exchange Commission).
4.6 Second Supplemental Indenture, dated as of October 24, 2001,
between Carnival Corporation and U.S. Bank Trust National
Association, as trustee, creating a series of securities
designated Liquid Yield Option-TM-Notes due 2021 (Zero
Coupon--Senior).
4.7 Registration Rights Agreement, dated as of October 24, 2001,
between Carnival Corporation and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated.
5.1 Opinion of Paul, Weiss, Rifkind, Wharton & Garrison.
5.2 Opinion of Tapia Linares y Alfaro.
12.1 Ratios of Earnings to Fixed Charges (incorporated by
reference to Exhibit 12 to the Registrant's quarterly report
on Form 10-Q for the quarter ended August 31, 2001, filed
with the Securities and Exchange Commission).
12.2 Ratios of Earnings to Fixed Charges (incorporated by
reference to Exhibit 12 to the Registrant's annual report on
Form 10-K for the fiscal year ended November 30, 2000, filed
with the Securities and Exchange Commission).
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Paul, Weiss, Rifkind, Wharton & Garrison
(included in Exhibit 5.1).
23.3 Consent of Tapia Linares y Alfaro (included in Exhibit 5.2).
24 Power of Attorney.
25.1 Statement of Eligibility under the Trust Indenture Act of
1939 on Form T-1 of U.S Bank Trust National Association to
act as Trustee under the Indenture, dated as of April 25,
2001, as supplemented by the Second Supplemental Indenture,
dated as of October 24, 2001 (incorporated by reference to
Exhibit No. 25.1 to the Registrant's registration statement
on Form S-3 File No. 333-62950, filed with the Securities
Exchange Commission).
II-2
ITEM 17. UNDERTAKINGS
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form
of a prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement; provided, however, that paragraphs (1)(i)
and (1)(ii) do not apply if the information required to be included
in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement;
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering;
(4) That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof; and
(5) To file an application for the purpose of determining the eligibility of
the trustee to act under subsection (a) of Section 310 of the Trust
Indenture Act of 1939 in accordance with the rules and regulations
prescribed by the Commission under Section 305(b)(2) of the Trust
Indenture Act of 1939.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be filed on its behalf by the undersigned, thereunto duly
authorized, in the City of Miami, State of Florida, on the 29th day of November,
2001.
CARNIVAL CORPORATION
By: /s/ Micky Arison
---------------------------------------------
Name: Micky Arison
Title: Chairman of the Board, Chief Executive
Officer and Director
KNOW TO ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Micky Arison, Howard S. Frank and Gerald R.
Cahill, such person's true and lawful attorney-in-fact and agents, with full
power of substitution and revocation for such person and in such person's name,
place and stead, in any and all capacities to sign any and all amendments
(including post-effective amendments) to this Registration Statement or any
registration statement filed pursuant to Rule 462 under the Securities Act of
1933, and to file the same with all exhibits thereto, and the other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and things requisite and necessary to be done,
as fully to all intents and purposes as such person might or could do in person,
hereby ratifying and confirming all said attorney-in-fact and agents, or any of
them, or their and his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ MICKY ARISON Chairman of the Board, Chief November 29, 2001
------------------------------------ Executive Officer and Director
Micky Arison (Principal Executive Officer)
/s/ HOWARD S. FRANK Vice Chairman of the Board, Chief November 29, 2001
------------------------------------ Operating Officer and Director
Howard S. Frank
/s/ GERALD R. CAHILL Senior Vice President--Finance and November 29, 2001
------------------------------------ Chief Financial and Accounting
Gerald R. Cahill Officer
/s/ SHARI ARISON Director November 29, 2001
------------------------------------
Shari Arison
/s/ MAKS L. BIRNBACH Director November 29, 2001
------------------------------------
Maks L. Birnbach
Director November 29, 2001
------------------------------------
Richard G. Capen, Jr.
II-4
SIGNATURE TITLE DATE
--------- ----- ----
/s/ ROBERT H. DICKINSON Director November 29, 2001
------------------------------------
Robert H. Dickinson
/s/ ARNOLD W. DONALD Director November 29, 2001
------------------------------------
Arnold W. Donald
/s/ JAMES M. DUBIN Director November 29, 2001
------------------------------------
James M. Dubin
/s/ A. KIRK LANTERMAN Director November 29, 2001
------------------------------------
A. Kirk Lanterman
Director November 29, 2001
------------------------------------
Modesto A. Maidique
/s/ STUART SUBOTNICK Director November 29, 2001
------------------------------------
Stuart Subotnick
/s/ SHERWOOD M. WEISER Director November 29, 2001
------------------------------------
Sherwood M. Weiser
Director November 29, 2001
------------------------------------
Meshulam Zonis
Director November 29, 2001
------------------------------------
Uzi Zucker
II-5
EXHIBIT INDEX
4.1 Second Amended and Restated Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit No. 3 to
the Registrant's registration statement on Form S-3,
File No. 333-68999, filed with the Securities and Exchange
Commission).
4.2 Amendment to Second Amended and Restated Articles of
Incorporation of the Registrant (incorporated by reference
to Exhibit 3.1 to the Registrant's quarterly report on Form
10-Q for the quarter ended May 31, 1999, filed with the
Securities and Exchange Commission).
4.3 Certificate of Amendment of Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.1 to the
Registrant's quarterly report on Form 10-Q for the quarter
ended May 31, 2000, filed with the Securities and Exchange
Commission).
4.4 Form of By-laws of the Registrant (incorporated by reference
to Exhibit 3.2 to the Registrant's registration statement on
Form S-1, File No. 33-14844, filed with the Securities and
Exchange Commission).
4.5 Indenture, dated as of April 25, 2001, between Carnival
Corporation and U.S. Bank Trust National Association, as
trustee, relating to unsecured and unsubordinated debt
securities (incorporated by reference to Exhibit No. 4.5 to
the Registrant's registration statement on
Form S-3, File No. 333-62950, filed with the Securities
Exchange Commission).
4.6 Second Supplemental Indenture, dated as of October 24, 2001,
between Carnival Corporation and U.S. Bank Trust National
Association, as trustee, creating a series of securities
designated Liquid Yield Option-TM-Notes due 2021 (Zero
Coupon--Senior).
4.7 Registration Rights Agreement, dated as of October 24, 2001,
between Carnival Corporation and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated.
5.1 Opinion of Paul, Weiss, Rifkind, Wharton & Garrison.
5.2 Opinion of Tapia Linares y Alfaro.
12.1 Ratios of Earnings to Fixed Charges (incorporated by
reference to Exhibit 12 to the Registrant's quarterly report
on Form 10-Q for the quarter ended August 31, 2001, filed
with the Securities and Exchange Commission).
12.2 Ratios of Earnings to Fixed Charges (incorporated by
reference to Exhibit 12 to the Registrant's annual report on
Form 10-K for the fiscal year ended November 30, 2000, filed
with the Securities and Exchange Commission).
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Paul, Weiss, Rifkind, Wharton & Garrison
(included in Exhibit 5.1).
23.3 Consent of Tapia Linares y Alfaro (included in Exhibit 5.2).
24 Power of Attorney.
25.1 Statement of Eligibility under the Trust Indenture Act of
1939 on Form T-1 of U.S Bank Trust National Association to
act as Trustee under the Indenture, dated as of April 25,
2001, as supplemented by the Second Supplemental Indenture,
dated as of October 24, 2001 (incorporated by reference to
Exhibit No. 25.1 to the Registrant's registration statement
on Form S-3 File No. 333-62950, filed with the Securities
Exchange Commission).