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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                            -------------------------


                                    FORM 10-K


            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
                      FOR THE YEAR ENDED DECEMBER 31, 2000

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

                         COMMISSION FILE NUMBER: 0-9264


                          AMERICAN CLASSIC VOYAGES CO.
             (Exact name of registrant as specified in its charter)

           DELAWARE                                    31-0303330
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

   TWO NORTH RIVERSIDE PLAZA, CHICAGO, ILLINOIS                  60606
     (Address of principal executive offices)                  (Zip Code)

                                 (312) 258-1890
              (Registrant's telephone number, including area code)

        Securities registered pursuant to Section 12(b) of the Act: NONE

           Securities registered pursuant to Section 12(g) of the Act:

                          COMMON STOCK, $.01 PAR VALUE
                                (Title of Class)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

The aggregate market value of voting stock held by non-affiliates of the
registrant was $221.4 million based upon the last reported sale price of $16.25
per share on February 28, 2001 on The NASDAQ Stock Market. Using beneficial
ownership of stock rules adopted pursuant to Section 13 of the Securities
Exchange Act of 1934, certain persons designated as affiliates for purposes of
this computation may not be held to be affiliates upon judicial determination.

As of February 28, 2001, there were 21,027,923 shares of Common Stock
outstanding.

                 DOCUMENTS INCORPORATED BY REFERENCE:
PART III   --    Portions of the registrant's definitive Proxy Statement, which
                 will be filed with the Securities and Exchange Commission by
                 April 27, 2001.

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                          AMERICAN CLASSIC VOYAGES CO.


                                      INDEX

<TABLE>
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ITEM DESCRIPTION                                                                                      PAGE
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<S>          <C>                                                                                      <C>
Part I

             Item 1   --    Business.................................................................    3
             Item 2   --    Properties...............................................................   13
             Item 3   --    Legal Proceedings........................................................   14
             Item 4   --    Submission of Matters to a Vote of Security Holders......................   14

Part II
             Item 5   --    Market for Registrant's Common Equity and Related
                            Stockholder Matters......................................................   15
             Item 6   --    Selected Financial Data..................................................   16
             Item 7   --    Management's Discussion and Analysis of Financial
                            Condition and Results of Operations......................................   17
             Item 7A  --    Quantitative and Qualitative Disclosures About Market Risk...............   23
             Item 8   --    Financial Statements and Supplementary Data..............................   24
             Item 9   --    Changes in and Disagreements with Accountants
                            on Accounting and Financial Disclosure...................................   49

Part III
             Item 10  --    Directors and Executive Officers of the Registrant.......................   49
             Item 11  --    Executive Compensation...................................................   49
             Item 12  --    Security Ownership of Certain Beneficial Owners
                            and Management...........................................................   49
             Item 13  --    Certain Relationships and Related Transactions...........................   49

Part IV
             Item 14  --    Exhibits, Financial Statement Schedules,
                            and Reports on Form 8-K..................................................   49
</TABLE>


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                          AMERICAN CLASSIC VOYAGES CO.

                                     PART I

ITEM 1.  BUSINESS

GENERAL
American Classic Voyages Co. ("the Company") is the leading provider of
overnight passenger cruises among the Hawaiian Islands and on the inland rivers
and coastal waterways of North America. We currently operate four cruise lines
under the names American Hawaii Cruises, The Delta Queen Steamboat Co., Delta
Queen Coastal Voyages and United States Lines. American Hawaii, acquired in
August 1993, operates the S.S. Independence, a U.S.-flagged ocean liner with 860
total passenger berths. American Hawaii provides inter-island cruises on a
year-round basis among the Hawaiian Islands. The Delta Queen Steamboat Co.
currently operates the Delta Queen, American Queen and Mississippi Queen,
U.S.-flagged paddlewheel steamboats having 1,026 total passenger berths, and, as
of May 27, 2000 introduced a fourth riverboat, the Columbia Queen, which has 157
passenger berths. This new vessel added the Columbia River system of the Pacific
Northwest to Delta Queen's previously existing set of cruise vacations on the
Mississippi, Ohio, Cumberland, Tennessee, Arkansas, Illinois and Atchafalaya
Rivers. Delta Queen Coastal Voyages will operate the cv Cape May Light and cv
Cape Cod Light, currently scheduled to be introduced in May and the fourth
quarter of 2001 respectively. These new vessels will offer cruises along U.S.
coastal waterways. United States Lines currently operates the ms Patriot, a
1,212-passenger vessel which was acquired from Holland America Line on October
18, 2000 and put into service on December 9, 2000. The ms Patriot offers
seven-day cruise vacations throughout the Hawaiian Islands, sailing from Oahu to
Kauai, Maui, and the island of Hawaii. We do not offer gaming on any of our
vessels.

American Classic Voyages Co. is a Delaware corporation incorporated in 1985 as a
holding company that owns and controls The Delta Queen Steamboat Co., which
operates the Delta Queen riverboats and the Delta Queen Coastal Voyages vessels
through various subsidiaries, Great Hawaiian Cruise Line, Inc., which operates
American Hawaii through various subsidiaries, and Project America, Inc., which
operates United States Lines through various subsidiaries. American Classic
Voyages Co.'s principal executive offices are located at Two North Riverside
Plaza, Suite 200, Chicago, Illinois 60606. The principal administrative offices
of Delta Queen, American Hawaii and United States Lines are located in New
Orleans, Louisiana.

We are the largest owner and operator of U.S.-flag passenger vessels. Under the
Passenger Vessel Act of 1886 and related U.S. laws, only U.S. ships that are (1)
U.S. built, (2) owned by U.S. citizens, (3) operated by U.S. crews and officers,
and (4) U.S.-flagged by the U.S. Coast Guard are permitted to operate
exclusively among U.S. ports, including the islands of Hawaii. We are the only
U.S.-flagged, large scale, overnight cruise line operator providing inter-island
vacations among the Hawaiian Islands.

Accordingly, we believe our U.S.-flagged designation provides us with
significant itinerary advantages. Our cruises can visit and explore the beauty
and attractions of the various Hawaiian Islands without having to include a
foreign port in our itineraries, which would involve at least three sailing days
on the Pacific Ocean. On inland U.S. waterways, where Delta Queen operates, the
Passenger Vessel Act requirements effectively prohibit foreign-flagged vessels
from offering competing itineraries.

The U.S. Flag Cruise Ship Pilot Project Statute was enacted in 1997 to develop
the U.S.-flagged cruise ship industry and stimulate commercial construction of
cruise ships in the U.S. In connection with our execution of a definitive
agreement with Ingalls Shipbuilding to construct at least two new vessels in a
U.S. shipyard (see page 6, Hawaii Expansion Plans for a more detailed discussion
of our new Hawaii vessels), we believe that we will have (1) the exclusive right
to operate large U.S.-flagged cruise ships in the domestic trade among the
Hawaiian Islands for the life expectancy of the vessels and (2) the right to
operate the ms Patriot as a U.S.-flagged ship in the Hawaiian Islands for a
period of two years following delivery of the final new vessel under the
contract. The terms of the statute require, among other things, that the new
cruise ships are built with more than 867 berths each, that delivery of the
first vessel be prior to January 1, 2005 and that the second vessel be delivered
prior to January 1, 2008. The statute does not restrict the activities of small
U.S.-flagged cruise ships with fewer than 275 passengers and fewer than 10,000
gross tons.





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CURRENT OPERATIONS

AMERICAN HAWAII
American Hawaii's cruise ship, the S.S. Independence, operates inter-island
cruise vacations among the Hawaiian Islands year round. Built in 1951, the S.S.
Independence has 860 passenger berths. American Hawaii offers primarily
seven-day itineraries with ports of call throughout the Hawaiian Islands. On
November 11, 2000 the S.S. Independence was moved to a new homeport in Kahului,
Maui and the ports of Hilo, Hawaii, Kona, Hawaii, Honolulu, Oahu and Nawiliwili,
Kauai compose the vessel's remaining itinerary. The itinerary affords an
opportunity to view Mount Kilauea, one of the world's few active volcanoes, and
the soaring sea cliffs of the inaccessible Na Pali coast. Many cruise passengers
also choose to extend their stay in Hawaii, purchasing hotel accommodations
through American Hawaii. American Hawaii offers more than 50 optional shore
excursion activities to passengers to showcase the spectacular Hawaiian scenery
and local attractions.

Cruise fares on American Hawaii for a seven-day cruise, as stated in the
2000/2001 cruise brochure, range from luxurious suites at $3,549 per person to
interior cabins with a single sofa bed and fold-away upper berth at $1,349 per
person, based on double occupancy. The fare includes meals, nightly
entertainment on the vessel and port charges. American Hawaii also offers
seasonal youth programs to attract passengers with children, as the S.S.
Independence has a large number of cabins that can accommodate three and four
passengers.

UNITED STATES LINES
United States Lines' ms Patriot offers seven-day cruise vacations throughout the
Hawaiian Islands, sailing from Oahu to Kauai, Maui, and the island of Hawaii.
Guests on the 1,212-passenger ms Patriot are able to select numerous shore
excursions featuring some of the Hawaiian Islands' most beautiful attractions.
The ms Patriot cruises feature American and Hawaiian regional cuisine, a
cultural enrichment program and nightly showplace entertainment.

Originally named the ms Nieuw Amsterdam, the vessel was acquired on October 18,
2000 from Holland America Line and renamed the ms Patriot upon its delivery to
United States Lines. We are operating it as a U.S.-flagged vessel in the
Hawaiian market, as we are permitted to do under the terms of the Pilot Project
Statute. The vessel's inaugural voyage took place in December 2000. It has nine
public decks with 607 passenger staterooms, 68% of which are outside cabins, and
includes 20 suites. It features two outdoor swimming pools, a spa, a gymnasium,
a two-deck main lounge and six additional lounges and bars, as well as a
spacious dining room, an indoor/outdoor cafe, a boutique and seven passenger
elevators. Upon taking delivery, we renovated portions of the vessel by adding a
destination learning center, family activities center, and upgrading the
conference and meeting facilities and other passenger facilities on board. The
cost of the renovations amounted to approximately $20.4 million.

The cruise fares on the ms Patriot for a seven-day cruise, as stated in the
2000/2001 cruise brochure, range from luxurious suites at $4,099 per person to
interior cabins with two or more berths at $1,699 per person, based on double
occupancy during the peak travel season. The fare also includes meals and
nightly entertainment on the vessel.

Our Hawaii cruise products are marketed as the best way to experience and enjoy
Hawaii, and as a convenient and rewarding alternative to land-based multi-island
vacations. We accomplish this by focusing on onboard dining, entertainment, and
by offering an extensive package of shore excursions at all stops along the
itinerary, as well as by providing a wide variety of activities, demonstrations
and lectures designed to enhance passengers' overall experience of the unique
Hawaiian culture. In addition, United States Lines and American Hawaii offer
additional services and products to its passengers, including bar services,
beauty salon services, photography services, shore excursions and gift shop
products. In order to facilitate and simplify passengers' travel planning
process, we offer air transportation arrangements to and from the Hawaiian
Islands through agreements with several major commercial airlines as well as
trip cancellation insurance.

American Hawaii's and United States Lines' marketing efforts target consumers
who are interested in Hawaii, cruise enthusiasts and other consumers who fit
certain demographic or geographic profiles. We send out more than five million
pieces of direct mail annually to reach these potential customers. The travel
agency community receives cooperative direct mail and periodic fax broadcasts.
In addition, we place advertisements in specialized publications and have been
the subject of numerous feature articles in national travel and leisure
magazines and newspaper travel sections.



                                       4
<PAGE>   5
DELTA QUEEN STEAMBOAT CO.
Delta Queen's three paddlewheel steamboats offer cruise itineraries for trips
along the Mississippi, Ohio, Cumberland, Tennessee, Arkansas, Illinois and
Atchafalaya Rivers, as well as the Intracoastal Waterway. Ports visited, which
are typically locations of historical or cultural significance, include New
Orleans, Memphis, St. Louis, St. Paul, Louisville, Cincinnati, Pittsburgh,
Nashville, Chattanooga, Galveston, Vicksburg, and Hannibal. Delta Queen promotes
special cruise packages revolving around specific themes which allow passengers
to participate in activities, meet special guest lecturers, and enjoy
entertainment relevant to the theme. Seasonal theme vacations include "Kentucky
Derby" cruises that include attendance at the Kentucky Derby horse race, "Civil
War" and "Cajun Culture" theme cruises.

In May 2000 we introduced the Columbia Queen riverboat as the fourth member of
our Delta Queen fleet. The Columbia Queen operates approximately 9 months out of
the year from its homeport of Portland, Oregon and traverses the Columbia, Snake
and Willamette Rivers in the Pacific Northwest. Itineraries focus on providing
passengers with an adventurous and educational cruise experience. Its 8-night
vacation package features an overnight stay in Portland, a visit to Mount St.
Helens National Monument, a 7-night cruise and many adventurous excursions from
the coastal town of Astoria, Oregon to Hells Canyon in Lewiston,
Idaho.

Delta Queen is marketed to mature adult travelers as a unique vacation
experience aboard classic steamboats in which the people, sights, romance and
history of heartland America and the Pacific Northwest are explored. We believe
individuals are attracted to our riverboat cruises because of the quality of our
service, dining, accommodations and entertainment, as well as the unique
characteristics of the steamboat experience and its connection to American
history.

The Steamboatin' cruise fare for an average five-day cruise, as stated in the
2001 cruise brochure, ranges from luxurious suites at $3,365 per person to
interior cabins with lower and upper passenger berths at $1,465 per person,
based on double occupancy. The Columbia Queen eight-night fare ranges from
luxurious suites at $4,310 per person to interior cabins at $3,110 per person
during the peak traveling season. The fares also include meals, day and night
entertainment on the vessels and port charges.

DELTA QUEEN COASTAL VOYAGES
In order to capitalize upon its strong market position and brand name
recognition, Delta Queen is expanding its current business by introducing at
least two new vessels capable of offering cruises along U.S. coastal waterways.
By extending the Delta Queen line beyond our country's heartland to the
underserved coastal markets, Delta Queen offers its unique cruising experience
to destinations of historical or cultural interest, as well as those known for
their natural beauty. We are constructing the first two coastal cruise vessels
at Atlantic Marine, Inc. of Jacksonville, Florida. The first vessel, the cv Cape
May Light, is scheduled to be delivered in April 2001 and the second vessel, the
cv Cape Cod Light, is expected to be delivered in the third quarter of 2001.
Each coastal vessel will be approximately 300 feet long, have diesel-electric
propulsion systems and "state-of-the-art" safety technology. The total project
cost for each new vessel is approximately $40 to $42 million.

The new Delta Queen coastal cruise vessels have an historic design inspired by
the Fall River Line vessels which traveled between New York and New England from
1847 through 1937 and became symbolic of elegant transportation and gracious
service. The new vessels will be decorated in classic New England federal and
nautical decor reminiscent of turn-of-the-century coastal ships, featuring the
"first-class" amenities for which Delta Queen steamboats have come to be known.
Approximately 90% of the passenger berths on each of the vessels will be in
outside cabins. The new vessels will each have features such as elegant dining
rooms with fine artwork, architectural embellishments and windows, a grand salon
for entertainment, two bars, and other services typically offered on Delta Queen
steamboats.

Atlantic Coast destinations featured in the 2001 cruise brochure include
Martha's Vineyard, Halifax, Nova Scotia, Boston Harbor, the Chesapeake Bay, New
York City, Washington, D.C., Charleston, SC and Savannah, GA. Itineraries for
the 2001/2002 winter traveling season include Belize, Costa Rica, Honduras,
Mexico and Panama.

To attract additional customers, Delta Queen has developed products which
combine its riverboat and coastal cruises with escorted tours and overnight
stays at historic port cities. As a convenience to its passengers, Delta Queen
will also arrange hotel accommodations and air and land transportation to and
from the cruise embarkation and disembarkation points.

Delta Queen annually welcomes back a large number of prior passengers through
its relationship marketing program. New passengers are acquired through direct
response advertising, advertising in trade and consumer publications and other
promotional activity. Each year a significant number of new customers are
referred by prior customers.



                                       5
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SALES AND MARKETING
We maintain one field sales force and one common reservation staff for Delta
Queen, American Hawaii and United States Lines. We sell our cruise products
primarily through two major channels, of which the most significant channel is
travel agents operating throughout the U.S. We have programs that educate travel
agents about the unique nature of our travel experiences, the vessels'
itineraries, special programs, theme cruises and pricing policies. To assist in
generating reservations from travel agents, we engage in both consumer and
trade-oriented advertising, including direct mailings of our cruise lines'
literature to travel agencies. We also maintain contact with travel agents
through our field sales personnel who conduct educational seminars and attend
trade shows. Our second major sales channel is group travel organizers,
consisting of clubs, travel agencies and tour operators who arrange for the sale
of cruise vacations at discounted fares. We provide a variety of incentives to
these organizers, including fare discounts and promotional materials. During
fiscal 2000, no single customer accounted for more than 10% of our consolidated
revenues.

PRICING AND ADVANCE RESERVATIONS
We issue separate full color sales brochures for The Delta Queen Steamboat Co.,
American Hawaii, United States Lines and Delta Queen Coastal Voyages, which
contain descriptive information, itineraries and fare schedules, prior to the
beginning of each upcoming calendar year. We price our cruise fares, based on
cabin category, using a single pricing schedule for each cruise line throughout
the calendar year, except for the Columbia Queen and the ms Patriot, which are
priced seasonally. As an inducement for passengers to book early, we generally
offer an early booking discount which typically consists of the current year's
fares to passengers who book more than six to eight months in advance for the
upcoming year. In addition, we offer to group travel organizers and others
limited discounts from our published fare schedules.

We actively market our cruises up to one year prior to the cruise year and the
level of advance reservations at any given date provides us with an indication
of our future fare revenue. A significant portion of such reservations is booked
more than six months in advance of the cruise date. Generally, customers of each
cruise line must pay a $300 refundable deposit within one week of booking a
cruise with the balance of the cruise fare to be remitted 60 days in advance of
the departure date. Depending upon the proximity of a cancellation to the cruise
date, customers may lose some or all of their deposits or cruise fares. For a
nominal fee, we also offer trip cancellation insurance through a third-party
insurer, which allows the customers to reduce their exposure to cancellation
charges. As of February 29, 2000, advance reservations for the 2000 cruise year
were $58.5 million. As of February 28, 2001, advance reservations for the 2001
cruise year were $63.3 million. However, we cannot specifically determine the
amount of revenues to be derived from advance reservations as we cannot
guarantee that any particular advance reservation will result in any revenue to
us. Capacity in the Hawaii cruise market has more than doubled in 2001 due to
the introduction of the ms Patriot and additional visits by foreign flagged
ships. As a result, we have been discounting our Hawaii cruises as we absorb
this increase in capacity, and our gross fare revenue per passenger night
("gross fare per diems") in Hawaii for the first half of 2001 has declined by
24% as compared to the comparable period of a year ago, based on cruises
reserved through February 28.

HAWAII EXPANSION PLANS
We believe that there is significant untapped market potential in the cruise
industry and plan to realize some of this potential by expanding our cruise
lines. In the Hawaii cruise market, we plan to leverage our U.S.-flagged
designation and the unique competitive advantages offered to us under the Pilot
Project Statute by introducing larger, more modern vessels into the Hawaii
vacation market under the United States Lines banner. We intend to use this
brand name to help us market our Hawaii business.

On March 9, 1999, we executed definitive agreements with Ingalls Shipbuilding to
construct at least two new vessels for the Hawaii cruise market. Each of the new
vessels is expected to measure approximately 840 feet in length, with 13 decks
and approximately 950 cabins containing at least 1,900 passenger berths. The
contract provides that Ingalls Shipbuilding deliver the first new ship in
January 2003 and the second ship in January 2004. We currently estimate the new
Hawaii cruise ships to cost approximately $495 million each, including the cost
of furnishings, fixtures and equipment, as well as design, engineering and
architectural fees, but excluding capitalized interest. Ingalls Shipbuilding is
claiming that the Company should pay additional sums beyond the contract price
for certain interior finish work and has requested a delay in the delivery
schedule. The Company believes that the claims made by the shipyard for
additional payments and a delay in the delivery of the ships are unwarranted and
the Company intends to assert its rights under the original provisions of the
contract.

Litton Industries, Ingalls Shipbuilding's parent company, has provided
a performance guarantee of the contract. Ingalls Shipbuilding will provide a
limited warranty for the design, material and workmanship of each vessel for one
year after delivery. In addition, the shipbuilding contract provides us an
option to build up to four additional vessels. The estimated contract price of
the first option vessel is $487 million and the contract price for subsequent
option vessels will be negotiated between the parties.



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OTHER

GOVERNMENT REGULATION
Federal maritime law prohibits non-U.S.-flagged vessels from receiving and
discharging passengers at any two U.S. ports without stopping at an intervening
non-U.S. port. Periodically there has been debate about the potential amendment
or repeal of this law and the broader cabotage laws encompassed under the
Passenger Vessel Act and related U.S. laws. In August 1995, we joined the
Maritime Cabotage Task Force, a broad national coalition of several hundred
companies, associations and unions representing all modes of domestic
transportation. The task force is responsible for monitoring potential adverse
changes in legislation that could affect the U.S. maritime industry and
publicizing the economic and national security issues relevant to maintaining a
strong U.S.-flagged vessel industry. Through the coalition's efforts, numerous
legislators and key Congressional staff members have been made aware of the
substantive issues and positions surrounding any changes to this legislation. In
recent years bills have been introduced in Congress to modify the Passenger
Vessel Act, including allowing foreign-flagged ships into a limited number of
itineraries where there was no existing U.S.-flagged ship in service. One of
these bills was approved by the relevant Senate Committee in 2000, but no
further action was taken. The same bill was reintroduced in 2001.

One of the criteria for operating U.S.-flagged vessels in U.S. domestic trade is
that holders of at least 75% of our shares must be U.S. citizens. In order to
preserve the status of our U.S.-flagged vessels, our certificate of
incorporation contains a provision restricting the transfer of shares of our
common stock to non-U.S. citizens. In addition, we have created separate forms
of stock certificates with legends to indicate whether the stockholder is a U.S.
or non-U.S. citizen.

We are subject to various federal and state regulations that affect the
operations of our vessels. Our U.S.-flagged vessels are subject to regulations
promulgated by the U.S. Department of Transportation and enforced by the Coast
Guard. The Coast Guard conducts both scheduled and unannounced inspections to
determine compliance with these regulations and has the authority to delay or
suspend cruises. The Delta Queen vessels must be dry-docked for an inspection of
the hulls' exteriors every five years. The S.S. Independence and ms Patriot must
be dry-docked approximately every 18 months for a similar procedure. The Coast
Guard is empowered to increase the interval between inspections and accordingly,
we have requested and received permission from the Coast Guard to lengthen the
interval between dry-dockings for the S.S. Independence and ms Patriot to 30
months, subject to annual hull surveys.

Like other entities that operate vessels on U.S. waterways, we are also subject
to certain federal, state and local health and safety laws, regulations and
ordinances, including environmental laws. Periodically, we incur expenditures to
keep our vessels in compliance with applicable laws, regulations and ordinances.
Environmental compliance on the part of the cruise industry generally has been
the subject of increasing attention by federal and state legislators as well as
environmental groups, agencies and enforcement personnel. Particular attention
has focused on vessel discharges. New federal or state laws, regulations or
ordinances could be adopted as a result of this activity. We do not anticipate
making any material expenditures in 2001 with respect to environmental matters.
However, the coverage and the cost of complying with any such new (or
modifications to current) environmental ordinances may result in future
additional costs to our operations.

Federal law requires that vessels for 50 or more overnight passengers be
constructed of fire retardant materials. Since 1968 Congress has granted the
Delta Queen eight consecutive exemptions from the Safety at Sea Act requirement
because of fire prevention and safety enhancements made to the vessel and the
Delta Queen's historic status. The statute exempting the Delta Queen requires us
to notify potential passengers that the Delta Queen does not comply with
applicable fire standards and prohibits us from disclaiming liability for loss
due to fire caused by our negligence. The current exemption has been extended to
November 1, 2008. Our ability to operate the Delta Queen is dependent upon
retaining our current Congressional exemption and obtaining additional
exemptions subsequent to 2008. Ocean-going passenger vessels were required to
make enhancements to life safety systems by October 1, 1997 in order to comply
with federal law. The S.S. Independence was brought into compliance during its
spring 1997 dry-dock, and the next improvements are not required until 2005.

The Federal Maritime Commission regulates passenger vessels with 50 or more
passenger berths departing from U.S. ports and requires that operators post
security to be used in the event the operator fails to provide cruise services,
or otherwise satisfy certain financial standards. We have been approved as a
self-insurer by the Federal Maritime Commission, and therefore, subject to
continued approval, are not required to post security for passenger cruise
deposits. The Federal Maritime Commission has reviewed its standards and in June
1996 issued proposed regulations to increase significantly the financial
responsibility requirements. We filed our objection to the proposals, as we
believe that the Federal Maritime Commission's current standards provide
passengers with adequate protection in the event of an operator's
non-performance and that further requirements may impose an undue burden on
operators. The Federal maritime Commission has taken no action on the proposed
rulemaking, and at this time we cannot predict if the proposed changes will be
approved as currently constituted, or at all.


                                       7
<PAGE>   8

The Company currently maintains liquor licenses for its steamboats operating on
the Mississippi River system in Louisiana and for the Columbia Queen in
Portland, Oregon. As a result of actions taken by Tennessee authorities, the
Company has applied for an alcohol beverage license in the State of Tennessee as
well as other neighboring states. The Company does not anticipate any material
expenses or other material adverse developments with respect to these
applications or licenses. However, in the event such developments do occur, the
Company may be required to restrict the sale of alcoholic beverages on all or
portions of its cruises. In connection with these applications or otherwise, the
Company may be required to become qualified to do business in, or to pay or
remit various types of taxes or fees to, certain states or political
subdivisions thereof. In addition, the Company may be subject to fines or other
penalties for failure to comply with laws and regulations of one or more states
requiring licensing, qualification or other action. Neither the cost of
compliance by the Company with such regulations, nor the penalties imposed or
sought to be imposed on the Company for noncompliance have been material in the
past. However, no assurance can be given that such costs or penalties may not
increase or become material in the future.

COMPETITION
The vacation industry is highly fragmented and characterized by a significant
degree of competition among a large number of participants, including cruise
lines, land-based destination resorts, sightseeing tours and a wide range of
other vacation options. Our vessels compete against all of these vacation
options. Since leisure spending is discretionary, adverse economic conditions
affecting our customer base, including uncertainty over inflation and interest
rate fluctuations, may negatively impact our performance.

Within the cruise industry, we believe that cruise destination, cruise product,
and pricing are the primary methods of competition. We also believe that our
status as an operator of U.S.-flagged vessels provides us with a competitive
advantage.

The Company, through its subsidiaries, is the sole U.S.-flagged overnight cruise
ship operator and the largest provider of cruise vacations among the Hawaiian
Islands. The Company competes with operators of foreign-flagged cruise ships
that visit the Hawaiian Islands on voyages of seven days and greater. Under U.S.
law, foreign-flagged ships must include a foreign port in each of their
itineraries. This means that foreign-flagged ships visiting Hawaii, including
ships operating seven day cruises, must spend at least three to four days
sailing on the Pacific Ocean in order to visit a foreign port. Our cruises can
visit and explore the beauty of the various Hawaiian Islands without having to
visit a foreign port.

Delta Queen is the largest provider of overnight cruises in the domestic
waterways and rivers cruise market. There are several other smaller U.S.-flagged
providers of overnight domestic cruises, including two providers who primarily
operate overnight river cruises. We believe that Delta Queen's principal
competitive strengths include its strong brand recognition, the distinctive
nature of its products, its luxurious accommodations, and its high level of
service.

SEASONALITY
Delta Queen's operations are seasonal. Historically, we have had greater
passenger interest and higher yields in the spring and fall months of the year.
The vessels typically undergo their annual lay-ups in December or January. While
American Hawaii has historically experienced greater passenger interest in the
summer and fall months of the year, quarterly variations in its revenues are
much smaller than those of Delta Queen. During the summer months, in particular,
American Hawaii tends to have average occupancies in excess of 100% as the
number of families sharing cabins with children increases significantly during
this period. We expect the seasonal trends for United States Lines to be similar
to those historically experienced by American Hawaii.

INSURANCE
We carry marine liability insurance on our vessels through Steamship Mutual
Underwriting Association (Bermuda) Limited ("Steamship Mutual"), a non-profit,
mutual protection and indemnity association. Our marine liability insurance
arrangements are typical of common marine industry practices and, subject to
certain deductibles, provide coverage for losses, other than hull physical
damage losses, including casualty damage by the vessels and claims by crew
members, passengers and other third parties. The policy has no maximum limit of
liability coverage except for a $500 million limit, per occurrence, for oil
pollution liability claims. As a member of Steamship Mutual, we pay our annual
premiums based largely on our risk characteristics and loss experience, and the
loss experience of other members. In addition, because Steamship Mutual and
other maritime mutual indemnity associations around the world pool a portion of
their loss experience in risk sharing arrangements, Steamship Mutual also may be
affected by the loss experience of other mutual protection and indemnity
organizations. Over and above this pooling arrangement, Steamship Mutual has
additional independent reinsurance protection.

Our annual protection and indemnity insurance premium consists of a mutual
premium, 70% of which is paid in the initial year of the policy period with
installments of 15% being paid in years two and three of the policy period. We
may be liable for a supplemental call in excess of the anticipated amount in the
event that Steamship Mutual incurs heavy losses or experiences unusual
circumstances.


                                       8
<PAGE>   9

We also carry a multi-line marine and non-marine package policy which is
underwritten by various insurers. This package policy provides hull and
machinery coverage, which insures against physical loss and damage to the
vessels, subject to a $500,000 deductible. The vessels are insured for their
appraised value. Although we believe the risk of a total loss of our vessels is
remote, in all likelihood the replacement costs would exceed these coverage
limits. Additionally, this package policy provides coverage against loss of
revenue and extra expenses incurred in connection with a marine casualty or
other covered interruption in service. The deductible for the loss of revenue
coverage is 14 days of revenue for each occurrence, and the deductible for extra
expenses incurred coverage is $125,000 per occurrence.

We believe our insurance coverage is adequate based on our assessment of the
risks to be insured, the probabilities of loss and the relative cost of
available coverages.

EMPLOYEES
We employed 1,857 persons as of December 31, 2000. Of the vessels' onboard
employees, the American Maritime Officers of the AFL-CIO ("American Maritime
Officers") represented approximately 212 individuals, and the Seafarers
International Union of North America, Atlantic, Gulf, Lakes and Inland Waters
District of the AFL-CIO ("Seafarers") represented approximately 841 individuals.
In 2000, the Company entered into ten year agreements with the American Maritime
Officers and Seafarers International Union, relating to the vessels operated by
the Company. The agreement with the American Maritime Officers expires on
February 28, 2009 and the agreement with Seafarers International Union expires
on December 31, 2009. Since 1986, we have not experienced any work stoppages,
and we believe relations with our employees are good.


RISK FACTORS AND FACTORS CONCERNING FORWARD LOOKING STATEMENTS
Certain statements contained in "Risk Factors", "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and elsewhere in this
Annual Report on Form 10-K, in the Company's press releases and in oral
statements and presentations made by or with the approval of an authorized
executive officer of the Company constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements to
be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. These forward-looking
statements are not guarantees of future performance and are subject to certain
risks, uncertainties, assumptions and other factors. Such factors include, among
other things, the following: general economic and business conditions which may
impact levels of disposable income of consumers and demand for the Company's
cruise products; increases in cruise industry capacity; cruise and other
vacation industry competition; changes to the U.S. Flag Cruise Ship Pilot
Project Statute and related U.S. laws; the ability of the Company to implement
its shipbuilding program; unscheduled ship repairs and dry-docking; and the
Company's ability to obtain adequate financing at commercially acceptable levels
to support its expansion plans.

Words such as "expect," "anticipate," "intend," "plan," "believe," "estimate"
and variations of such words and similar expressions are intended to identify
such forward-looking statements. We undertake no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. In light of these risks, uncertainties
and assumptions, the forward-looking events discussed in this document might not
occur. As permitted by the Private Securities Litigation Reform Act of 1995, the
Company is hereby filing the following cautionary statements identifying
important factors which, among others, could cause the Company's actual results
to differ materially from expected and historical results.

Our future financial condition, liquidity and operating results may adversely be
affected by a number of factors, including the following:

CONSTRUCTION DELAYS AND DEVIATIONS FROM SPECIFICATIONS FOR THE NEW HAWAII AND
COASTAL VESSELS MAY ADVERSELY AFFECT EXPANSION PLANS AND FUTURE FINANCIAL
PERFORMANCE

We have entered into contracts to construct at least two new vessels for our
Hawaii cruise business and two new coastal cruisers for the Delta Queen line. A
delay or inability to deliver these new ships may adversely impact our future
financial performance. Ingalls Shipbuilding, the builders of the new Hawaii
cruise ships, has never built a modern passenger ship and, because no U.S.
shipyard has built a passenger ship in more than 40 years, there is a limited
base of experienced subcontractors for portions of the ships. As discussed
previously, Ingalls Shipbuilding is claiming that the Company should pay
additional sums beyond the contract price for certain interior finish work and
has requested a delay in the delivery schedule. Although the Company believes
that the claims made by the shipyard for additional payments and a delay in the
delivery of the ships are unwarranted and the Company intends to assert its
rights under the provisions of its shipbuilding contracts, we cannot assure you



                                       9
<PAGE>   10
that we will be able to successfully complete construction of the Hawaii cruise
ships or the coastal cruisers or that we will be able to complete these projects
within our budgets or expected time frames. Factors that could impact the
construction or renovation of the new vessels include:

     -  construction delays or complications;
     -  cost overruns;
     -  labor stoppages, slowdowns or shortages; and
     -  compliance with U.S. Coast Guard regulations and classification society
        requirements.

A significant delay in delivering the vessels or a material deviation from the
design specifications could have a material adverse effect on our cash flow and
results of operations. Also, events out of the control of the shipyards
constructing the vessels could delay delivery.

IF WE DO NOT OBTAIN SIGNIFICANT AMOUNTS OF CAPITAL TO BUILD, PURCHASE AND
RENOVATE VESSELS, OUR EXPANSION PLANS AND FUTURE OPERATING RESULTS MAY BE
ADVERSELY AFFECTED

Our expansion plans are based in part on the construction of several new vessels
to be put into operation in both the Hawaii market and the U.S. coastal
waterways market. Our expansion plans require us to spend significant amounts of
capital in building, purchasing and renovating vessels. The final cost for these
vessels may exceed our initial estimates and we may be required to seek
additional sources of capital in order to complete the vessels. We cannot assure
you that we will be able to obtain additional financing at commercially
acceptable levels to finance this expansion or to pursue strategic business
opportunities. We expect to be able to use our cash on hand and cash generated
from our future operations to provide a significant portion of these funding
needs. Our failure to obtain sufficient capital or generate sufficient funds
from operations may require us to delay or abandon some of our expansion plans
and could have a material adverse effect on our financial condition and results
of operations.

INCREASED LEVERAGE MAY ADVERSELY AFFECT OUR FINANCIAL PERFORMANCE AND CASH FLOW

We have substantially increased our indebtedness and will continue to do so as
we finance a significant portion of the construction costs under existing and
contemplated agreements to acquire, build, convert or renovate new vessels. This
higher level of indebtedness will require us to devote an increased amount of
our future cash flow from operations to the payment of principal and interest on
indebtedness. At December 31, 2000, we had outstanding consolidated total debt
of $359.2 million. We have and will continue to substantially increase our
leverage with the debt required to finance:

-  construction costs for each of the two Hawaii cruise ships projected to be
   approximately $495 million;
-  construction costs for each of the first two coastal cruisers expected to be
   approximately $40 to $42 million;
-  acquisition and renovation costs for the ms Patriot of approximately $135
   million; and
-  acquisition, renovation, relocation and start-up costs for the Columbia Queen
   of approximately $44 million.

We expect that approximately 87.5% of the total cost for the new Hawaii cruise
ships and coastal vessels will be financed through Maritime Administration
guaranteed private financing. The seller of the ms Patriot, Holland America
Line, a non-U.S. citizen, provided us with financing for $84.5 million of the
purchase price of the ship secured by a preferred mortgage on the vessel. Under
our current expansion plans, and assuming we build, acquire, renovate and
convert all of the ships we currently contemplate, we could increase our
indebtedness to approximately $1.2 billion by 2004. Our increased leverage could
adversely affect our liquidity, financial condition and working capital
available for operations.

IF WE ARE UNABLE TO MAINTAIN ADEQUATE MANAGERIAL RESOURCES DURING OUR EXPANSION,
OUR BUSINESS MAY BE ADVERSELY AFFECTED

If we successfully execute our growth strategy, our expansion will place a
significant strain on our managerial resources. Our future performance will
depend upon management's ability to manage our growth effectively, which
includes our ability to:

     -  expand sales and marketing to fill the passenger berths in our expanded
        fleet at profitable rates;
     -  operate, maintain and support a significantly expanded fleet of vessels;
        and
     -  hire and train additional personnel to staff our expanded fleet and
        support operations.

The process of expanding our fleet of vessels may result in unforeseen operating
difficulties and may require management attention that would otherwise be
available for the ongoing operation of our existing fleet of vessels. Our
failure to



                                       10
<PAGE>   11
manage our growth effectively may cause us to delay or abandon some of our
expansion plans and may have a material adverse effect on our business.

IF WE ARE UNABLE TO MANAGE OUR FINANCIAL RESOURCES DURING OUR EXPANSION, OUR
FINANCIAL PERFORMANCE MAY BE ADVERSELY AFFECTED

Our plans for expansion call for significant capital expenditures that will not
produce corresponding revenues in the near term, which may place a strain on our
capital resources. The process of expanding our fleet of vessels may require
additional financial resources that would otherwise be available for the ongoing
operation of our existing fleet of vessels. Our failure to manage our financial
resources effectively during our expansion could force us to delay or abandon
some of our expansion plans and may have a material adverse effect on our
liquidity, financial condition and results of operations.

IF DEMAND FOR OUR NEW CRUISE PRODUCTS FAILS TO DEVELOP AS EXPECTED OR
COMPETITION INCREASES, OUR BUSINESS MAY BE ADVERSELY AFFECTED

The Hawaii, Pacific Northwest and coastal cruise markets where we intend to
deploy our new vessels currently do not have a large supply of cruise operators.
If demand for our new vessels does not develop, our financial performance may
suffer. Our expected deployment of vessels will increase the supply of available
cruises in these markets significantly. We engaged market research firms to
assist us in making our decision to pursue expansion plans. We cannot assure
you, however, that demand for our new cruise products, services and itineraries
will develop. If the market for these new cruise products fails to develop,
develops more slowly than expected or becomes saturated with competitors, it may
adversely affect our liquidity, financial condition and results of operations.

INCREASED CAPACITY IN HAWAII MAY REDUCE OCCUPANCY ON THE S.S. INDEPENDENCE,
ADVERSELY AFFECTING REVENUES

The introduction of the ms Patriot or our new cruise ships into the Hawaii
cruise market could cause occupancy or revenue levels on the S.S. Independence
to decline. If revenue levels drop so much that the S.S. Independence generates
operating losses, it may reduce our expected benefits from increased capacity in
Hawaii and could have a material adverse effect on our financial condition and
results of operations.

IF WE CANNOT BENEFIT FROM THE EXCLUSIVE RIGHTS OF THE PILOT PROJECT STATUTE, OUR
REVENUE GROWTH IN HAWAII WOULD BE ADVERSELY AFFECTED

We believe the Pilot Project Statute provides us with the exclusive right to
operate large U.S.-flagged cruise ships in the Hawaiian Islands for the life
expectancy of our new ships. We will enjoy the benefits of the Pilot Project
Statute, however, only if we comply with its terms. Our competitive advantage
could be eliminated or diminished if the Pilot Project Statute were to be
repealed or amended, if our interpretation of its terms is not upheld or if we
fail to satisfy its requirements. This could have a material adverse effect on
our financial condition and results of operations. For a more detailed
discussion of the Pilot Project Statute, see "Business - General."

MODIFICATION OF THE PASSENGER VESSEL ACT MAY ADVERSELY AFFECT OUR BUSINESS

From time to time, proposals are made which would limit or eliminate the terms
of the Passenger Vessel Act. If the Passenger Vessel Act is repealed or amended
to allow foreign-flagged ships the same rights to transport passengers between
U.S. ports as U.S.-flagged ships, we could face considerable competition in all
our lines, including competition from entities with greater financial resources.
Under the Passenger Vessel Act and related laws, only U.S.-flagged ships may
transport passengers between U.S. ports. Consequently, only ships that are U.S.
built, owned, operated and documented may operate between U.S. ports, including
the islands of Hawaii. Foreign-flagged ships may transport passengers between
U.S. ports only if their itineraries include a stop at a foreign port. This
increased competition could have a material adverse effect on our financial
condition and results of operations. For a more detailed discussion of the
Passenger Vessel Act, see "Business - General."

INCREASED COMPETITION IN THE HAWAII CRUISE MARKET AND FROM OTHER VACATION
ALTERNATIVES, MAY ADVERSELY IMPACT OUR FINANCIAL PERFORMANCE

We presently compete against a wide range of vacation alternatives, including
other cruises, destination resorts and sightseeing vacations. Cruise lines or
other entities, including those with greater resources, could introduce
overnight U.S.- flagged vessels in direct competition with our Delta Queen
vessels, which may adversely impact our financial performance. We may also face
additional competition in the Hawaii cruise market from foreign-flagged vessels
as the Hawaii cruise market expands. The entry of direct competition could make
it more difficult for us to maintain or further increase occupancy



                                       11
<PAGE>   12
or prices for cruise vacations. This could result in lower margins and adversely
effect our financial condition and results of operations.

AS A MEMBER OF THE VACATION AND LEISURE INDUSTRY, OUR BUSINESS IS SENSITIVE TO
GENERAL ECONOMIC AND BUSINESS CONDITIONS

As a vacation and leisure company providing cruise vacations, we depend on our
customers' leisure spending. Adverse change in the general economic or business
environment could affect our customers by decreasing the amount of money they
spend on leisure activities such as cruising. A decrease in leisure spending
could affect passenger yields and occupancy rates on our ships, which could
adversely affect our financial performance.

IF WE DO NOT COMPLETE DRY-DOCKING ON SCHEDULE OR WITHIN BUDGETS, OR IF ANY OF
OUR VESSELS REQUIRE UNSCHEDULED REPAIRS, OUR REVENUES MAY BE ADVERSELY IMPACTED

Operation of our vessels is subject to regulations established by the U.S.
Department of Transportation that are enforced by the U.S. Coast Guard. Among
these regulations is the requirement that the vessels be taken out of operation
and removed from the water for inspection of the exterior of the hull on a
periodic basis, referred to as dry-docking. When we dry-dock one of our vessels
as required, we lose the revenue from that vessel's operations for the period it
is out of service. We also incur the additional cost of the dry-docking. The
S.S. Independence, ms Patriot and the two new coastal vessels must be dry-docked
every 30 months and the Delta Queen riverboats must be dry-docked every five
years. For its last dry-docking, the S.S. Independence was out of service for 18
days beginning on January 5, 2000. Dry-docks of Delta Queen vessels take place
in the winter months when our revenue yield is lowest. For its last regularly
scheduled dry-docking, the Mississippi Queen was out of service for a period of
approximately 24 days commencing January 3, 2001. For its next scheduled
dry-docking, the Delta Queen is expected to be out of service for a period of 28
days commencing in January 2002. The American Queen, which first entered service
in 1995, was out of service for 10 days for its first dry-docking between
January 10, 2000 and January 20, 2000. Its next dry-docking will occur in
approximately four years. In years that we are not required to dry-dock our
Delta Queen vessels, we remove each of these vessels from service to perform
routine repairs and maintenance and capital projects. We refer to the period
that each vessel is removed from service as a lay-up. The Delta Queen was out of
service beginning on January 4, 2001 for 42 days, and the American Queen was out
of service for a period of 18 days beginning February 5, 2001. The S.S.
Independence, ms Patriot and the two new coastal vessels do not undergo lay-ups
in years that they are not dry-docked. We cannot assure you that future
dry-docks or lay-ups for any of our vessels will be completed on schedule or
within their budgets.

The S.S. Independence will undergo an unscheduled dry-dock beginning March 24,
2001 to repair its bow thruster. The vessel is expected to be out of service for
a period of seven days, and the expected cost of the repairs is expected to be
between $400,000 and $500,000. On February 20, 2001, the ms Patriot was required
to cancel a cruise that was in progress and return to its home port so that a
thrust bearing in the vessel's generator drive train could be replaced. This
resulted in refunds issued to passengers of approximately $1.6 million, and
travel credits for a future cruise expected to cost approximately $0.5 million.
Additional unscheduled repairs could have an adverse impact on the Company's
results of operations and financial condition.

RIVER AND OCEAN CONDITIONS AND WEATHER FACTORS CAN ADVERSELY AFFECT OPERATIONS
AND OUR FINANCIAL PERFORMANCE

River or ocean conditions and weather factors can adversely affect our operation
and the financial performance of the Delta Queen and American Hawaii lines by
disrupting schedules or reducing operating days. As a result of flooding and
restrictions placed upon commercial travel along the inland rivers, we have, in
the past, canceled or re-routed scheduled cruises. We operate the Hawaii cruise
ships in and around the Hawaiian Islands. As a result, its schedules are subject
to ocean and weather conditions, including hurricane conditions. Weather
conditions could cause us to reschedule or cancel cruises, which could adversely
affect our results of operations.

THE LOSS OF VESSELS FROM SERVICE WOULD ADVERSELY IMPACT OUR BUSINESS

The loss of any vessel from service due to weather, casualty, mechanical
failure, extended or extraordinary maintenance, or otherwise, could adversely
affect our operating results. We believe we have a commercially reasonable level
of insurance coverage. In the event of a permanent or temporary loss of one or
more of the vessels, however, our insurance would not provide the replacement
costs of the vessels nor fully cover the impact of lost business.



                                       12
<PAGE>   13
THE SEC HAS BEEN CONDUCTING AN INFORMAL INQUIRY OF OUR ACCOUNTING PRACTICES
RELATING TO DIRECT RESPONSE ADVERTISING COSTS

The SEC has been conducting an informal inquiry into our accounting practices
with respect to direct response advertising costs. The informal inquiry relates
to our adoption of a particular methodology effective as of January 1, 1999 and
our subsequent rescission of that methodology in November, 1999 due to
difficulties encountered implementing the new method. We restated our financial
statements for the first and second quarters of 1999 and we believe that we are
cooperating with the SEC in their informal inquiry. We are unable to predict the
outcome or impact of the SEC's informal investigation. However, it is possible
that the SEC's informal inquiry or a subsequent formal inquiry could result in
orders, penalties or sanctions against the Company. Depending upon the resulting
orders, penalties or sanctions, if any, our financial performance could be
adversely affected, our ability to conduct our business could be impaired or we
could be required to make further adjustments to our financial statements. For a
more detailed description of the accounting rescission, see Note 13 to the
Consolidated Financial Statements.

ANTI-TAKEOVER AND TRANSFERABILITY LIMITATIONS OF U.S. OWNERSHIP REQUIREMENTS MAY
ADVERSELY AFFECT THE LIQUIDITY OF OUR COMMON STOCK

One of the requirements for having U.S.-flagged vessels operating in U.S.
domestic trade is that 75% of our stockholders must be U.S. citizens and that
non-U.S. citizens cannot exercise control of us. We have restrictions in our
certificate of incorporation limiting the transferability of our common stock or
control to non-U.S. citizens to preserve our U.S.-flagged status. These
limitations may have the effect of decreasing the liquidity of our common stock,
thereby making it more difficult for investors to dispose of their shares in an
orderly manner. We have also added legends to our stock certificates to indicate
the citizenship of our stockholders. These provisions and the level of ownership
by Equity Group Investments, Inc. and its affiliates, which we refer to as the
"Equity Group," may deter a change in control and limit non-U.S. citizens',
including corporations and individuals, purchases of our common stock.

OUR CONTROLLING STOCKHOLDER MAY TAKE ACTIONS THAT ADVERSELY AFFECT OUR BUSINESS

Affiliates of the Equity Group own an aggregate of approximately 35% of the
outstanding shares of our common stock. The Equity Group's level of ownership
may permit it to elect the members of our board of directors who will control
our future direction and operations. This includes decisions regarding the
issuance of securities, dividends, acquisitions and our sale. The Equity Group's
stockholders are, directly or indirectly, trusts created for the benefit of
Samuel Zell, Ann Lurie and their respective families. Mr. Zell is the Chairman
of our board of directors.

SALES OF OUR CONTROLLING STOCKHOLDER'S SHARES COULD HAVE AN ADVERSE EFFECT ON
OUR COMMON STOCK PRICE OR OUR ABILITY TO RAISE CAPITAL

The sale of a substantial number of shares of our common stock by the Equity
Group, or the perception that such a sale could occur, could negatively affect
the market price of our common stock. As of December 31, 2000, the Equity Group
had pledged 4,603,000 of its 7,402,247 shares of our common stock to secure
several loans. If the Equity Group were to default on these loans, the creditors
could acquire the pledged shares. We have been advised by the Equity Group that
it is presently in compliance in all material respects with all covenants and
terms of these loans and has alternative resources with which to service the
loans. Any sale, or the perception that such a sale may occur, could also
materially impair our future ability to raise capital through an offering of
securities.

OUR CONTROLLING STOCKHOLDER MAY HAVE CONFLICTS OF INTEREST WITH COMPETING
INTERESTS

The Equity Group, our controlling stockholder, is an investor directly or
indirectly in various business enterprises, both publicly and privately held.
Mr. Zell is also an officer and/or director in many of these affiliated
businesses. The Equity Group, Mr. Zell and/or these affiliated businesses may
from time to time receive opportunities in various businesses that might compete
with us in our current or future activities. Conflicts of interest may result
from such opportunities. The Equity Group and Mr. Zell have informed us that
neither it, he nor any of these affiliated businesses presently intends to make
investments which would cause a conflict of interest with us.

ITEM 2.       PROPERTIES

We currently operate vessels with a total of 3,255 passenger berths. The
following table represents a list of our current vessels, the year they entered
into service, their estimated passenger capacity based upon double occupancy per
cabin, and their areas of operation:



                                       13
<PAGE>   14
<TABLE>
<CAPTION>
                                         YEAR VESSEL            PASSENGER               PRIMARY AREAS
VESSEL                              ENTERED INTO SERVICE         CAPACITY                OF OPERATION
------                              --------------------         --------                ------------
<S>                                        <C>                    <C>               <C>
ms Patriot(1) .................            1982                   1,212             HAWAII
S.S. Independence(2) ..........            1951                     860             HAWAII
American Queen ................            1995                     436             Mississippi River SYSTEM
Mississippi Queen .............            1976                     416             Mississippi River System
Delta Queen ...................            1926                     174             Mississippi River System
Columbia Queen ................            2000                     157             Columbia River System
</TABLE>

       (1) Acquired by the Company and substantially renovated in 2000.
       (2) Acquired by the Company in 1993 and substantially renovated in 1994.

The following table represents a list of the new vessels we currently plan to
build together with their estimated dates for entering service, and based upon
double occupancy per cabin, their estimated passenger capacity:

<TABLE>
<CAPTION>
                                                      ESTIMATED                    ESTIMATED
                                              DATE ENTERING INTO SERVICE       PASSENGER CAPACITY
                                              --------------------------       ------------------
<S>                                           <C>                                     <C>
United States Lines Vessels:
   Newbuild #1............................         January 2003                       1,900
   Newbuild #2............................         January 2004                       1,900
Delta Queen Vessels:
   cv Cape May Light......................         May 2001                             224
   cv Cape Cod Light......................         Fourth Quarter 2001                  224
</TABLE>

See Note 8 to the Consolidated Financial Statements for a discussion of leased
properties.

ITEM 3.  LEGAL PROCEEDINGS

There are no material legal proceedings to which we are a party or of which any
of our property is the subject, other than ordinary routine litigation and
claims incidental to the business. We believe we maintain adequate insurance
coverage and reserves for such claims.

The SEC has been conducting an informal inquiry into our accounting practices
with respect to direct response advertising costs. The informal inquiry relates
to our adoption of a particular methodology effective as of January 1, 1999 and
our subsequent rescission of that methodology in November 1999 due to
difficulties encountered implementing the new method. We restated our financial
statements for the first and second quarters of 1999 and we believe that we are
cooperating with the SEC in their informal inquiry. We are unable to predict the
outcome or impact of the SEC's informal investigation. However, it is possible
that the SEC's informal inquiry or a subsequent formal inquiry could result in
orders, penalties or sanctions against the Company. Depending upon the resulting
orders, penalties or sanctions, if any, our financial performance could be
adversely affected, our ability to conduct our business could be impaired or we
could be required to make further adjustments to our financial statements. For a
more detailed discussion of the accounting rescission, see Note 13 to the
Consolidated Financial Statements.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.




                                       14
<PAGE>   15
                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a)   Our common stock trades on the NASDAQ National Market tier of The NASDAQ
      Stock Market under the symbol: "AMCV". On February 28, 2001, the last
      reported sale price for our common stock was $16.25 per share. The
      following table indicates the high and low sales price information for
      shares of our common stock as reported by The NASDAQ Stock Market:

<TABLE>
<CAPTION>
                                                                                   High          Low
              -------------------------------------------------------------------------------------------
                     <S>                  <C>                                    <C>           <C>
                     QUARTER  ENDED:      December 31, 2000................      $  16.75      $  11.00
                                          September 30, 2000...............         21.56         14.62
                                          June 30, 2000....................         24.10         18.75
                                          March 31, 2000...................         34.87         23.37

                     QUARTER ENDED:       December 31, 1999................      $  35.25      $  21.13
                                          September 30, 1999...............         24.94         19.81
                                          June 30, 1999....................         24.00         15.63
                                          March 31, 1999...................         26.06         16.25
</TABLE>


(b)   The number of stockholders of record of common stock on February 28, 2001
      was approximately 662.

(c)   We did not pay cash dividends on our common stock during 1999 or 2000. We
      currently anticipate that all of our earnings will be retained for planned
      construction projects and ongoing business requirements. We do not
      anticipate paying any cash dividends in the foreseeable future.





                                       15
<PAGE>   16

ITEM 6.  SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                                   Years Ended December 31,
                                                             2000            1999           1998            1997           1996
                                                          -------------------------------------------------------------------------
<S>                                                       <C>             <C>             <C>             <C>            <C>
INCOME STATEMENT DATA
(In thousands)
   Revenues .........................................     $ 221,625       $ 208,717       $ 192,225       $ 177,884      $ 190,408
   Gross profit .....................................        78,008          74,854          66,630          66,589         67,863
   One-time charges(1) ..............................            --              --              --              --         38,390
   Operating income (loss) ..........................       (13,106)          1,649           5,486           9,984        (30,465)
   Other (income) expense (2) .......................            18             (10)           (300)             --        (11,729)
   Net income (loss) ................................     $ (10,072)      $  (1,750)      $     157       $   2,429      $ (17,636)

PER SHARE INFORMATION
   Basic earnings (loss) per share ..................     $   (0.49)      $   (0.10)      $    0.01       $    0.17      $   (1.28)
   Diluted earnings (loss) per share ................     $   (0.49)      $   (0.10)      $    0.01       $    0.17      $   (1.28)
   Cash dividends per share .........................     $      --       $      --       $      --       $      --      $      --
OPERATING STATISTICS
   Fare revenue per passenger night (3) .............     $     232       $     225       $     218       $     228      $     216
   Total revenue per passenger night (3) ............     $     324       $     316       $     306       $     302      $     287
   Weighted average operating days(4):
        Delta Queen .................................           318             342             341             337            347
        American Hawaii .............................           348             365             365             337            366
        United States Lines .........................            23              --              --              --             --
   Vessel capacity per day (berths)(5):
        Delta Queen .................................         1,183           1,026           1,026           1,026          1,024
        American Hawaii .............................           860             867             867             844            817
        United States Lines .........................         1,212              --              --              --             --
   Passenger nights(3,6) ............................       684,888         659,507         627,321         588,892        643,891
   Physical occupancy percentage(3,7) ...............            97%             99%             94%             94%            98%

BALANCE SHEET DATA (at period end)
(In thousands)
   Total assets .....................................     $ 752,615       $ 293,990       $ 212,685       $ 210,805      $ 211,864
   Notes Payable ....................................       125,000              --              --              --             --
   Current portion of long-term debt ................        15,768           4,100           4,100           4,100          4,100
   Long-term debt ...................................       218,420          80,463          77,388          81,488         85,898
   Total stockholders' equity .......................       173,503         129,800          61,907          59,129         54,982
</TABLE>

-----------------------

(1) In 1996, we decided not to renovate and return the S.S. Constitution to
    service, resulting in write-down costs of $38.4 million ($1.89 per share -
    net of tax on both a basic and diluted basis).

(2) In 1996, we sold the Maison Dupuy Hotel located in New Orleans, Louisiana
    for a gain of $11.7 million ($0.57 per share - net of tax on both a basic
    and diluted basis). In 1998, we received $0.3 million ($0.01 per share -
    net of tax on both a basic and diluted basis) of final proceeds under a
    profit participation agreement associated with the 1996 sale.

(3) 1999 and 1998 figures have been recalculated to conform to the 2000
    presentation, which includes passengers sailing on complimentary tickets.

(4) Weighted-average operating days for each cruise line is determined by
    dividing capacity passenger nights for each cruise line by the cruise
    line's total vessel capacity per day. Capacity passenger nights is
    determined by multiplying the actual operating days of the vessel by each
    vessel's capacity per day.

(5) Vessel capacity per day represents the number of passengers each cruise
    line can carry assuming double occupancy for cabins which accommodate two
    or more passengers. Some cabins on the Independence, Patriot and the
    American Queen can accommodate three or four passengers.

(6) A passenger night represents one passenger spending one night on a vessel;
    for example, one passenger taking a three-night cruise would generate three
    passenger nights.

(7) Physical occupancy percentage is passenger nights divided by capacity
    passenger nights.



                                       16
<PAGE>   17
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

OVERVIEW
American Classic Voyages Co. is a holding company which owns and controls The
Delta Queen Steamboat Co., Great Hawaiian Cruise Line, Inc. and Project America,
Inc. Through our various subsidiaries, we currently operate four cruise lines:
Delta Queen Steamboat Co., which owns and operates the American Queen,
Mississippi Queen and Delta Queen steamboats and the Columbia Queen riverboat;
Delta Queen Coastal Voyages, which owns and will operate the cv Cape May Light
and cv Cape Cod Light; American Hawaii, which owns and operates the S.S.
Independence steamship; and United States Lines, which owns and operates the ms
Patriot.

Our revenues are comprised of:
     1.  cruise fares;
     2.  onboard revenues, such as those from gift shops and shore excursions;
     3.  trip cancellation insurance and pre- and post-cruise hotel packages;
         and
     4.  the sale of airplane tickets to and from points of embarkation and
         disembarkation.

Our cost of operations is comprised of:
     1.  passenger expenses, such as employee payroll and benefits and the cost
         of food and beverages;
     2.  vessel operating costs including lay-up and dry-docking costs for our
         vessels;
     3.  insurance costs;
     4.  commissions paid to travel agents; and
     5.  airplane tickets and hotel costs.

When we receive deposits from passengers for cruises, we establish a liability
for unearned passenger revenue. We recognize these deposits as revenue on a
pro-rata basis during the associated cruise. Our revenues and some of our
expenses vary considerably when measured on a quarterly basis. This is due to
the seasonality of our Delta Queen revenues, the timing of our Delta Queen and
American Hawaii lay-ups and dry-dockings, and fluctuations in airfares. These
variations are reflected in our fare revenues per passenger night, which are
commonly referred to as fare per diems, and our occupancy rates.

Operations data expressed as a percentage of total revenue for years indicated
is as follows:

                                                   2000        1999       1998
                                                  -------     -------    -------
    Revenues..................................      100%        100%       100%
    Costs and expenses:
      Operating expenses......................       65          64         65
      Selling, general and administrative.....       34          27         23
      Depreciation............................        7           8          9
    Operating income .........................       (6)          1          3
    Net income (loss).........................       (5)         (1)         0



                                       17
<PAGE>   18
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONT'D.)

SEASONALITY
Delta Queen's operations are seasonal. Historically, we have had greater
passenger interest and higher yields in the spring and fall months of the year.
The vessels typically undergo their annual lay-ups in December or January. While
American Hawaii has historically experienced greater passenger interest in the
summer and fall months of the year, quarterly variations in its revenues are
significantly less than those of Delta Queen. During the summer months, in
particular, American Hawaii tends to have average occupancies in excess of 100%
as the number of families sharing cabins with children increases significantly
during this period. We expect the seasonal trends for United States Lines to
eventually be similar to those historically experienced by American Hawaii.

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION
For the year ended December 31, 2000, cash provided by operations, before
changes in unearned passenger revenue, was $9.7 million compared to $24.8
million in 1999 and $12.9 million in 1998. The decrease in 2000 is due primarily
to lower earnings and increases in accounts receivable, inventory, prepaid
expenses and deferred tax assets, partially offset by an increase in accounts
payable. The increase in 1999 as compared to 1998 is due primarily to increases
in accrued expenses and accounts payable. The increase in unearned passenger
revenues was $5.9 million greater in 2000 than in 1999 as deposits pertaining to
the ms Patriot, introduced in December 2000, more than offset decreases in
unearned passenger revenues at American Hawaii and Delta Queen. The decrease in
unearned passenger revenues at American Hawaii was mainly due to lower advance
bookings for cruises taking place in the first quarter of 2001, and the decrease
at Delta Queen was due to the dry-docking of the Mississippi Queen and the
42-day lay-up of the Delta Queen in January and February of 2001.

Cash used in investing activities totaled $426.6 million in 2000 as compared to
$80.1 million in 1999 and $8.2 million in 1998. The increase is due primarily to
capital expenditures of $356.1 million in 2000, as compared to $79.9 million in
1999 and $8.8 million in 1998. In addition to the $134.9 million cost for the
purchase and renovation of the ms Patriot, acquired in October 2000, the Company
spent $135.0 million in 2000 for the new Hawaii cruise ships under construction
as compared to $53.5 million during 1999, $32.8 million in 2000 for the Columbia
Queen as compared to $11.3 million in 1999, and $46.4 million on the Delta Queen
coastal vessels in 2000 as compared to $7.4 million spent in 1999. Other capital
expenditures of $7.0 million were mainly related to our existing vessels as the
S.S. Independence and the American Queen were dry-docked in January 2000 and the
Delta Queen and Mississippi Queen underwent lay-ups during that period. The
increases in restricted investments and marketable securities in 2000 in the
amount of $70.5 million was mainly a result of proceeds from Maritime
Administration ("MARAD") guaranteed debt issuances that were held in escrow.

Cash received from financing activities was $418.6 million in 2000 as compared
to $68.6 in 1999, and cash used in financing activities of $2.5 million 1998.
The increase in 2000 is due primarily to the issuance of $125 million of
short-term notes to finance construction of the new Hawaiian vessels, an $84.5
million note issued to Holland America Line for the purchase of the ms Patriot,
$70.7 million of bonds, net of financing costs, issued to finance the two new
Delta Queen Coastal vessels, $143.1 million of convertible preferred securities
of a subsidiary trust and common stock (see below) issued in February 2000, as
compared to $63.5 million of common stock issued in the prior year, and net
repayments on the Company's credit facility of $7.2 million, as compared to $7.2
million of net borrowings in 1999. The Company also made scheduled principal
payments of $4.1 million under the American Queen and S.S. Independence ship
financing notes in both 2000 and 1999.

On February 22, 2000 the Company completed an offering of 2,000,000 trust
convertible preferred securities. Each $50 security bears interest at 7% and is
convertible at the holder's election into 1.6207 shares of common stock. The net
proceeds, after underwriting fees and other expenses, were $96.3 million. A
portion of the proceeds were used to fund the letter of credit facility related
to the ms Nieuw Amsterdam purchase and to pay outstanding amounts on the Chase
credit facility. The underwriters' overallotment option of 300,000 additional
preferred securities was not exercised.



                                       18
<PAGE>   19
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONT'D.)

On February 22, 2000 the Company also completed an offering of an additional
2,000,000 shares of common stock. The net proceeds, after underwriting
commissions and other expenses, were $46.8 million and are being used for
construction of the second Hawaii vessel. The underwriters' overallotment option
of 300,000 additional shares was not exercised.

For the Hawaii cruise market, we are constructing two new cruise ships over the
next several years. On March 9, 1999 we signed a definitive agreement with
Ingalls Shipbuilding to construct two passenger ships, each containing
approximately 1,900 passenger berths, with options to build up to four
additional vessels. The contract provides that Ingalls Shipbuilding deliver the
first new ship in January 2003 and the second ship in January 2004. We currently
estimate the new Hawaii cruise ships to cost approximately $495 million each,
including the cost of furnishings, fixtures and equipment, as well as design,
engineering and architectural fees, but excluding capitalized interest. Ingalls
Shipbuilding is claiming that the Company should pay additional sums beyond the
contract price for certain interior finish work and has requested a delay in the
delivery schedule. The Company believes that the claims made by the shipyard for
additional payments and a delay in the delivery of the ships are unwarranted,
and the Company intends to assert its rights under the original provisions of
the contract. During 2000 the Company spent $110.3 million on construction of
the first Hawaii vessel and $24.7 million on construction of the second vessel.
Over the next twelve months, we expect to spend approximately $301 million on
building the two new Hawaii cruise vessels and completing construction of the cv
Cape May Light and cv Cape Cod Light, excluding capitalized interest.

We will finance a significant portion of the construction cost of the Hawaii
cruise ships through the Maritime Administration, which provides guarantees of
private financing for new vessel construction projects conducted in U.S.
shipyards. In April 1999 we received commitments from the Maritime
Administration for financing guarantees for debt of up to 87.5% of the cost of
the vessels. The guaranteed debt will be accessed during the construction
period. Interest payments during that period are capitalized as part of the cost
of construction as required by generally accepted accounting principles. During
the 12 months ending December 31, 2000 the Company placed three separate
issuances of short-term notes guaranteed by the Maritime Administration totaling
$125 million. These notes bear interest ranging from the London Interbank Offer
Rate, or LIBOR, minus 0.05% to LIBOR minus 0.10%. On January 31, 2001 the
Company issued an additional $50 million of notes guaranteed by MARAD bearing
interest at LIBOR minus 0.10% and due on January 31, 2002. A portion of the
proceeds from this issuance was used to pay down $25 million of notes issued in
2000 that were due January 31, 2001.

The Company intends to refinance all of these notes on or before their maturity
dates by issuing long-term bonds. In the current market, this type of debt
generally bears interest at a rate of 100 to 175 basis points over the
comparable U.S. government obligations and can have a term of up to 25 years
from the date of delivery of the vessel. The loans generally amortize on either
a straight-line basis or on a mortgage-style basis over the term of the loan,
commencing after the delivery date. Fees associated with obtaining the financing
guarantees included a one-time investigation fee of approximately $1.4 million,
which we paid to the Maritime Administration in April 1999. In addition, the
Maritime Administration imposes an annual guarantee fee of not less than 1/4 of
1% and not more than 1% of the indebtedness, reduced by any required escrow,
based upon the obligor's ratio of long-term debt to stockholders' equity. The
present value of the sum of the annual guarantee fees is payable at the closing
of the long term Maritime Administration guaranteed financing and will be
capitalized as part of the vessel cost.

We are constructing two new coastal cruise vessels for our Delta Queen Coastal
Voyages line at Atlantic Marine, Inc. of Jacksonville, Florida. We expect each
vessel to have a total project cost, including furnishing, fixtures and
equipment, of approximately $40 million to $42 million. The coastal cruise
vessels will be approximately 300 feet long and provide accommodations for up to
224 passengers. The first vessel, the cv Cape May Light, is scheduled to be
delivered in April 2001. The second vessel, the cv Cape Cod Light, is expected
to be delivered in the third quarter of 2001. Atlantic Marine will provide a
limited warranty for the work, parts, and components of each vessel fabricated
by the yard for one year after delivery. During 2000, the Company incurred $23.5
million and $22.9 million for construction costs pertaining to the Cape May
Light and Cape Cod Light respectively, including capitalized interest. On
October 16, 2000 the Company issued $37.9 million and $38.5 million of 7.25%
long-term bonds to finance construction of the cv Cape May Light and cv Cape Cod
Light respectively. Semi-annual principal payments commence six months after
delivery of the ships. The bonds are guaranteed by MARAD pursuant to a
commitment received by the Company from MARAD on March 31, 2000 for financing
guarantees pertaining to the two ships.


                                       19
<PAGE>   20
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONT'D.)

Under the terms of an agreement finalized on October 15, 1999, the Company
acquired on October 18, 2000 the ms Nieuw Amsterdam from Holland America Line
("HAL") for $114.5 million. Upon taking delivery of the vessel, the Company
renamed it the ms Patriot and is operating it as a 1,212-passenger U.S.-flagged
vessel serving the Hawaiian market. This is the first ship that the Company
intends to operate under the United States Lines brand name. The purchase price
was financed with $30 million of proceeds from the issuance of Trust Preferred
Securities (see Note 7 to the Consolidated Financial Statements) and an $84.5
million promissory note issued to HAL by the Company. The promissory note bears
interest at a floating rate equal to the prevailing prime rate, which was 9.5%
at the time of purchase, and is payable monthly in arrears. Principal paydowns
of $5.1 million are scheduled for each March 31st and September 30th, beginning
with March 31, 2001, with a final payment of $23.7 million due on January 18,
2007. The Company also incurred $20.4 million in refurbishment, renovation, and
other capital expenditures necessary to ready the vessel for service. This
amount was funded from operating cash flow. The vessel was placed into service
on December 9, 2000.

The 1999 purchase contract with HAL required the Company to make an earnest
money deposit of $30 million by January 17, 2000. Persons and entities
affiliated with Equity Group Investments, Inc. ("Equity"), the Company's largest
stockholder, guaranteed the letter of credit facility for the Company with The
Chase Manhattan Bank ("Chase") for up to $30 million, thereby allowing the
Company to obtain the facility from its inception until February 22, 2000. Under
an agreement dated October 15, 1999, as consideration for issuance of the
guarantee, the Company paid Equity a commitment fee of $0.5 million in 1999 and
agreed to pay Equity additional compensation in the form of stock appreciation
units. Equity's rights to receive this additional compensation vested, on a
monthly basis, during the period that the guarantee remained outstanding. On
February 22, 2000, the Company deposited $30 million into a cash collateral
account with Chase from proceeds received from the issuance of Trust Preferred
Securities, thereby terminating the Equity guarantee. Equity may exercise its
right to receive payment during the two years following the third anniversary of
the date of the agreement, subject to the Company's rights to retire Equity's
stock appreciation units, at escalating prices, prior to the third anniversary
of the agreement. (See Note 8 to the Consolidated Financial Statements for
further information).

In May 1999 we acquired a substantially complete riverboat originally built for
the casino trade that we converted into the fourth Delta Queen riverboat. The
vessel, known as the Columbia Queen, entered service on May 27, 2000 and
operates weekly cruise vacations out of Portland, Oregon on the Columbia River
system. The Company paid $3.2 million to acquire the vessel and incurred $32.8
million and $8.1 million of costs in 2000 and 1999 respectively, including
capitalized interest, to convert the 218-foot boat into an overnight passenger
vessel with 157 passenger berths. The conversion was financed primarily through
borrowings on the Company's revolving credit facility.

In February 1999, The Delta Queen Steamboat Co. ("DQSC") entered into a credit
agreement with a group of lenders, with The Chase Manhattan Bank as agent. This
agreement provided for a revolving credit facility of up to $70 million to fund
the expansion of the Delta Queen line. Upon the completion of MARAD financing
for the two Delta Queen coastal vessels, this facility was amended in the third
quarter of 2000 whereby DQSC has a maximum of $30 million available to it in the
amount of revolving credit loans until the maturity date of the facility, which
is September 13, 2001. Any amounts outstanding on the maturity date will be
converted to a non-amortizing term loan which matures on September 13, 2002.
Borrowings under the facility bear interest at either (1) the greater of Chase
Manhattan's prime rate or alternative base rates plus a margin ranging from
0.50% to 0.75%, or (2) LIBOR plus a margin ranging from 1.50% to 1.75%. The
Company is also required to pay an unused commitment fee of 0.50% per annum. The
facility is secured by all of the assets of DQSC, except for the American Queen,
Cape May Light and Cape Cod Light. The terms of the facility require DQSC to
maintain certain financial performance ratios and contain limitations on
investments, additional indebtedness, construction costs of new vessels and
other capital expenditures.

In the first quarter of 2000 the then three existing Delta Queen vessels'
lay-ups were completed at a cost of approximately $6.7 million, including
capital expenditures, repairs and maintenance. These amounts were funded from
working capital and the Delta Queen credit facility. For its most recent
dry-docking, the S.S. Independence was out of service for 18 days beginning
January 5, 2000. This dry-docking cost approximately $5.9 million, including
capital expenditures, repairs and maintenance and was funded from cash on hand.
In the first quarter of 2001 the regularly scheduled dry-docking of the
Mississippi Queen and lay-ups of the other Delta Queen riverboats were completed
at a cost of approximately $7.8 million, including capital expenditures, repairs
and maintenance and was funded from cash on hand.

As of December 31, 2000, we complied with all covenants under our various debt
agreements.



                                       20
<PAGE>   21
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONT'D.)

Principal payments on long term debt due in 2001 amount to $15.8 million.
Capital expenditures in 2001, including payments for vessels under construction,
are expected to be approximately $308.5 million. We believe we will have
adequate access to capital resources, both internally and externally, to meet
our current short-term and long-term capital commitments and working capital
needs. Such resources may include cash on hand, new borrowings from lenders, and
the ability to secure additional financing through the capital markets. We
continually evaluate opportunities to increase capacity at both Delta Queen and
in Hawaii and to strategically grow our business. Although we believe that we
have obtained sufficient equity and debt financing commitments from the capital
markets, together with cash generated from operations, to satisfy our financial
obligations relating to construction of the new vessels, there can be no
assurance that the Company will be able to obtain additional financing, if
necessary, at commercially acceptable levels to finance these projects and, if
we so choose, to pursue strategic business opportunities. If we fail to obtain
such financing, we may have to postpone or abandon some of our plans to increase
capacity or pursue strategic growth opportunities.

Capacity in the Hawaii cruise market has more than doubled in 2001 due to the
introduction of the ms Patriot and additional visits by foreign flagged ships.
We have been discounting our Hawaii cruises as we absorb this increase in
capacity. As a result, gross fare per diems in Hawaii for the first half of 2001
have declined by 24% as compared to the comparable period of a year ago.

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999
Total revenues were $221.6 million in 2000 compared to $208.7 million in 1999.
Total revenue for 2000 represents a $10.3 million increase in fare revenues year
over year and a $2.6 million increase in other revenues, primarily passenger air
and onboard revenues. Fare per diems increased 3% year over year, while
occupancy levels decreased from 99% in 1999 to 97% in 2000.

American Hawaii's fare revenues decreased by $1.2 million as a 5% increase in
fare per diems was more than offset by a 9% decrease in passenger nights, due to
the SS Independence being out of service for 18 days in January 2000. Delta
Queen's fare revenues increased $6.8 million in 2000, primarily due to an
increase in capacity from the late May Columbia Queen introduction, partially
offset by a 1% decline in passenger nights at the other three riverboats. Fare
per diems and occupancy levels for Delta Queen were flat in 2000 as compared to
1999. On December 9, 2000 the ms Patriot was introduced into service and
contributed fare revenue of $4.7 million in 2000.

Consolidated cost of operations increased by $9.8 million, to $143.6 million in
2000 from $133.9 million in 1999. The increase is mainly due to the introduction
of the ms Patriot in December 2000 and, to a lesser extent, the introduction of
the Columbia Queen in May 2000. Operating costs were also negatively impacted by
higher fuel costs, which increased by $2.3 million, or 49%, for vessels that
were in service in 1999 and 2000.

Selling, general and administrative expenses ("SG&A") increased by $17.9
million, from $56.8 million in 1999 to $74.7 million in 2000. The increase is
due primarily to $11.1 million in marketing expenses associated with vessels
that were not yet in service during the year, as compared to $1.3 million of
comparable expenses in 1999. The Company also incurred $5.1 million in start-up
expenses, of which $4.3 million was related to the ms Patriot, $0.6 million was
related to the Columbia Queen and $0.2 million was related to the new Delta
Queen Coastal vessels. No start-up expenses were incurred in 1999. Excluding
these start-up and marketing expenses, SG&A increased by $3.1 million. As a
percent of total revenues, excluding start-up costs and marketing expenses for
vessels not in service, SG&A decreased from 26.6% in 1999 to 26.4% in 2000.

The operating loss in 2000 was $13.1 million compared to an operating profit of
$1.6 million in 1999. The change is mainly due to the increase in marketing
expenses and start-up costs previously discussed, as well as the increase in
fuel costs which negatively impacted gross margin.

Interest income increased by $3.9 million to $7.0 million in 2000, primarily due
to income generated from debt proceeds held in escrow prior to being released
for payments to shipyards.

Interest expense decreased from $7.5 million in 1999 to $3.6 million in 2000 as
$11.7 million of interest that was capitalized in 2000, as compared to $2.3
million in 1999, was partially offset by interest from higher debt levels in
2000.

Income tax benefit increased from $1.0 million in 1999 to $3.6 million in 2000,
due to higher pre-tax losses.


                                       21
<PAGE>   22
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONT'D.)

On February 22, 2000 the Company completed an offering of $100 million of
convertible 7% preferred securities of a subsidiary trust (see Note 7 to the
Consolidated Financial Statements), resulting in accrued distributions and
amortization of related financing costs of $6.2 million.

YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998
Consolidated revenues for 1999 increased $16.5 million to $208.7 million from
$192.2 million for 1998. This represented an $11.3 million increase in fare
revenues combined with a $5.2 million increase in other revenues. American
Hawaii's fare revenues increased $3.8 million. Occupancy rates increased 6% to
106% while fare per diems of $183 were consistent with the prior year. Delta
Queen's fare revenues increased $7.5 million. Occupancy rates increased 4
percentage points from 89% to 93% and fare per diems increased 5% to $268. As a
result, consolidated fare per diems for 1999 increased 3% to $225. Of the $5.2
million increase in other revenues, $3.4 million was attributable to increases
in passenger air and hotel revenue corresponding to the occupancy increase at
both cruise lines. Air revenue per passenger night also increased due to higher
air fares. As discussed below, the increase in air revenue was offset by a
corresponding increase in related air expenses. American Hawaii's onboard
revenue also increased by $1.8 million reflecting an 8% improvement in onboard
revenue per passenger night combined with the 6% occupancy increase. As a
result, consolidated total revenue per passenger night increased 3% to $316.

Consolidated cost of operations for 1999 increased $8.3 million to $133.9
million from $125.6 million for 1998. As noted above, higher air fare expenses
accounted for $2.9 million of the increase. American Hawaii's operating costs,
before air expenses, increased $2.8 million reflecting higher passenger and
onboard expenses associated with the occupancy increase, and higher fuel costs.
Delta Queen's operating costs, before air expenses, increased $2.6 million
reflecting higher passenger and commission expenses associated with the
occupancy increase, and higher fuel costs. Consolidated maintenance expenses
increased $2.1 million. Consolidated gross profit increased $8.2 million in 1999
from 1998.

Consolidated SG&A expenses increased $12.5 million to $56.8 million for 1999
from $44.2 million in 1998. The increase reflects additional selling and
marketing spending at both cruise lines during the year. Of the additional
marketing spending, approximately $4.8 million was used to promote year 2000
sailings, whereas in the prior year, approximately $0.7 million was incurred for
1999 sailings. The third quarter of 1999 included marketing expenses for the
Columbia Queen amounting to $1.3 million, with no comparable expenses in 1998.
The remainder of the increase is mainly attributable to salary and benefits
associated with new personnel hired during 1999 in connection with our capacity
expansion efforts.

As a result of increases in expenses in excess of increases in revenues,
consolidated operating income for 1999 was $1.6 million as compared to $5.5
million for 1998.

Interest income increased by $2.0 million as a result of proceeds received by us
upon the sale of additional common stock during 1999. Interest expense and other
financing costs increased during 1999 due to the accrual of $2.6 million payable
to the guarantor of our letter of credit facility related to our agreed upon
purchase of the ms Nieuw Amsterdam in October 2000. We also amortized $0.5
million of deferred financing fees related to this transaction. During the year,
we also capitalized $2.3 million of interest expense related to our vessels
under construction. We capitalized no interest expense in the prior year.

Income tax benefit was $1.0 million in 1999 as compared to income tax expense
$0.1 million in 1998 due to a pre-tax loss of $2.8 million in 1999, while 1998
had pre-tax income of $0.3 million.

RESCISSION  OF ACCOUNTING METHOD
On November 2, 1999 we announced that we had rescinded our prior adoption of the
American Institute of Certified Public Accountants Accounting Standards
Executive Committee's Statement of Position ("SOP") No. 93-7, "Reporting on
Advertising Costs", relating to the deferral of direct response advertising
costs. The deferral method provided for in SOP 93-7 was adopted in 1999, and
made effective as of January 1, 1999. Under SOP 93-7, we deferred recognition of
direct response advertising costs related to direct response advertising efforts
for future cruises. These deferred costs were recognized in the periods that the
cruises promoted by the efforts were completed, and the related cruise revenue
recognized. We rescinded our adoption of SOP 93-7 due to difficulties we
encountered in implementing the new method. In rescinding SOP 93-7, we returned
to our prior method of recognizing expenses for direct response advertising
costs



                                       22
<PAGE>   23
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONT'D.)

when those costs are incurred. As a result of the rescission of SOP 93-7, we
restated our earnings for the first quarter of 1999 to reflect a loss of $6.3
million, or ($0.44) per share, compared to our previously reported loss of $4.5
million, or ($0.32) per share. We also restated our earnings for the second
quarter of 1999 to $2.5 million, or $0.14 per share, compared to our previously
reported earnings of $2.4 million, or $0.13 per share. As previously disclosed,
the Securities and Exchange Commission has been conducting an informal
investigation into our adopting and then rescinding the AICPA's Statement of
Position 93-7 relating to the deferral of direct response advertising costs.
While the SEC has not brought any formal proceedings against us, it is possible
that the SEC's informal inquiry or a subsequent formal inquiry or proceeding
could result in sanctions or orders against us. We cannot predict at this time
whether any such sanctions would have a material impact.

RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standard ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities". This statement establishes accounting and
reporting standards for derivative instruments and for hedging activities. It
requires that derivatives be recognized in the balance sheet at fair value and
specifies the accounting for changes in fair value. In June 1999, the FASB
issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB Statement No. 133" to defer
the effective date of SFAS No. 133, until fiscal years beginning after June 15,
2000. At December 31, 1999, December 31, 2000 and February 28, 2001 the Company
had no derivative financial instruments, nor does it engage in any hedging
activities. Therefore, SFAS No. 133 is not expected to have a material impact on
its results of operations or financial position. Should the Company elect to
engage in derivative and hedging activities in the future, the impact of SFAS
No. 133 on the consolidated financial statements would depend on a variety of
factors including the level of future hedging activities, the types of hedging
instruments used and the effectiveness of such instruments.

OTHER MATTERS
On September 8, 2000 the Company announced its intention to relocate its
corporate and operational headquarters, from Chicago, IL and New Orleans, LA
respectively, to a new leased facility which is being constructed in Sunrise,
FL. In connection with the move, the Company is eligible to receive economic
incentives from the State of Florida, Broward County and the City of Sunrise of
up to $4.2 million once certain conditions are met. The economic benefits to be
received by the Company include tax refunds beginning in 2002 under Florida's
Qualified Target Industry Tax (QTI) Refund Program, state job training funds and
certain cash grants approved by the local municipalities. These benefits will be
recognized as they are earned. Construction of the new facility is expected to
be completed in November 2001 and the relocation is expected to be largely
complete by early 2002. The Company has offered to relocate most employees to
the new location but the number of employees intending to relocate is largely
undetermined as of December 31, 2000. The Company will incur severance and
retention costs pertaining to those employees choosing not to relocate (see Note
14 to the Consolidated Financial Statements). The Company also expects to incur
employee relocation costs and additional relocation expenses to move equipment
and furniture, which will be expensed as incurred. As of December 31, 2000 the
Company has not recognized any expense for relocation of employees or Company
assets, but has recognized $0.6 million in severance expenses for employees who
have communicated to the Company in writing their intention not to relocate. The
Company may also incur lease termination expenses or a write-off of leasehold
improvements if it elects to vacate its Chicago or New Orleans facilities. At
this time the Company has not determined whether it will completely vacate these
facilities and therefore is unable to determine the potential costs, if any, it
will incur in connection with terminating the leases or writing off the
leasehold improvements.

On February 20, 2001, the ms Patriot returned to its home port so that a thrust
bearing in the vessel's generator drive train could be replaced. This resulted
in refunds issued to passengers of approximately $1.6 million, and travel
credits for a future cruise expected to cost approximately $0.5 million. The
S.S. Independence will undergo an unscheduled dry-dock beginning March 24, 2001
to repair its bow thruster. The vessel is expected to be out of service for a
period of seven days, and the expected cost of the repairs is expected to be
between $400,000 and $500,000.



                                       23
<PAGE>   24
ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss from adverse changes in market prices and rates.
Our principal market risk is due to changes in interest rates which affects us
directly in our borrowing activities. At December 31, 2000, the Company's
outstanding variable rate debt had a carrying value of $229.8 million. The
Company also had cash and cash equivalents of $165.0 million. The company
invests its excess cash in highly liquid short-term investments. A hypothetical
instantaneous 100 basis point change in interest rates from their levels of
December 31, 2000 would impact the earnings and cash flows of the Company by
approximately $1.1 million.

On January 31, 2001, the Company issued $50 million of one-year notes, which
bear interest at LIBOR minus 0.10%.and used $25 million of the proceeds to
retire previously issued notes which were due on January 31, 2001. We will be
issuing up to $950 million in additional debt related to our shipbuilding
program for the Hawaii cruise vessels. This debt will be subject to the
prevailing market conditions at the time it is issued. The Company does not
employ any interest rate hedging techniques to manage interest rate risk, nor
does it hold or issue any derivative or other financial instruments for trading
purposes. Should we commence using interest rate hedging techniques, we may not
be successful in reducing or eliminating our interest rate risk in the future.

Other market risks to which we are exposed relate to bunker and diesel fuel and
food commodity prices, which we do not typically manage through the use of
financial instruments. Increases in food and fuel commodity prices could
materially affect our operating results. In the year 2000, the Company's bunker
and diesel fuel costs amounted to 3.6% of total revenues, as compared to 2.2% of
revenues in 1999. Food costs did not materially change as percentage of revenues
in 2000 as compared to 1999.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                            Page
                                                                                           Number
                                                                                          -------
        <S>                                                                                <C>
        Independent Auditors' Report...................................................      25
        Consolidated Financial Statements
             Consolidated Balance Sheets...............................................      26
             Consolidated Statements of Operations.....................................      27
             Consolidated Statements of Cash Flows.....................................      28
             Consolidated Statements of Changes in Stockholders' Equity................      29
             Notes to Consolidated Financial Statements................................      30
             Financial Statement Schedules
                 Schedule I - Condensed Financial Information of Registrant............      44
                 Schedule II - Valuation and Qualifying Accounts.......................      48
</TABLE>







                                       24
<PAGE>   25

                          INDEPENDENT AUDITORS' REPORT




The Board of Directors and Stockholders
American Classic Voyages Co.

We have audited the accompanying consolidated balance sheets of American Classic
Voyages Co. and subsidiaries as of December 31, 2000 and 1999, and the related
consolidated statements of operations, changes in stockholders' equity and cash
flows for each of the years in the three-year period ended December 31, 2000. In
connection with our audits of the consolidated financial statements, we also
have audited the financial statement schedules. These consolidated financial
statements and financial statement schedules are the responsibility of
management of American Classic Voyages Co. Our responsibility is to express an
opinion on these consolidated financial statements and financial statement
schedules based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of American Classic
Voyages Co. and subsidiaries as of December 31, 2000 and 1999 and the results of
their operations and their cash flows for each of the years in the three-year
period ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States of America. Also, in our opinion, the
related financial statement schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.

                                                               /s/ KPMG LLP

                                                                   KPMG LLP



Chicago, Illinois
February 27, 2001







                                       25
<PAGE>   26
                          AMERICAN CLASSIC VOYAGES CO.
                           CONSOLIDATED BALANCE SHEETS
                   (In thousands except shares and par value)

<TABLE>
<CAPTION>

                                                                                                               December 31,
                                                                                                        2000                1999
                                                                                                      -----------------------------
<S>                                                                                                   <C>                 <C>
ASSETS
Cash and cash equivalents ..................................................................          $  52,073           $  42,399
Restricted short-term investments ..........................................................             62,954                 289
Marketable securities ......................................................................              7,843                  --
Accounts receivable ........................................................................              4,552               1,205
Inventory ..................................................................................              5,417               2,529
Prepaid air tickets ........................................................................              3,646               1,930
Prepaid expenses and other current assets ..................................................              4,814               3,491
                                                                                                      -----------------------------
     Total current assets ..................................................................            141,299              51,843
                                                                                                      =============================

Property and equipment, net (Note 3) .......................................................            320,657             150,797
Vessels under construction (Notes 4 and 8) .................................................            258,467              74,601
Deferred income taxes, net (Note 10) .......................................................             19,744              12,446
Other assets ...............................................................................             12,448               4,303
                                                                                                      -----------------------------
     Total assets ..........................................................................          $ 752,615           $ 293,990
                                                                                                      =============================
LIABILITIES
Accounts payable ...........................................................................             41,930           $  14,534
Other accrued liabilities ..................................................................             28,581              23,712
Notes payable, current portion (Note 5) ....................................................            100,000                  --
Current portion of long-term debt ..........................................................             15,768               4,100
Unearned passenger revenues ................................................................             49,413              41,381
                                                                                                      -----------------------------
     Total current liabilities .............................................................            235,692              83,727

Notes payable, non current portion (Note 5) ................................................             25,000                  --
Long-term debt, less current portion (Note 6) ..............................................            218,420              80,463
                                                                                                      -----------------------------
     Total liabilities .....................................................................          $ 479,112           $ 164,190
                                                                                                      =============================

Convertible preferred securities of a subsidiary trust holding solely 7%
convertible subordinated debentures of the Company (Note 7) ................................          $ 100,000           $      --
                                                                                                      =============================

COMMITMENTS AND CONTINGENCIES (Note 8)

STOCKHOLDERS' EQUITY (Note 9)
Preferred stock, $0.01 par value (10,000,000 and 5,000,000 shares
   authorized, respectively; none issued and outstanding) ..................................          $      --           $      --
Common stock, $0.01 par value (100,000,000 and 40,000,000 shares authorized,
   respectively; 20,969,183 and 18,602,206 shares issued and
   outstanding, respectively) ..............................................................                210                 187

Additional paid-in capital .................................................................            204,555             151,094
Accumulated deficit ........................................................................            (29,645)            (19,573)

Common stock in treasury, at cost (51,000 shares) ..........................................               (757)               (757)

Unearned restricted stock and stock units ..................................................               (860)             (1,151)
                                                                                                      -----------------------------
     Total stockholders' equity ............................................................            173,503             129,800
                                                                                                      -----------------------------
     Total liabilities and stockholders' equity ............................................          $ 752,615           $ 293,990
                                                                                                      =============================
</TABLE>



 The accompanying notes are an integral part of these consolidated Financial
Statements.



                                       26
<PAGE>   27

                          AMERICAN CLASSIC VOYAGES CO.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)



<TABLE>
<CAPTION>
                                                                                                Years Ended December 31,
                                                                                       2000               1999              1998
                                                                                    -----------------------------------------------
<S>                                                                                 <C>                <C>                <C>
Revenues ..................................................................         $ 221,625          $ 208,717          $ 192,225

Cost of operations (exclusive of depreciation shown below) ................           143,617            133,863            125,595
                                                                                    -----------------------------------------------

Gross profit ..............................................................            78,008             74,854             66,630

Selling, general and administrative expenses ..............................            74,745             56,765             44,232
Depreciation expense ......................................................            16,369             16,440             16,912
                                                                                    -----------------------------------------------

Operating (loss) income ...................................................           (13,106)             1,649              5,486

Interest income ...........................................................             7,025              3,102              1,117
Interest expense and other financing costs ................................             3,612              7,549              6,639
Accrued  distributions on convertible preferred securities and
related financing costs ...................................................             6,247                 --                 --
Other (income) expense ....................................................                18                (10)              (300)
                                                                                    -----------------------------------------------
Income (loss) before income taxes .........................................           (15,958)            (2,788)               264

Income tax expense (benefit) ..............................................            (5,886)            (1,038)               107
                                                                                    -----------------------------------------------

Net income (loss) .........................................................         $ (10,072)         $  (1,750)         $     157
                                                                                    ===============================================
PER SHARE INFORMATION
Basic:
     Weighted-average shares outstanding ..................................            20,621             17,167             14,137
     Earnings (loss) per share ............................................         $   (0.49)         $   (0.10)         $    0.01

Diluted:
     Weighted-average shares outstanding ..................................            20,621             17,167             14,777
     Earnings (loss) per share ............................................         $   (0.49)         $   (0.10)         $    0.01
</TABLE>


The accompanying notes are an integral part of these consolidated Financial
Statements.



                                       27
<PAGE>   28
                          AMERICAN CLASSIC VOYAGES CO.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)


<TABLE>
<CAPTION>
                                                                                                Years Ended December 31,
                                                                                     2000                1999               1998
                                                                                  -------------------------------------------------
<S>                                                                               <C>                 <C>                 <C>
OPERATING ACTIVITIES
     Net (loss) income .................................................          $ (10,072)          $  (1,750)          $     157

ADJUSTMENTS TO RECONCILE
NET (LOSS) INCOME TO NET CASH PROVIDED
BY OPERATING ACTIVITIES
     Depreciation expense ..............................................             16,369              16,440              16,912
     Gain on sale of assets ............................................                 --                  --                (300)
     Changes in certain working
         capital accounts and other
              Accounts receivable ......................................             (3,347)                784                (690)
              Accounts payable .........................................             13,424               1,039                (789)
              Other accrued liabilities ................................              5,015               8,210                (529)
              Other assets .............................................             (5,798)             (1,050)               (258)
              Unearned passenger revenues ..............................              8,032               2,084               5,584
              Prepaid expenses and other ...............................             (5,927)              1,103              (1,563)
                                                                                  -------------------------------------------------
     Net cash provided by operating activities .........................             17,696              26,860              18,524
                                                                                  -------------------------------------------------

INVESTING ACTIVITIES
     (Increase) decrease in restricted investments .....................            (62,665)               (229)                265
     Capital expenditures ..............................................           (356,123)            (79,866)             (8,789)
     Proceeds from sale of assets ......................................                 --                  --                 300
     Purchase of marketable securities .................................             (7,843)                 --                  --
                                                                                  -------------------------------------------------
     Net cash used in investing activities .............................           (426,631)            (80,095)             (8,224)
                                                                                  -------------------------------------------------

FINANCING ACTIVITIES
     Proceeds from borrowings ..........................................            302,200              12,200                  --
     Repayments of borrowings ..........................................            (27,575)             (9,125)             (4,100)
     Issuance of convertible preferred securities of
     subsidiary trust ..................................................            100,000                  --                  --
     Purchase of common stock ..........................................                 --                  --                (757)
     Issuance of common stock, net of issuance costs ...................             53,629              68,697               2,907
     Deferred financing fees ...........................................             (9,645)             (3,142)               (533)
                                                                                  -------------------------------------------------
     Net cash provided by (used in) financing activities ...............            418,609              68,630              (2,483)
                                                                                  -------------------------------------------------

     Increase in cash and cash equivalents .............................              9,674              15,395               7,817
     Cash and cash equivalents, beginning of period ....................             42,399              27,004              19,187
                                                                                  -------------------------------------------------
     Cash and cash equivalents, end of period ..........................          $  52,073           $  42,399           $  27,004
                                                                                  =================================================

SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
     Cash paid during the period for:
         Interest (net of capitalized interest) ........................          $      --           $   4,189           $   6,438
         Income taxes ..................................................          $     177           $     258           $     232
</TABLE>


The accompanying notes are an integral part of these consolidated Financial
Statements.



                                       28
<PAGE>   29
                          AMERICAN CLASSIC VOYAGES CO.
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                 (In thousands)


<TABLE>
<CAPTION>
                                                                                                         Unearned         Total
                                                Common      Additional    Accumulated     Treasury   Restricted Stock  Stockholders'
                                                 Stock    Paid-in Capital   Deficit         Stock    And Stock Units     Equity
                                               ---------  --------------- -----------     ---------  ----------------  ------------
<S>                                            <C>           <C>           <C>            <C>            <C>            <C>
Balance, December 31, 1997 .................   $     140     $  77,059     $ (17,980)     $      --      $     (90)     $  59,129
Net income .................................          --            --           157             --             --            157
Stock units earned .........................          --            --            --             --             90             90
Stock units issued to Directors, net .......          --           138            --             --           (107)            31
Stock issued under option and
benefit plans ..............................           3         3,254            --             --             --          3,257
Purchase of treasury stock .................          --            --            --           (757)            --           (757)
                                               ---------     ---------     ---------      ---------      ---------      ---------
Balance, December 31, 1998 .................         143        80,451       (17,823)          (757)          (107)        61,907
Net loss ...................................          --            --        (1,750)            --             --         (1,750)
Stock units earned .........................          --            --            --             --            107            107
Stock units issued to Directors, net .......          --           205            --             --           (103)           102
Restricted stock grant .....................          --         1,397            --             --         (1,048)           349
Stock issued under option and
benefit plans ..............................           4         4,336            --             --             --          4,340
Stock offering, net of expenses ............          40        63,464            --             --             --         63,504
Tax  benefit  from  exercise of stock
options ....................................          --         1,241            --             --             --          1,241
                                               ---------     ---------     ---------      ---------      ---------      ---------
Balance, December 31, 1999 .................         187       151,094       (19,573)          (757)        (1,151)       129,800
Net loss ...................................          --            --       (10,072)            --             --        (10,072)
Stock units earned .........................          --            --            --             --            103            103
Stock units issued to Directors, net .......          --           377            --             --           (161)           216
Restricted stock grant vesting .............          --            --            --             --            349            349
Stock issued under option and
benefit plans ..............................           3         5,435            --             --             --          5,438
Stock offering, net of expenses ............          20        46,709            --             --             --         46,729
Tax benefit from exercise of stock
options ....................................          --           940            --             --             --            940
                                               ---------     ---------     ---------      ---------      ---------      ---------
Balance, December 31, 2000 .................   $     210     $ 204,555     $ (29,645)     $    (757)     $    (860)     $ 173,503
                                               =========     =========     =========      =========      =========      =========
</TABLE>


The accompanying notes are an integral part of these consolidated Financial
Statements.





                                       29

<PAGE>   30
                          AMERICAN CLASSIC VOYAGES CO.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS
American Classic Voyages Co., ("the Company") through its subsidiaries, operates
three cruise lines under the names of The Delta Queen Steamboat Co., American
Hawaii Cruises and United States Lines. The Delta Queen Steamboat Co., through
its subsidiaries, owns and operates the American Queen, Mississippi Queen, Delta
Queen and Columbia Queen riverboats, which conduct overnight cruise operations
on certain U.S. inland waterways. Great Hawaiian Cruise Line, Inc., doing
business as American Hawaii Cruises, through its subsidiaries, owns and operates
the S.S. Independence steamship providing overnight cruises among the Hawaiian
Islands. Project America Inc., doing business as United States Lines ("USL"),
through its subsidiaries, owns and operates the ms Patriot, which also provides
overnight cruises among the Hawaiian Islands. USL will also operate the new
Hawaii vessels currently under construction. Ocean Development Company, a wholly
owned subsidiary of Project America Inc., oversees the design and construction
of new vessels.

PRINCIPLES OF CONSOLIDATION
The accompanying Consolidated Financial Statements include the accounts of the
Company and all of its subsidiaries, and have been prepared in accordance with
accounting principles generally accepted in the United States of America. All
significant intercompany accounts and transactions have been eliminated in
consolidation. Certain previously reported amounts have been reclassified to
conform to the 2000 presentation.

USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
certain estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses, and the disclosure of contingent assets and
liabilities to prepare these consolidated financial statements. Actual results
could differ from those estimates.

CASH AND CASH EQUIVALENTS
All highly liquid investments purchased with an original maturity of three
months or less are considered cash equivalents.

RESTRICTED SHORT-TERM INVESTMENTS
At December 31, 2000 and 1999, restricted short-term investments primarily
reflect proceeds from debt issuances that have been placed in escrow accounts
and are related to the construction of new vessels.

MARKETABLE SECURITIES
Unrestricted short-term investments which are held to maturity and mature in
less than one year are classified as marketable securities.

INVENTORIES
Inventories consists of provisions, supplies, fuel and gift shop merchandise
carried at the lower of cost (weighted-average) or market.

PREPAID AIR TICKETS
Prepaid air tickets consist of air tickets purchased by the Company and resold
to passengers in advance of sailings.

PROPERTY AND EQUIPMENT
Property and equipment primarily consists of vessels and leasehold improvements
which are recorded at cost. Construction-in-progress represents expenditures for
the vessels under lay-up and/or dry-dock. Depreciation is computed using the
straight-line method based upon the estimated useful lives of the various
classes of assets ranging from 3 to 40 years. Lay-up and dry-dock expenditures
relating to vessel improvements or betterments are capitalized. In addition,
lay-up and dry-dock expenditures relating to cleaning, repairs and maintenance
are accrued evenly over the period to the next scheduled lay-up and/or dry-dock
and are based on the best available estimate of total costs. The accrual for
these costs is included in other accrued liabilities and was $4.0 and $5.1
million at December 31, 2000 and 1999 respectively.

For vessels acquired and put into service in 2000, transportation, renovation
and other costs necessary for placing the vessels into service have been
capitalized as part of the cost of the asset. Depreciation of these vessels
reflects the estimated salvage values based on the expected recoverable amounts
at the end of their depreciable lives.

                                       30

<PAGE>   31

                          AMERICAN CLASSIC VOYAGES CO.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D.)

VESSELS UNDER CONSTRUCTION
Vessels under Construction consists mainly of payments to shipyards as part of
the Company's various new shipbuilding programs (see note 4 for further
information). Additional capitalized costs include furniture, fixtures and
equipment, technical design, engineering, and architectural fees and owner
supplied items. Interest costs associated with the vessels under construction
are capitalized during the construction period and were $11.7 million and $2.3
million for the years ended December 31, 2000 and 1999 respectively.

IMPAIRMENT OF LONG-LIVED ASSETS
Long-lived assets and certain identifiable intangibles are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to future net cash flows expected to be generated by the asset. If such assets
are considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amount of the assets exceed their fair value.

INCOME TAXES
Deferred tax assets and liabilities are recognized for the expected future tax
consequences of temporary differences between carrying amounts and the tax bases
of assets and liabilities.

REVENUE AND EXPENSE RECOGNITION
The Company generally receives passenger fares up to 60 days prior to the cruise
date, which are recorded as a liability for unearned passenger revenue. The
liability is recognized as revenue on a pro-rata basis during the associated
cruise. The Company is self-insured in respect of guaranteeing the Company's
passenger cruise deposits. Revenues from the sale of airline tickets and land
packages are recorded at the gross amount billed to customers when earned, with
their corresponding costs included in cost of operations. Advertising costs are
expensed as incurred except for brochure costs, which result in tangible assets.
Brochure costs are recorded as prepaid expenses and charged to expense as
consumed.

EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income by the
weighted-average number of common shares outstanding during the period. Diluted
earnings per share is computed by dividing net income by the sum of weighted-
average common shares outstanding during the period plus potentially dilutive
common shares. Potentially dilutive common shares that are anti-dilutive are
excluded from earnings per share.

Following is a reconciliation of the shares used in calculating basic and
dilutive earnings per share (in thousands):

                                             2000       1999        1998
                                          ==================================
    Weighted-average common shares
    outstanding                             20,621     17,167      14,137
    Effect of dilutive securities -
    options and stock units                   ----       ----         640
                                          ----------------------------------
    Weighted-average common
    equivalent shares outstanding -
    assuming dilution                       20,621     17,167      14,777
                                          ==================================

As the Company reported net losses for the years ended December 31, 2000 and
1999, diluted earnings per share was computed in the same manner as basic
earnings per share.

FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments include restricted short-term investments,
marketable securities, accounts receivable, accounts payable, short-term notes
payable, long-term debt and convertible preferred securities of a wholly owned
subsidiary trust ("trust preferred securities"). At December 31, 2000 and 1999,
the fair values of all financial instruments, with the exception of the trust
preferred securities, were not materially different from their carrying or
contract values. See Note 7 to the Consolidated Financial Statements for the
fair value of these securities.

                                       31
<PAGE>   32

                          AMERICAN CLASSIC VOYAGES CO.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D.)

STOCK-BASED COMPENSATION PLANS
The Company accounts for its stock -based compensation plans in accordance with
the provisions of Statement of Financial Accounting Standards ("SFAS") No. 123,
"Accounting for Stock-Based Compensation." As permitted under this statement,
the Company has chosen to apply the intrinsic value-based method of accounting
as prescribed by Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees." See Note 9 for the pro forma effect of the fair
value accounting method, as defined in SFAS No. 123.

OPERATING SEGMENTS
The nature of the Company's operations are such that the Company operates as a
single business segment under the standards set forth in SFAS No. 131.

NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities". This statement establishes accounting and
reporting standards for derivative instruments and for hedging activities. It
requires that derivatives be recognized in the balance sheet at fair value and
specifies the accounting for changes in fair value. In June 1999, the FASB
issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB Statement No. 133" to defer
the effective date of SFAS No. 133, until fiscal years beginning after June 15,
2000. As of December 31, 1999, December 31, 2000 and February 28, 2001 the
Company had no derivative financial instruments and did not engage in hedging
activities. Therefore, SFAS 133 is not expected to have a material impact on its
results of operations or financial position. Should the Company elect to engage
in derivative and hedging activities in the future, the impact of SFAS No. 133
on the consolidated financial statements would depend on a variety of factors
including the level of future hedging activities, the types of hedging
instruments used and the effectiveness of such instruments.

RISKS AND UNCERTAINTIES
The Company is subject to varying degrees of risk and uncertainty. The Company
insures its vessels and other business assets against insurable risks in a
manner it deems appropriate. The Company believes that there is no concentration
of risk with any single customer. See Note 8 for a discussion of concentration
of risk for suppliers, or a small group of suppliers, whose failure or
non-performance would materially affect the Company's results.


NOTE 2.  SHIP ADDITIONS

Under the terms of an agreement finalized on October 15, 1999, the Company
acquired on October 18, 2000 the ms Nieuw Amsterdam from Holland America Line
("HAL") for $114.5 million. Upon taking delivery of the vessel, the Company
renamed it the ms Patriot and is operating it as a 1,212-passenger U.S.-flagged
vessel serving the Hawaiian market. The purchase price was financed with $30
million of proceeds from the issuance of Trust Preferred Securities (see Note 7)
and an $84.5 million promissory note issued to HAL by the Company (see Note 6).
The Company also incurred $20.4 million in renovation, refurbishment and other
capital expenditures necessary to ready the vessel for service. This amount was
funded from operating cash flow. The vessel was placed into service on December
9, 2000. The promissory note bears interest at a floating rate equal to the
prevailing prime rate, which was 9.5% at the time of purchase. The ms Patriot is
the first ship that the Company intends to operate under the United States Lines
brand name.

In May 1999 the Company acquired a riverboat originally built for the casino
trade. The Company paid $3.2 million to acquire the vessel and incurred $32.8
million and $8.1 million of costs in 2000 and 1999 respectively, including
capitalized interest, to convert the ship into an overnight passenger vessel
with 157 passenger berths. The vessel entered service on May 27, 2000 and
operates weekly cruise vacations out of Portland, Oregon on the Columbia River
system. The conversion was financed primarily through borrowings on the
Company's revolving credit facility and through the Company's operating cash
flow.


                                       32
<PAGE>   33

                          AMERICAN CLASSIC VOYAGES CO.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D.)


NOTE 3. PROPERTY AND EQUIPMENT

Property and Equipment consists of (in thousands):
                                                        December 31,
                                                    2000            1999
                                              ---------------------------------
     Vessels                                    $   408,598      $   222,666
     Buildings and leasehold improvements             8,086            7,779
     Construction-in-progress                         1,407            3,278
     Other                                           10,971            9,122
                                              ---------------------------------
                                                    429,062          242,845
     Less accumulated depreciation                 (108,405)         (92,048)
                                              ---------------------------------
                                                $   320,657      $   150,797
                                              =================================


NOTE 4. VESSELS UNDER CONSTRUCTION

The Vessels under Construction balance includes payments to shipyards, design
and engineering fees, construction management and oversight costs, various
owner-supplied items and capitalized interest. There are four vessels under
construction as of December 31, 2000. See Note 8 for further information.

Vessels under construction consists of the following (in thousands):
                                                        December 31,
                                                    2000            1999
                                              ---------------------------------
     New Hawaii Ship #1                         $   175,223      $  54,333
     New Hawaii Ship #2                              27,624          1,471
     cv Cape May Light                               30,479          5,067
     cv Cape Cod Light                               25,141          2,296
     Columbia Queen                                      --         11,280
     ms Patriot                                          --            154
                                              ---------------------------------
                                                $   258,467      $  74,601
                                              =================================

The balance for the ms Patriot in 1999 consisted of design and engineering fees
and various owner supplied items which were purchased in advance of taking
delivery of the ship.


NOTE 5. NOTES PAYABLE

On April 8, 1999, the Company received a commitment from the Maritime
Administration ("MARAD") for up to $1.1 billion in financing guarantees. The
commitment amount represents 87.5% of the estimated total cost of the initial
two Hawaii vessels (see Note 8), including shipyard costs, design and
engineering fees and capitalized interest.

During 2000, the Company issued $125 million of MARAD-guaranteed notes
pertaining to the construction of the first Hawaii vessel as follows:

-    February 10, $25 million bearing interest at LIBOR minus 0.05%, due
     January 31, 2001
-    August 10, $50 million bearing interest at LIBOR minus 0.05%, due
     July 31, 2001
-    November 9, $50 million bearing interest at LIBOR minus 0.10%, due
     October 31, 2001.

The Company intends to refinance all of these notes on or before the maturity
date. On January 31, 2001 the Company issued an additional $50 million of notes
guaranteed by MARAD bearing interest at LIBOR minus 0.10%. Interest is payable
quarterly and the principal amount is due on January 31, 2002. A portion of the
proceeds from this issuance was used to pay down the $25 million note due
January 31, 2001. Thus, at December 31, 2000 the $25 million note is shown as a
non-current liability in the Company's consolidated financial statements. The
weighted average interest rates of the notes issued February 10, August 10, and
November 9, 2000 were 6.45%, 6.67% and 6.66% respectively.

                                       33

<PAGE>   34

                          AMERICAN CLASSIC VOYAGES CO.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D.)


NOTE 6. LONG-TERM DEBT

Long-term debt consisted of (in thousands):
<TABLE>
<CAPTION>
                                                                                       December 31,
                                                                                     2000       1999
                                                                                -----------------------
<S>                                                                                <C>        <C>
U.S. Government Guaranteed Ship Financing Note, American Queen Series,
  LIBOR+0.25% floating rate notes due semi-annually beginning February 24, 1996
  through August 24, 2005......................................................... $ 11,961   $ 14,385
U.S. Government Guaranteed Ship Financing Bond, American Queen Series, 7.68%
  fixed rate, sinking fund bonds due semi-annually beginning February 24, 2006
  through June 2, 2020............................................................   36,198     36,198
U.S. Government Guaranteed Ship Financing Note, Independence Series A,
  LIBOR+0.27% floating rate notes due semi-annually beginning June 7, 1996
  through December 7, 2005........................................................    6,604      7,926
U.S. Government Guaranteed Ship Financing Bond, Independence Series A, 6.84%
  fixed rate, sinking fund bonds due semi-annually beginning June 7, 2006
  through December 7, 2015........................................................   13,215     13,215
U.S. Government Guaranteed Ship Financing Note, Independence Series B,
  LIBOR+0.27% floating rate notes due semi-annually beginning December 7, 1996
  through December 7, 2005........................................................    1,770      2,124
U.S. Government Guaranteed Ship Financing Bond, Independence Series B, 7.46%
  fixed rate, sinking fund bonds due semi-annually beginning June 7, 2006
  through December 7, 2015........................................................    3,540      3,540
U.S. Government Guaranteed Ship Financing Bond, Cape May Series, 7.25% fixed
  rate, sinking fund bonds due semi-annually beginning no later than
  October 16, 2002 through April 16, 2027.........................................   37,900         --
U.S. Government Guaranteed Ship Financing Bond, Cape Cod Series, 7.25% fixed
  rate, sinking fund bonds due semi-annually beginning no later than October
  16, 2002 through April 16, 2027.................................................   38,500         --
Patriot promissory note, floating prime rate due semi-annually beginning March
  31, 2001 with a final payment of $23.7 million due on January 18, 2007..........   84,500         --
Revolving credit facility (maximum availability of $30 million at December 31,
  2000 and $70 million at December 31, 1999)......................................       --      7,175
                                                                                  ---------------------
                                                                                    234,188     84,563
Less current portion..............................................................   15,768      4,100
                                                                                  ---------------------
                                                                                   $218,420   $ 80,463
                                                                                  =====================
</TABLE>

The American Queen Series, the Independence Series A and B, Cape May Series and
Cape Cod Series debt are guaranteed by the U.S. Government through MARAD and are
secured by first mortgages on the American Queen, the S.S. Independence, Cape
May Light and Cape Cod Light, respectively. These Series contain various
covenants which, among other things, require the maintenance of certain
financial ratios measured at the end of each year. On October 16, 2000 the
Company issued $37.9 million and $38.5 million of long-term bonds to finance
construction of the cv Cape May Light and cv Cape Cod Light respectively (see
Note 8). Semi-annual principal payments commence six months after delivery of
the ships. The bonds are guaranteed by MARAD pursuant to a commitment received
by the Company from MARAD on March 31, 2000 for financing guarantees pertaining
to the two ships.

On October 18, 2000 the Company acquired the ms Nieuw Amsterdam from Holland
America Line ("HAL") for $114.5 million (see Note 2). In connection with the
purchase, the Company issued to HAL an $84.5 million promissory note. The
promissory note bears interest at a floating rate equal to the prevailing prime
rate, and is payable monthly in arrears. Principal paydowns of $5.1 million are
scheduled for each March 31st and September 30th, beginning with March 31, 2001,
with a final payment of $23.7 million due on January 18, 2007.

                                       34

<PAGE>   35

                          AMERICAN CLASSIC VOYAGES CO.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D.)

In the third quarter of 2000 DQSC, as borrower, amended its credit facility with
The Chase Manhattan Bank, as agent, and several participant banks (the "Chase
Facility"). The Company has a maximum of $30 million available to it in the form
of revolving credit loans until the maturity date of the facility, which is
September 13, 2001. Any loans outstanding on the maturity date are converted to
non-amortizing term loans which mature September 13, 2002. Borrowings under the
amended facility bear interest at a rate, at the option of the Company, equal to
either (1) the greater of Chase's prime rate or certain alternative base rates
plus a margin ranging from 0.50% to 0.75%, or (2) LIBOR plus a margin ranging
from 1.50% to 1.75%. The Company is also required to pay an unused commitment
fee at a rate of 0.50% per annum.

The Chase Facility will be used for general corporate purposes. The amended
facility is guaranteed by AMCV and secured by all of the assets of DQSC except
the American Queen, Cape May Light and Cape Cod Light and has various
limitations and restrictions on investments, additional indebtedness, the
construction costs of the new vessels, and other capital expenditures. DQSC is
required to comply with certain financial covenants, including maintenance of
minimum interest coverage ratios and maximum leverage ratios, as defined.

Maturities of long-term debt during the next five years ending December 31, 2001
through 2005 are $15,768,000, $17,296,000, $17,296,000, $17,296,000 and
$17,131,000 respectively

As of December 31, 2000, the Company was in compliance with all covenants under
its various debt agreements.


NOTE 7. TRUST PREFERRED SECURITIES

On February 22, 2000, AMCV Capital Trust I (the "Trust"), a wholly owned
subsidiary of the Company, completed an offering of 2,000,000 convertible
preferred securities ("trust preferred securities"). Each $50 security bears
interest at 7% and is convertible at the holder's election into 1.6207 shares of
the Company's common stock. All outstanding preferred securities are redeemable
by the Company upon maturity of the debentures issued to the trust, which is on
February 15, 2015, or upon early redemption. The outstanding preferred
securities may be redeemed for cash at the Company's option on or after February
19, 2003. The Trust used the proceeds of its offering to purchase certain junior
convertible subordinated debentures from the Company, which now comprise the
sole assets of the Trust. The net proceeds to the Company, after underwriting
fees and other costs, were approximately $96.3 million. A portion of the
proceeds were used to fund the $30 million letter of credit facility related to
the ms Nieuw Amsterdam purchase (see Notes 2 and 8) and to pay down outstanding
amounts on the Chase credit facility. The underwriters' overallotment option of
300,000 additional trust preferred securities was not exercised. The fair value
of these securities at December 31, 2001, based on quoted market prices, was
$27.75 per security, or $55.5 million.


NOTE 8. COMMITMENTS AND CONTINGENCIES

The Company leases certain facilities and equipment under operating leases. The
Company currently leases approximately 21,000 square feet from a partnership
controlled by an affiliated company, at an annual rate of approximately
$100,000. In addition, the Company's mainland operations facility in New Orleans
is maintained pursuant to an assignment from local authorities. The Company paid
approximately $171,000, $168,000 and $165,000 under this arrangement for the
years ended December 31, 2000, 1999 and 1998 respectively. This arrangement may
be terminated at any time by the local authorities upon determination that a
superior maritime use is deemed to exist. Rent expense for the years ended
December 31, 2000, 1999 and 1998 was approximately $912,000, $662,000 and
$842,000, respectively.



                                       35

<PAGE>   36

                          AMERICAN CLASSIC VOYAGES CO.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D.)

As of December 31, 2000 the Company is obligated to make minimum rental
payments under all operating leases through 2016, excluding assignment payments,
as follows:

          (in thousands)
          2001                  $    1,416
          2002                       2,379
          2003                       2,562
          2004                       2,475
          2005                       2,247
          thereafter                28,678
                               ------------
                                $   39,757
                               ============

The Company is subject to litigation in the ordinary course of business. In the
opinion of management, the outcome of such litigation will not have a material
effect on the results of operations or financial position of the Company as most
is covered by insurance, net of a deductible.

HAWAII VESSELS
On March 9, 1999, the Company executed definitive agreements with Ingalls
Shipbuilding, Inc. to construct at least two new vessels for the Hawaii cruise
market. The new Hawaii cruise ships will have the capacity to accommodate
approximately 1,900 passengers each. The contract provides that Ingalls
Shipbuilding deliver the first new ship in January 2003 and the second ship in
January 2004. We currently estimate the new Hawaii cruise ships to cost
approximately $495 million each, including the cost of furnishings, fixtures and
equipment, as well as design, engineering and architectural fees, but excluding
capitalized interest. Ingalls Shipbuilding is claiming that the Company should
pay additional sums beyond the contract price for certain interior finish work
and has requested a delay in the delivery schedule. The Company believes that
the claims made by the shipyard for additional payments and a delay in the
delivery of the ships are unwarranted, and the Company intends to assert its
rights under the original provisions of the contract. In addition, the
shipbuilding contract provides the Company an option to build up to four
additional vessels. The estimated contract price of the first option vessel is
$487 million and the contract price for the subsequent option vessels will be
negotiated between the parties. Ingalls Shipbuilding will provide a limited
warranty for the design, material, and workmanship of each vessel for one year
after delivery.

COASTAL VESSELS
We are constructing two new coastal cruise vessels for our Delta Queen Coastal
Voyages line at Atlantic Marine, Inc. of Jacksonville, Florida. We expect each
vessel to have a total project cost, including furnishing, fixtures and
equipment, of approximately $40 million to $42 million. The coastal cruise
vessels will be approximately 300 feet long and provide accommodations for up to
224 passengers. The first vessel, the cv Cape May Light, is scheduled to be
delivered in April 2001. The second vessel, the cv Cape Cod Light, is expected
to be delivered in the third quarter of 2001. Atlantic Marine will provide a
limited warranty for the work, parts, and components of each vessel fabricated
by the yard for one year after delivery.

STOCK APPRECIATION UNITS
In 1999, the Company finalized an agreement with Holland America Line ("HAL") to
purchase the ms Nieuw Amsterdam for $114.5 million. The purchase agreement
required the Company to make an earnest money deposit of $30 million by January
17, 2000. The Company arranged for an unsecured letter of credit facility with
The Chase Manhattan Bank for up to $30 million and satisfied the deposit
requirement by posting a letter of credit for $30 million.

In 1999, persons and entities affiliated with Equity Group Investments, Inc.
("Equity"), the Company's largest stockholder, guaranteed the letter of credit
facility for the Company with The Chase Manhattan Bank ("Chase") for up to $30
million. Under an agreement dated October 15, 1999, as consideration for
issuance of the guarantee, the Company paid Equity a commitment fee of $500,000
in 1999 and agreed to pay Equity additional compensation in the form of stock
appreciation units contingent, in part, upon appreciation in the Company's
common stock above $21.90 per share. Equity's rights to receive this additional
compensation vested, on a monthly basis, during the period that the guarantee
remained outstanding. On February 22, 2000, the Company deposited $30 million
into a cash collateral account with Chase from proceeds received by the Company
from the securities offering discussed in Note 7, thereby terminating the Equity
guarantee. The Company has the right to retire Equity's stock appreciation units
by paying a per unit price, which escalates each year, during the first three
years after issuance. The price of the Company's right to retire Equity's stock
appreciation units was $11 per unit if the

                                       36

<PAGE>   37

                          AMERICAN CLASSIC VOYAGES CO.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D.)

Company retired the units by October 15, 2000, $13 per unit if the Company
retires the units by October 15, 2001, and $15 per unit if the Company retires
the units by October 15, 2002. If the Company does not retire Equity's stock
appreciation units during the first three years after issuance, Equity may
exercise, during the fourth and fifth years after issuance, its right to receive
payment based upon the market value of the Company's common stock at such time.

After giving consideration to the Company's then current stock price and other
factors, the Company decided not to exercise its right to retire Equity's vested
stock appreciation units by October 15, 2000. Accordingly, the Company accrued
an additional $2 per vested unit, or $0.6 million, which was charged to other
financing costs on that date. On or before the next two anniversary dates of the
issuance of Equity's stock appreciation units, the Company will evaluate whether
to exercise its right to retire the units based on the Company's then current
stock price, its liquidity and other factors. It is currently the Company's
intent to retire Equity's stock appreciation units prior to October 15, 2002.


NOTE 9. STOCKHOLDERS' EQUITY

COMMON STOCK OFFERINGS
In the second quarter of 1999, the Company completed a public offering of an
additional 4,025,000 shares of common stock. The net proceeds to the Company,
after issuance costs, of $63.5 million were used for construction of the
initial Hawaii vessel.

On February 22, 2000, the Company completed an offering of an additional
2,000,000 shares of common stock. The net proceeds to the Company, after
issuance costs, were $46.7 million and are being used for the construction of
the second Hawaii vessel. The underwriters' overallotment option of 300,000
additional shares was not exercised.

RESTRICTED STOCK
In February 1999 the Company reserved and set aside 72,122 shares of restricted
common stock as compensation for a key salaried employee. Issuance and sale of
these shares is restricted prior to the employee's retirement from the Company.
Unearned compensation was recorded at the date of the restricted stock award
based on the market value of shares. Unearned compensation, which is shown as a
separate component of stockholders' equity, is being amortized to expense over a
four- year vesting period, which began in July 1999.

EMPLOYEE STOCK PURCHASE PLAN
The American Classic Voyages Co. 1995 Employee Stock Purchase Plan (the "ESP
Plan") allows eligible employees to purchase common stock of the Company,
through payroll deductions, at a discounted price from the market price. The
purchase price under the ESP Plan is deemed to be 85% of the lesser of (i) the
market value of the Company's common stock on the last business day of the
offering period or (ii) the greater of (a) the average market value during the
offering period and (b) the market value on the first business day of the
offering period. There is a maximum of 500,000 shares authorized under the ESP
Plan. There were 11,113, 9,749 and 11,622 shares issued during 2000, 1999 and
1998 respectively, at an average price of $14.86, $17.41 and $13.38 per share
for 2000, 1999 and 1998 respectively. At December 31, 2000, approximately
440,000 shares were available for offering under the ESP Plan.

STOCK-BASED COMPENSATION PLANS
The Company granted, as of January 1, 1992, fully vested options to the
Company's then senior executive officers, to purchase shares of common stock, in
lieu of bonus payments (the "Executive Stock Option Plan"). These options are
exercisable, in whole or in part, at any time prior to January 2, 2002, at an
exercise price of $3.25 per share.

The Company adopted the 1992 Stock Option Plan effective January 2, 1992 (the
"1992 Plan") and the 1999 Stock Option Plan effective June 24, 1999 (the "1999
Plan"). Pursuant to the 1992 and 1999 Plans, certain officers, directors, key
employees, and consultants will be offered the opportunity to acquire shares of
the Company's common stock via stock option grants. In addition, the 1992 Plan
provides for the granting of stock units. The exercise price of options granted
under the 1992 and 1999 Plans cannot be less than the fair market value of the
Company's common stock at the date of grant. As of December 31, 2000, 2,174,130
and 2,965,167 shares of the Company's common stock have been reserved for
issuance under the 1992 Plan and 1999 Plan respectively. Options granted under
the 1992 and 1999 Plans generally vest over a three-year period and expire 10
years from the date of grant. The per share weighted-average fair value of stock
options granted during

                                       37
<PAGE>   38

                          AMERICAN CLASSIC VOYAGES CO.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D.)

2000, 1999, and 1998 was $9.86, $9.21 and $7.86 respectively, on the date of
grant using the Black-Scholes option-pricing model with the following
weighted-average assumptions for 2000, 1999 and 1998 respectively: expected
volatility of 52%, 50% and 53%, risk-free interest rates of 6.2%, 6.3% and 4.6%,
expected lives of three years and dividend yield of 0% for all years.

In 2000, 1999 and 1998, under the terms of the 1992 Plan, the Company paid each
non-employee director stock units as an annual retainer. The stock units in
general vest at a rate of 25% on the first day of each calendar quarter. The
fully vested stock units will be converted into an equal number of common stock
shares at any time as selected by each director prior to each grant.

As permitted under SFAS No. 123, the Company continues to apply the provisions
of APB Opinion No. 25 for stock-based awards granted to employees. Accordingly,
no compensation cost has been recognized for stock option grants in the
financial statements. Had compensation cost for the Company's stock-based
compensation plans been recognized based on the fair value method prescribed
under SFAS No. 123, the Company's net income (loss) and earnings (loss) per
share would have been adjusted to the pro forma amounts indicated below (in
thousands, except per share amounts):

                                                    2000        1999      1998
                                               ---------------------------------
Net income (loss)                  As reported   $ (10,072)  $ (1,750)  $   157
                                   Pro forma       (11,706)    (4,396)   (2,487)

Basic earnings (loss) per share    As reported   $  (0.49)   $ (0.10)   $  0.01
                                   Pro forma        (0.57)     (0.26)     (0.18)

Diluted earnings (loss) per share  As reported   $  (0.49)   $ (0.10)   $  0.01
                                   Pro forma        (0.57)     (0.26)     (0.18)


The table below summarizes the activity for the Company's stock-based
compensation plans in 1998, 1999 and 2000:
<TABLE>
<CAPTION>
                                  Executive Stock
                                    Option Plan      1992 Plan      1992 Plan   1999 Plan    Weighted
                                 ----------------   ----------     -----------  ----------   Average
                                                      Shares        Shares       Shares      Exercise
                                 Shares Subject to  Subject to     Subject to   Subject to     Price
                                      Options         Options      Stock Units   Options    For Options
                                      -------         -------      -----------   -------    -----------
<S>                                  <C>             <C>            <C>          <C>          <C>
Balance at December 31, 1997          195,125        1,422,379       20,400        --         $ 10.74
      Granted......................        --        1,618,000       14,000        --           17.10
      Canceled.....................   (19,512)        (151,236)          --        --           13.44
      Exercised....................   (50,000)        (215,047)          --        --            9.29
      Converted....................        --               --       (7,000)       --              --
                                 ----------------   ------------   -----------  ----------

Balance at December 31, 1998          125,613        2,674,096       27,400        --           14.39
      Granted......................        --            7,500        9,100        999,650      20.69
      Canceled.....................        --          (48,673)          --        --           14.92
      Exercised....................   (86,000)        (238,526)          --        --            9.94
                                 ----------------   ------------   -----------  ----------

Balance at December 31, 1999           39,613        2,394,397       36,500       999,650       16.65
      Granted......................        --           55,000       18,150       117,900       23.91
      Canceled.....................        --         (153,683)          --       (35,934)      18.18
      Exercised....................   (15,000)        (290,542)          --       (34,833)      13.59
                                 ----------------   ------------   -----------  ----------
Balance at December 31, 2000           24,613        2,005,172       54,650     1,046,783     $ 17.30
                                 ================   ============   ===========  ===========   =======
</TABLE>

                                       38
<PAGE>   39

                          AMERICAN CLASSIC VOYAGES CO.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D.)

The following table summarizes information about options outstanding at December
31, 2000:

<TABLE>
<CAPTION>
                              Options Outstanding                     Options Exercisable
                 ----------------------------------------------   ---------------------------
                               Weighted-Average
                                  Remaining        Weighted-                     Weighted-
   Range of      Outstanding   Contractual Life     Average       Exercisable     Average
Exercise Price   at 12/31/00       in Years      Exercise Price   at 12/31/00  Exercise Price
--------------   -----------   ----------------  --------------   -----------  --------------
<S>              <C>                 <C>            <C>            <C>            <C>
    $3.25           24,613            1             $ 3.25            24,613      $ 3.25
  7.97 - 9.88      300,649            6               8.79           300,649        8.79
 10.25 - 15.00     210,750            5              11.82           210,750       11.82
 15.32 - 20.00   2,174,673            7              17.33         1,185,731       17.17
 21.13 - 33.14     365,883            9              28.21            85,500       28.96
                 ---------                                        -----------  --------------
$ 3.25 -$33.14   3,076,568            7             $17.30         1,807,243      $15.52
                 =========    =================   =============   ===========  ==============
</TABLE>


NOTE 10. INCOME TAXES

The provision (benefit) for income taxes consisted of (in thousands):

                                                   Years Ended December 31,
                                                  2000        1999       1998
                                             -----------------------------------
   Current tax provision (benefit):
       Federal.............................    $     --     $     --    $    --
       State...............................         435          150        213
                                             -----------------------------------
       Total current tax provision.........         435          150        213
                                             -----------------------------------
   Deferred tax provision (benefit):
       Federal.............................      (4,856)        (712)        89
       State...............................      (1,465)        (476)      (195)
                                             -----------------------------------
       Total deferred tax provision........      (6,321)      (1,188)      (106)
                                             -----------------------------------
       Total tax provision (benefit).......    $ (5,886)    $ (1,038)   $   107
                                             ===================================


The provision (benefit) for income taxes differs from amounts computed by
applying the U.S. statutory income tax rate. The differences are summarized as
follows (in thousands):

                                                    Years Ended December 31,
                                                    2000       1999       1998
                                                 -------------------------------
                                                     35%        35%        35%
                                                 -------------------------------
   Tax provision (benefit) at federal statutory
   rate........................................   $ (5,584)  $   (975)   $  93
   Effect of state income taxes (net of Federal
   benefit)....................................       (669)      (297)      12

   Non-deductible expenses.....................        367        234      221
   Other.......................................         --         --     (219)
                                                 -------------------------------
   Total tax provision (benefit)...............   $ (5,886)  $ (1,038)   $ 107
                                                 ===============================

                                       39
<PAGE>   40

                          AMERICAN CLASSIC VOYAGES CO.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D.)

The tax effects of temporary differences that gave rise to significant portions
of the deferred tax assets and deferred tax liabilities are presented below (in
thousands):

                                                             December 31,
  Deferred tax assets:                                  2000          1999
                                                     --------------------------
      Insurance costs and reserves.................   $    1,508    $   1,173
      Non-recurring executive compensation.........           84          135
      Benefit cost accruals........................          907          716
      Finance cost accruals........................        1,324        1,030
      Alternative minimum tax
        Credit carryforwards.......................        2,206        2,206
      Dry-dock accruals............................        1,745        1,995
      Net operating loss carryforward..............       47,985       36,823
      Goodwill, due to basis differences...........        2,717        3,075
                                                     --------------------------
      Total deferred tax assets....................       58,476       47,153
                                                     --------------------------
  Deferred tax liabilities:
      Capital construction fund....................          612          702
      Property plant and equipment, due to
      basis differences and depreciation, net......       38,120       34,005
                                                     --------------------------
      Total deferred tax liabilities...............       38,732       34,707
                                                     --------------------------
      Net deferred tax asset.......................   $   19,744    $  12,446
                                                     ==========================

At December 31, 2000, consolidated net operating losses of approximately $3.0
million, $10.0 million, $36.0 million, $14.0 million, $29.0 million, $5.0
million, $5.7 million and $23.4 million, expiring in 2008, 2009, 2010, 2011,
2012, 2018, 2019 and 2020 respectively, were available to offset future taxable
income of the Company. The 2000 net operating loss of $23.4 million includes
$2.7 million of deductions related to stock option exercises, the tax benefit of
which was recorded as additional paid in capital.

There is no valuation allowance for deferred tax assets as of December 31, 2000
and 1999. In assessing whether the deferred tax assets are realizable,
management considers whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized. The ultimate realization of
deferred tax assets is dependent upon the generation of future taxable income
during the periods in which the temporary differences become deductible.
Management considers, among other things, projected future taxable income, and
tax planning strategies in making this assessment. Based upon the level of
historical taxable income and projections for future taxable income over the
periods during which the temporary differences that gave rise to those deferred
tax assets are deductible, management believes it is more likely than not that
the Company will realize the benefits of these deductible differences. The
amount of the deferred tax asset considered realizable, however, could be
reduced in the near term if estimates of future taxable income during the
carryforward period are reduced.

In 1993, the Company established a capital construction fund (the "CCF")
pursuant to Section 607 of the Merchant Marine Act of 1936, into which it
deposited approximately $12.0 million. This fund was primarily used to pay
liabilities assumed in the acquisition of American Global Line (now American
Hawaiian Cruises) and allowed the Company to accelerate recognition of certain
deductions for qualified capital expenditures for income tax purposes. As a
result of the CCF, the Company has approximately a $2.2 million alternative
minimum tax credit carryforward available with no expiration date.

NOTE 11. RELATED PARTY TRANSACTIONS

As of December 31, 2000, the largest stockholders of the Company's common stock
were certain affiliates of EGI, including EGI Holdings, Inc. and EGIL
Investments, Inc., which owned an aggregate of 35.2% of the Company's common
stock. EGI and its affiliates provided certain administrative support services
for the Company, including but not limited to legal, accounting, tax, benefit
and insurance brokerage services. As previously mentioned in Note 8, the Company
leases office space from an affiliate of EGI. In the aggregate, the fees charged
by EGI and its affiliates for such services and rent were approximately $0.2
million, $0.4 million and $0.4 million for the years ended December 31, 2000,
1999 and 1998 respectively. At December 31, 2000 the Company had also accrued
$0.5 million in connection with the assistance of several

                                       40
<PAGE>   41

                          AMERICAN CLASSIC VOYAGES CO.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D.)

EGI employees with recent debt and equity financing transactions undertaken by
the Company. This amount was paid in the first quarter of 2001. In addition, as
previously mentioned in Note 8, the Company obtained financing guarantees from
EGI. Arrangements with EGI and its affiliates are subject to approval by a
majority of the non-affiliated members of the Company's Board of Directors.

In late 1997, the Company subleased approximately 13,000 square feet of Chicago
office space (the "sublease area") to Equity Office Properties Trust, an
affiliate of EGI. For the years ended December 31, 1998 and 1997, approximately
$78,000 and $23,000, respectively, was received by the Company under the
sublease. In mid-1998, the Company entered into an amended lease agreement
covering the Chicago office space whereby the subleased area was removed from
the lease. The Company was granted a $0.6 million reduction in future rent on
its remaining office space, representing the value of undepreciated leasehold
improvements of the sublease area.

The Company paid approximately $1.0 million, $0.6 million and $0.8 million
during 2000, 1999 and 1998 respectively, for legal services to Preston Gates
Ellis & Rouvelas Meeds ("Preston Gates"). Mr. Rouvelas, a Director of the
Company since 1998, is a partner of Preston Gates. The Company paid
approximately $0.3 million, $0.1 million and $0.1 million during 2000, 1999 and
1998 respectively, for legal services to Watanabe, Ing & Kawashima ("WIK"). Mr.
Watanabe, a Director of the Company since 1998, is a partner of WIK. The Company
paid approximately $13,000 and $0.2 million during 2000 and 1999 respectively
for recruiting fees to Heidrick & Struggles ("H&S"). Mr. Berry, a Director of
the Company since 1999, is a partner of H&S.


NOTE 12. EMPLOYEE BENEFIT PLANS

RETIREMENT PLANS
The Company's non-union employees are eligible to participate in the ADVANTAGE
Retirement Savings Plan (as amended and restated October 1, 1987, "ADVANTAGE
Plan"), a profit-sharing plan with a salary deferral feature that qualifies
under Section 401 of the Internal Revenue Code of 1986, as amended. The
ADVANTAGE Plan allows participants to defer a portion of their eligible
compensation on a pre-tax basis. Participant contributions are 100% vested at
the time the contribution is made. Matching contributions are made by the
Company in an amount equal to 100% of the amount of a participant's contribution
with a maximum of 4% of such participant's annual eligible wages, subject to
Internal Revenue Service maximums. In addition, the Company may make
discretionary profit-sharing contributions which are allocated to eligible
employees based on eligible compensation. Company contributions vest over a
five-year period. Matching and profit-sharing contributions approximated
$562,000, $845,000 and $497,000 for the years ended December 31, 2000, 1999 and
1998 respectively.

The Company also maintains a non-qualified deferred compensation plan (the
"Restoration Plan"), effective August 1, 1998. The purpose of the Restoration
Plan is to provide deferrals for eligible employees that may not be made to the
ADVANTAGE Plan because of certain restrictions and limitations in the Code.
Benefits will be paid from employee contributions. The Company's liability under
the Restoration Plan as of December 31, 2000 was $156,000.

The Company also contributes, under collective bargaining agreements, to funds
designed to provide pension and health benefits for its union employees. The
Company contributed approximately $3,059,000, $2,419,000 and $2,203,000 to such
plans for the years ended December 31, 2000, 1999 and 1998, respectively.


                                       41
<PAGE>   42

                          AMERICAN CLASSIC VOYAGES CO.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D.)


NOTE 13. UNAUDITED QUARTERLY RESULTS OF OPERATIONS

Summarized unaudited quarterly results of operations for 2000 and 1999 are as
follows:
<TABLE>
<CAPTION>

    Year Ended December 31, 2000                   March 31,  June 30,  September 30,  December 31,
    (In thousands, except per share data)            2000       2000        2000          2000
                                                -----------------------------------------------------
<S>                                                 <C>         <C>         <C>            <C>
         Revenues..............................   $ 38,960    $ 58,302    $ 62,456      $  61,907
         Gross profit..........................     10,725      22,868      23,853         20,562
         Operating (loss) income...............     (9,580)      2,045       1,614         (7,185)
         Pre-tax (loss) income.................    (10,119)      2,101       1,556         (9,496)
         Net (loss) income.....................     (6,380)      1,324         980         (5,996)
         Basic (loss) earnings per share.......      (0.33)       0.06        0.05          (0.28)
         Diluted (loss) earnings per share.....      (0.33)       0.06        0.05          (0.28)



    Year Ended December 31, 1999                   March 31,  June 30,  September 30,  December 31,
    (In thousands, except per share data)            1999       1999        1999          1999
                                                -----------------------------------------------------
         Revenues .............................   $  40,566   $ 55,200    $ 57,460      $ 55,491
         Gross profit..........................      11,798     21,506      21,692        19,858
         Operating (loss) income ..............      (9,222)     4,735       3,714         2,422
         Pre-tax (loss) income.................     (10,470)     4,124       3,479            79
         Net (loss) income.....................      (6,283)     2,475       2,091           (33)
         Basic (loss) earnings per share.......       (0.44)      0.14        0.11          0.00
         Diluted (loss) earnings per share.....       (0.44)      0.14        0.11          0.00
</TABLE>

The pre-tax (loss) income amounts in the first three quarters of 2000 reflect
the reclassification of accrued distributions on the trust preferred securities
and their related income tax benefit.

The sum of quarterly (loss) earnings per common share differs from full-year
amounts due to changes in the number of shares outstanding during the year.

On November 2, 1999 we announced that we had rescinded our prior adoption of the
American Institute of Certified Public Accountants Accounting Standards
Executive Committee's Statement of Position ("SOP") No. 93-7, "Reporting on
Advertising Costs,", relating to the deferral of direct response advertising
costs. The deferral method provided for in SOP 93-7 was adopted in 1999, and
made effective as of January 1, 1999. Under SOP 93-7, we deferred recognition of
direct response advertising costs related to direct response advertising efforts
for future cruises. These deferred costs were recognized in the periods that the
cruises promoted by the efforts were completed, and the related cruise revenue
recognized. We rescinded our adoption of SOP 93-7 due to difficulties we
encountered in implementing the new method. In rescinding SOP 93-7, we returned
to our prior method of recognizing expenses for direct response advertising
costs when those costs are incurred. As a result of the rescission of SOP 93-7,
we restated our earnings for the first quarter of 1999 to reflect a loss of $6.3
million, or ($0.44) per share, compared to our previously reported loss of $4.5
million, or ($0.32) per share. We also restated our earnings for the second
quarter of 1999 to $2.5 million, or $0.14 per share, compared to our previously
reported earnings of $2.4 million, or $0.13 per share. As previously disclosed,
the Securities and Exchange Commission has been conducting an informal
investigation into our adopting and then rescinding the AICPA's Statement of
Position 93-7 relating to the deferral of direct response advertising costs.
While the SEC has not brought any formal proceedings against us, it is possible
that the SEC's informal inquiry or a subsequent formal inquiry or proceeding
could result in orders, sanctions or penalties against us. We cannot predict at
this time whether any such sanctions would have a material impact.


NOTE 14. HEADQUARTERS RELOCATION (UNAUDITED)

In September 2000 the Company announced its intention to relocate its corporate
and operational headquarters, from Chicago, IL and New Orleans, LA respectively,
to a new leased facility in Sunrise, FL. In connection with the move, the
Company will receive economic incentives from the State of Florida, Broward
County and the City of Sunrise of up to $4.2 million once

                                       42

<PAGE>   43

                          AMERICAN CLASSIC VOYAGES CO.
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D.)

certain conditions are met. Construction of the new facility is expected to be
completed in November 2001 and the relocation is expected to be largely complete
by early 2002. The Company has offered to relocate most employees to the
new location but the number of employees intending to relocate is largely
undetermined as of December 31, 2000.

The Company will incur severance and retention costs pertaining to those
employees choosing not to relocate. The total amount of severance and retention
costs is not expected to exceed $4.0 million. These costs will be expensed as
certain criteria are met. As of December 31, 2000 the Company has recognized
$0.6 million in severance expenses for employees who have communicated to the
Company in writing their intention not to relocate. The Company also expects to
incur employee relocation costs in the range of $0.5 million to $1.0 million,
and additional relocation expenses to move equipment and furniture, which is
expected to cost up to $0.5 million. These costs will also be expensed as
certain conditions are met. As of December 31, 2000 the Company has not
recognized any expense for relocation of employees or Company assets. The
Company may also incur lease termination expenses or a write-off of leasehold
improvements if it elects to vacate its Chicago or New Orleans facilities. At
this time the Company has not determined whether it will completely vacate these
facilities and therefore is unable to determine the potential costs, if any, it
will incur in connection with terminating the leases or writing off the
leasehold improvements.

The economic incentives to be received by the Company include tax refunds
beginning in 2002 under Florida's Qualified Target Industry Tax (QTI) Refund
Program, state job training funds and certain cash grants approved by the local
municipalities. These benefits will be recognized as they are earned.


NOTE 15. SUBSEQUENT EVENTS (UNAUDITED)

On January 31, 2001 the Company issued an additional $50 million of notes
guaranteed by MARAD bearing interest at LIBOR minus 0.10%. Interest is payable
quarterly and the principal amount is due on January 31, 2002. A portion of the
proceeds from this issuance was used to pay down the $25 million note due
January 31, 2001.

On February 20, 2001 the ms Patriot was required to cancel a cruise that was in
progress and return to its home port so that a thrust bearing in the vessel's
generator drive train could be replaced. This resulted in refunds issued to
passengers of approximately $1.6 million, and travel credits for a future cruise
expected to cost approximately $0.5 million. No other cruises were cancelled as
a result of the repair. The S.S. Independence will undergo an unscheduled
dry-dock beginning March 24, 2001 to repair its bow thruster. The vessel is
expected to be out of service for a period of seven days, and the expected cost
of the repairs is expected to be between $0.4 million and $0.5 million.

                                       43

<PAGE>   44

                                                                     Schedule I

                          AMERICAN CLASSIC VOYAGES CO.
         CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)
                                 BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                             December 31,
                                                                         2000           1999
                                                                     --------------------------
<S>                                                                    <C>          <C>
ASSETS
Cash and cash equivalents............................................  $   29,910   $   30,153
Marketable Securities................................................       7,843           --
Prepaid expenses and other current assets............................         580          339
Property and equipment, net..........................................         640          906
Other assets.........................................................       3,879          493
Investment in and advances to subsidiaries...........................     232,823      100,609
                                                                     --------------------------
                                                                       $  275,675   $  132,500
                                                                     --------------------------

LIABILITIES
Other liabilities....................................................  $    2,172   $    2,700
                                                                     ==========================

Convertible preferred
     securities of subsidiary trust holding solely 7% convertible
     subordinated debentures of the Company..........................   $ 100,000   $       --
                                                                     --------------------------

STOCKHOLDERS' EQUITY
Common stock.........................................................         210          187
Additional paid-in capital...........................................     204,555      151,094
Retained earnings (deficit)..........................................     (29,645)     (19,573)
Other................................................................      (1,617)      (1,908)
                                                                     --------------------------
Total stockholders' equity...........................................     173,503      129,800
                                                                     --------------------------
                                                                       $  275,675   $  132,500
                                                                     ==========================
</TABLE>

           See accompanying notes to Condensed Financial Information.


                                       44
<PAGE>   45


                                                                      Schedule I


                          AMERICAN CLASSIC VOYAGES CO.
  CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY) - (CONTINUED)
                            STATEMENTS OF OPERATIONS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                           Years Ended December 31,
                                                         2000        1999       1998
                                                     -----------------------------------
<S>                                                   <C>          <C>       <C>
Miscellaneous expense (revenues)....................  $  (3,238)   $ (1,711)  $  1,700

Depreciation expense................................        279         608        880

Accrued distributions on convertible preferred
securities and related financing costs .............      6,247          --         --

Income tax (benefit) expense........................       (921)        435     (1,068)

Equity in earnings (losses) of subsidiaries.........     (7,705)     (2,418)     1,669
                                                     -----------------------------------

Net income (loss)...................................  $ (10,072)   $ (1,750)  $    157
                                                     -----------------------------------
</TABLE>

           See accompanying notes to Condensed Financial Information.


                                       45
<PAGE>   46

                                                                      Schedule I

                          AMERICAN CLASSIC VOYAGES CO.
  CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY) - (CONTINUED)
                            STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                   Years Ended December 31,
                                                                2000         1999        1998
                                                             ------------------------------------
<S>                                                          <C>          <C>          <C>
OPERATING ACTIVITIES
Net income (loss)                                            $ (10,072)   $  (1,750)   $     157

ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET CASH
(USED IN) PROVIDED BY OPERATING ACTIVITIES
   Depreciation                                                    279          608          880
   Equity in (earnings) losses of subsidiaries, net              7,705        2,418       (1,669)
   Increase in advances to subsidiaries                       (139,919)     (40,961)        (570)
   (Increase) decrease in prepaid expenses and other            (1,407)         145         (514)
   (Decrease) increase in other liabilities                      1,191          678       (1,326)
                                                             ------------------------------------
   Net cash used in operating activities                      (142,223)     (38,862)      (3,042)
                                                             ------------------------------------

INVESTING ACTIVITIES
Purchase of marketable securities                               (7,843)          --           --
Capital expenditures                                               (13)        (140)      (1,421)
                                                             ------------------------------------
Net cash used in investing activities                           (7,856)        (140)      (1,421)
                                                             ------------------------------------

FINANCING ACTIVITIES
Issuance of common stock                                        53,629       68,697        2,907
Issuance of convertible preferred securities of subsidiary
trust                                                          100,000           --           --
Purchase of common stock                                            --           --         (757)
Deferred financing fees                                         (3,793)          --         (533)
                                                             ------------------------------------
Net cash provided by financing activities                      149,836       68,697        1,617
                                                             ------------------------------------

Increase (decrease) in cash and cash equivalents                  (243)      29,695       (2,846)
Cash and cash equivalents, beginning of period                  30,153          458        3,304
                                                             ------------------------------------
Cash and cash equivalents, end of period                     $  29,910    $  30,153    $     458
                                                            =====================================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Non-cash investing activities:
     Cash paid for taxes                                     $      --    $     165    $      --

</TABLE>

                                       46

<PAGE>   47




                                                                      Schedule I
                          AMERICAN CLASSIC VOYAGES CO.
             NOTES TO CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                         (PARENT COMPANY) - (CONTINUED)


BASIS OF PRESENTATION

The Condensed Financial Information of American Classic Voyages Co. ("AMCV") has
been prepared pursuant to Securities and Exchange Commission ("SEC") rules and
regulations and should be read in conjunction with the Consolidated Financial
Statements and Notes thereto for the years ended December 31, 2000, 1999 and
1998 included herein this Form 10-K. The balance sheets as of December 31, 2000
and 1999 and the related statements of operations and cash flows have been
prepared on an unconsolidated basis. AMCV's investment in its subsidiaries is
recorded on the equity basis. Certain previously reported amounts have been
reclassified to conform to the 2000 presentation.

DIVIDENDS FROM SUBSIDIARIES

No dividends were paid to AMCV for the years ended December 31, 2000, 1999 and
1998.

INCOME TAXES

AMCV has entered into tax sharing agreements with its subsidiaries which require
each subsidiary to compute its Federal income tax liability on a separate
company basis and to pay amounts so computed to AMCV. No payments were made
under the tax sharing agreement for the years ended December 31, 2000, 1999 and
1998.














                                       47
<PAGE>   48

                                                                     Schedule II

                          AMERICAN CLASSIC VOYAGES CO.

                     SCHEDULE II - VALUATION AND QUALIFYING
              ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 2000, 1999
                             AND 1998 (IN THOUSANDS)


<TABLE>
<CAPTION>

                                Balance at    Charged to    Charged to
  Accrual for Dry-dock and     Beginning of     costs         other                   Balance at
    Lay-up Expenses               Year       and Expenses    Accounts    Deductions   End of Year
-------------------------------------------------------------------------------------------------
<S>                               <C>           <C>          <C>            <C>          <C>
Year ended December 31, 2000      5,117         3,978                       5,063        4,022
Year ended December 31, 1999      2,419         4,187                       1,489        5,117
Year ended December 31, 1998      2,144         2,111                       1,836        2,419

</TABLE>













                                       48
<PAGE>   49

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

None.


                                    PART III


ITEMS 10, 11, 12 AND 13 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT,
                        EXECUTIVE COMPENSATION, SECURITY OWNERSHIP OF CERTAIN
                        BENEFICIAL OWNERS AND MANAGEMENT AND CERTAIN
                        RELATIONSHIPS AND RELATED TRANSACTIONS

We will file a definitive proxy statement with the Securities and Exchange
Commission, pursuant to Regulation 14A under the Securities Exchange Act of 1934
(the "Proxy Statement") and relating to the Company's Annual Meeting of
Stockholders to be held on June 27, 2001, not later than April 30, 2001.
Information required by Items 10 through 13 will appear in the Proxy Statement
and is incorporated herein by reference.


                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)(1)    Financial Statements.

          The consolidated financial statements of the Company are set forth
          in the "Index to Consolidated Financial Statements" on page 24.

(a)(2)    Financial Statement Schedules.

          Financial Statement Schedules, except those indicated in the "Index
          to Consolidated Financial Statements" on page 24, have been omitted
          because they are not applicable, not required under the instructions,
          or all the information required is set forth in the financial
          statements or the notes to the financial statements.

(a)(3)    Exhibits are as set forth in the "Index to Exhibits" on page 51.

(b)       Reports on Form 8-K:

          None.









                                       49
<PAGE>   50



                                   SIGNATURES


Pursuant to the requirements of Section 13 and 15(d) of the Securities and
Exchange Act of 1934, as amended, the Registrant has duly caused this Report to
be signed on its behalf by the undersigned, thereunto duly authorized.

Date    March 29, 2001
        --------------

                                  AMERICAN CLASSIC VOYAGES CO.

                                  By  / s /  Philip C. Calian
                                      --------------------------------------
                                      Philip C. Calian
                                      Chief Executive Officer

Pursuant to the requirements of the Securities and Exchange Act of 1934, as
amended, has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

/s/ Samuel Zell                  Chairman of the Board
-----------------------------
Samuel Zell

/s/ Philip C. Calian             Chief Executive Officer and Director
------------------------------   (Principal Executive Officer)
Philip C. Calian

/s/ Randall L. Talcott           Vice President-Finance and Treasurer
------------------------------   (Principal Financial and Accounting Officer)
Randall L. Talcott

/s/ John R. Berry                Director
------------------------------
John R. Berry

/s/ Bradbury Dyer, III           Director
Bradbury Dyer, III

/s/ Laurence S. Geller           Director
------------------------------
Laurence S. Geller

/s/ Terence C. Golden            Director
------------------------------
Terence C. Golden

/s/ Arthur A. Greenberg          Director
------------------------------
Arthur A. Greenberg

/s/ Jerry R. Jacob               Director
------------------------------
Jerry R. Jacob

/s/ Emanuel L. Rouvelas          Director
------------------------------
Emanuel L. Rouvelas

/s/ Mark Slezak                  Director
------------------------------
Mark Slezak

/s/ Jeffrey N. Watanabe          Director
------------------------------
Jeffrey N. Watanabe

                                       50
<PAGE>   51

                          AMERICAN CLASSIC VOYAGES CO.
                                INDEX TO EXHIBITS

EXHIBIT NUMBER                        DESCRIPTION
--------------                        -----------

**3.(i)             Second Amended and Restated Certificate of Incorporation of
                    the Company (filed on March 31, 1999 as Exhibit 3.(i) to the
                    Company's Form 10-K dated December 31, 1998 and incorporated
                    herein by reference).

**3.(ii)            Third Amended and Restated By-Laws of the Company (filed on
                    November 15, 1999 as Exhibit 3.(ii) to the Company's Form
                    10-Q dated September 30, 1999 and incorporated herein by
                    reference).

**3.(iii)           Certificate of Amendment to Second Amendment and Restated
                    Certificate of Incorporation of the Company (filed on August
                    14, 2000 as Exhibit 3.(iii) to the Company's Report on Form
                    10-Q) and incorporated herein by reference).

**4.(i)             Proof of Common Stock Certificate (filed on February 14,
                    1992 as Exhibit 4.(i) to Amendment No. 2 to the Company's
                    Registration Statement on Form S-1 (Registration No.
                    33-45139) and incorporated herein by reference).

**4.(ii)(a)(1)      Credit Agreement, dated as of February 25, 1999, among the
                    Delta Queen Steamboat Co. (the "Borrower"), the financial
                    institutions from time to time parties thereto as Lenders
                    (the "Lenders"), The Chase Manhattan Bank, as Issuing Bank
                    and as Administrative Agent thereunder (the "Agent"), and
                    Hibernia National Bank, as Documentation Agent (filed on
                    March 31, 1999 as Exhibit 4.(ii)(a)(1) to the Company's Form
                    10-K dated December 31, 1998 and incorporated herein by
                    reference).

**4.(ii)(a)(2)      Security Agreement, dated as of February 25, 1999, executed
                    by the Borrower in favor of the Agent for the benefit of the
                    Agent and the Lenders (filed on March 31, 1999 as Exhibit
                    4.(ii)(a)(2) to the Company's Form 10-K dated December 31,
                    1998 and incorporated herein by reference).

                    The following entities also have entered into a similar
                    security agreement with the Agent:

                    (i)    DQSB II, Inc.;
                    (ii)   Great Ocean Cruise Line, L.L.C.;
                    (iii)  Cruise America Travel, Incorporated;
                    (iv)   Great River Cruise Line, L.L.C.; and
                    (v)    DQSC Property Co.

**4.(ii)(a)(3)      Stock Pledge Agreement, dated as of February 25, 1999,
                    executed by the Borrower in favor of the Agent, evidencing
                    the pledge by the Borrower of all of its 100% interest in
                    the capital stock of each of Cruise America Travel,
                    Incorporated, DQSC Property Co. and DQSB II, Inc. (filed on
                    March 31, 1999 as Exhibit 4.(ii)(a)(3) to the Company's Form
                    10-K dated December 31, 1998 and incorporated herein by
                    reference).

**4.(ii)(a)(4)      Limited Liability Company Pledge Agreement, dated as of
                    February 25, 1999, executed by the Borrower in favor of the
                    Agent evidencing the pledge by the Borrower of its 99%
                    membership interest in each of Great River Cruise Line,
                    L.L.C. and Great Ocean Cruise Line, L.L.C. (filed on March
                    31, 1999 as Exhibit 4.(ii)(a)(4) to the Company's Form 10-K
                    dated December 31, 1998 and incorporated herein by
                    reference).

**4.(ii)(a)(5)      Guaranty executed by Cruise America Travel, Incorporated,
                    DQSC Property Co., DQSB II, Inc., Great Ocean Cruise Line,
                    L.L.C. and Great River Cruise Line, L.L.C. in favor of the
                    Agent evidencing the guarantees of the obligations of the
                    Borrower (filed on March 31, 1999 as Exhibit 4.(ii)(a)(5) to
                    the Company's Form 10-K dated December 31, 1998 and
                    incorporated herein by reference).

                                       51

<PAGE>   52

                          AMERICAN CLASSIC VOYAGES CO.
                           INDEX TO EXHIBITS (CONT'D.)

EXHIBIT NUMBER                        DESCRIPTION
--------------                        -----------

**4.(ii)(a)(6)      Trust Indenture among the Agent, the Lenders, Great River
                    Cruise Line, L.L.C. and The Chase Manhattan Bank as trustee
                    (the "DQ Trustee") covering the Delta Queen (a substantially
                    identical Trust Indenture covering the Mississippi Queen has
                    also been executed) (filed on March 31, 1999 as Exhibit
                    4.(ii)(a)(6) to the Company's Form 10-K dated December 31,
                    1998 and incorporated herein by reference).

**4.(ii)(a)(7)      Preferred Ship Mortgage covering the Delta Queen executed by
                    Great River Cruise Line, L.L.C. in favor of the DQ Trustee
                    for the benefit of the Agent and the Lenders (a
                    substantially identical Preferred Ship Mortgage covering the
                    Mississippi Queen has also been executed) (filed on March
                    31, 1999 as Exhibit 4.(ii)(a)(7) to the Company's Form 10-K
                    dated December 31, 1998 and incorporated herein by
                    reference).

**4.(ii)(a)(8)      Amended and Restated Credit Agreement dated as of September
                    14, 2000 among The Delta Queen Steamboat Co. ("Borrower"),
                    the financial institutions listed on the signature pages as
                    Lenders and each other financial institution which from time
                    to time becomes a party thereto ("Lenders"), The Chase
                    Manhattan Bank, as Issuing Bank and as Administrative Agent
                    for the Lenders thereunder (in such latter capacity, the
                    "Agent"), and Hibernia National Bank, as Documentation
                    Agent. (filed on November 14, 2000 as Exhibit 4.(ii)(a)(8)
                    to the Company's Report on Form 10-Q and incorporated herein
                    by reference).

**4.(ii)(a)(9)      Guaranty dated September 14, 2000 executed by American
                    Classic Voyages Co. in favor of the Agent. (filed on
                    November 14, 2000 as Exhibit 4.(ii)(a)(9) to the Company's
                    Report on Form 10-Q and incorporated herein by reference).

**4.(ii)(a)(10)     Amended and Restated Contribution Agreement dated September
                    14, 2000 executed by the Parent Guarantor and each Borrower
                    Subsidiary that is a party to a Subsidiary Guaranty. (filed
                    on November 14, 2000 as Exhibit 4.(ii)(a)(10) to the
                    Company's Report on Form 10-Q and incorporated herein by
                    reference).

**4.(ii)(a)(11)     First Amendment to Trust Indenture dated September 14, 2000
                    among the Agent, the Lenders, Great River Cruise Line,
                    L.L.C. and The Chase Manhattan Bank, as Trustee covering the
                    Delta Queen (a substantially identical First Amendment to
                    Preferred Ship Mortgage covering the Mississippi Queen and
                    Columbia Queen has also been executed). (filed on November
                    14, 2000 as Exhibit 4.(ii)(a)(11) to the Company's Report on
                    Form 10-Q and incorporated herein by reference).

**4.(ii)(a)(12)     First Amendment to Preferred Ship Mortgage dated September
                    14, 2000 executed by Great River Cruise Line, L.L.C. for the
                    benefit of The Chase Manhattan Bank, as Trustee covering the
                    Delta Queen (a substantially identical First Amendment to
                    Preferred Ship Mortgage covering the Mississippi Queen and
                    Columbia Queen has also been executed). (filed on November
                    14, 2000 as Exhibit 4.(ii)(a)(12) to the Company's Report on
                    Form 10-Q and incorporated herein by reference).

**4.(ii)(b)(1)      Commitment to Guaranty Obligations by the United States of
                    America accepted by Great AQ Steamboat Co. dated as of
                    August 24, 1995 (filed on November 14, 1995 as Exhibit
                    4.(ii)(c)(1) to the Company's Form 10-Q dated September 30,
                    1995 and incorporated herein by reference).

**4.(ii)(b)(2)      Great AQ Steamboat Co. United States Government Guaranteed
                    Ship Financing Obligations, American Queen Series Purchase
                    Agreement dated August 24, 1995 (filed on November 14, 1995
                    as Exhibit 4.(ii)(c)(2) to the Company's Form 10-Q dated
                    September 30, 1995 and incorporated herein by reference).

**4.(ii)(b)(3)      Trust Indenture relating to United States Government
                    Guaranteed Ship Financing Obligations, American Queen
                    Series, between Great AQ Steamboat Co. and the Bank of New
                    York, dated as of August 24, 1995 (the "Trust Indenture")
                    along with Schedule A and Exhibit 1 (filed on November 14,
                    1995 as Exhibit 4.(ii)(c)(3) to the Company's Form 10-Q
                    dated September 30, 1995 and incorporated herein by
                    reference).

                                       52
<PAGE>   53

                          AMERICAN CLASSIC VOYAGES CO.
                           INDEX TO EXHIBITS (CONT'D.)

EXHIBIT NUMBER                        DESCRIPTION
--------------                        -----------

**4.(ii)(b)(4)      Form of 2005 Note, Guarantee and Trustee's Authentication
                    Certificate Specimen Note as it relates to the United States
                    Government Guaranteed Ship Financing Obligation, American
                    Queen Series (filed on November 14, 1995 as Exhibit
                    4.(ii)(c)(4) to the Company's Form 10-Q dated September 30,
                    1995 and incorporated herein by reference).

**4.(ii)(b)(5)      Form of 2020 Bond, Guarantee and Trustee's Authentication
                    Certificate Specimen Bond as it relates to United States
                    Government Guaranteed Ship Financing Bond, American Queen
                    Series (filed on November 14, 1995 as Exhibit 4.(ii)(c)(5)
                    to the Company's Form 10-Q dated September 30, 1995 and
                    incorporated herein by reference).

**4.(ii)(b)(6)      Authorization Agreement between the United States of America
                    as represented by the Secretary of Transportation and the
                    Bank of New York as Indenture Trustee under the Trust
                    Indenture between it and Great AQ Steamboat Co. dated as of
                    August 24, 1995 (filed on November 14, 1995 as Exhibit
                    4.(ii)(c)(6) to the Company's Form 10-Q dated September 30,
                    1995 and incorporated herein by reference).

**4.(ii)(b)(7)      Security Agreement relating to the United States Government
                    Guaranteed Ship Financing Obligation between Great AQ
                    Steamboat Co. and the United States of America dated as of
                    August 24, 1995 (the "Security Agreement") along with
                    Exhibit 1 and the Schedule of Definitions (filed on November
                    14, 1995 as Exhibit 4.(ii)(c)(7) to the Company's Form 10-Q
                    dated September 30, 1995 and incorporated herein by
                    reference).

**4.(ii)(b)(8)      $60,589,000 Promissory Note dated August 24, 1995 by and
                    between Great AQ Steamboat Co. and the United States of
                    America (filed on November 14, 1995 as Exhibit 4.(ii)(c)(8)
                    to the Company's Form 10-Q dated September 30, 1995 and
                    incorporated herein by reference).

**4.(ii)(b)(9)      Title XI Reserve Fund and Financial Agreement among Great AQ
                    Steamboat Co. and the United States of America dated as of
                    August 24, 1995 along with the General Provisions (filed on
                    November 14, 1995 as Exhibit 4.(ii)(c)(9) to the Company's
                    Form 10-Q dated September 30, 1995 and incorporated herein
                    by reference).

**4.(ii)(b)(10)     Guaranty Agreement dated August 24, 1995 made by the Delta
                    Queen Steamboat Co. in favor of the United States of America
                    (filed on November 14, 1995 as Exhibit 4.(ii)(c)(10) to the
                    Company's Form 10-Q dated September 30, 1995 and
                    incorporated herein by reference).

**4.(ii)(b)(11)     Assumption and Supplement No. 1 to First Preferred Ship
                    Mortgage effective as of December 31, 1996 made by and among
                    Great AQ Steamboat, L.L.C., Great AQ Steamboat Co. and the
                    United States of America, represented by the Secretary of
                    Transportation, acting by and through the Maritime
                    Administrator (filed on May 13, 1997 as Exhibit
                    4.(ii)(c)(11) to the Company's Form 10-Q dated March 31,
                    1997 and incorporated herein by reference).

**4.(ii)(b)(12)     Modification and Assumption Agreement entered into March 25,
                    1997, effective as of December 31, 1996, among The United
                    States of America, represented by the Secretary of
                    Transportation, acting by and through the Maritime
                    Administrator, Great AQ Steamboat, L.L.C., and The Bank of
                    New York (filed on May 13, 1997 as Exhibit 4.(ii)(c)(12) to
                    the Company's Form 10-Q dated March 31, 1997 and
                    incorporated herein by reference).

**4.(ii)(b)(13)     Confirmation of Guaranty Agreement effective as of December
                    31, 1996 made by The Delta Queen Steamboat Co. in favor of
                    the United States of America, represented by the Secretary
                    of Transportation, acting by and through the Maritime
                    Administrator (filed on May 13, 1997 as Exhibit
                    4.(ii)(c)(13) to the Company's Form 10-Q dated March 31,
                    1997 and incorporated herein by reference).

                                       53
<PAGE>   54


                          AMERICAN CLASSIC VOYAGES CO.
                           INDEX TO EXHIBITS (CONT'D.)

EXHIBIT NUMBER                        DESCRIPTION
--------------                        -----------

**4.(ii)(b)(14)     Endorsement No. 1 to Secretary's Note Form Great AQ
                    Steamboat, L.L.C. to the United States of America executed
                    on March 25, 1997, effective as of December 31, 1996 (filed
                    on May 13, 1997 as Exhibit 4.(ii)(c)(14) to the Company's
                    Form 10-Q dated March 31, 1997 and incorporated herein by
                    reference).

**4.(ii)(b)(15)     Subordination Agreement dated as of March 25, 1997 made by
                    and among Great AQ Steamboat, L.L.C., The Delta Queen
                    Steamboat Co. and DQSB II, Inc. and the United States of
                    America, represented by the Secretary of Transportation,
                    acting by and through the Maritime Administrator (filed on
                    May 13, 1997 as Exhibit 4.(ii)(c)(15) to the Company's Form
                    10-Q dated March 31, 1997 and incorporated herein by
                    reference).

**4.(ii)(c)(1)      Commitment to Guaranty Obligations by the United States of
                    America Accepted by Great Independence Ship Co. dated as of
                    December 7, 1995 (filed on April 1, 1996 as Exhibit
                    4.(ii)(d)(1) to the Company's Form 10-K dated December 31,
                    1995).

**4.(ii)(c)(2)      Great Independence Ship Co. United States Government
                    Guaranteed Ship Financing Obligations, Independence Series A
                    Purchase Agreement dated December 7, 1995 (filed on April 1,
                    1996 as Exhibit 4.(ii)(d)(2) to the Company's Form 10-K
                    dated December 31, 1995).

**4.(ii)(c)(3)      Trust Indenture relating to United States Government
                    Guaranteed Ship Financing Obligations, Independence Series
                    A, between Great Independence Ship Co. and the Bank of New
                    York, dated as of December 7, 1995 (the "Trust Indenture")
                    along with Schedule A and Exhibit 1 (filed on April 1, 1996
                    as Exhibit 4.(ii)(d)(3) to the Company's Form 10-K dated
                    December 31, 1995).

**4.(ii)(c)(4)      Forms of 2005 Note, Guarantee and Trustee's Authentication
                    Certificate Specimen Note as it relates to the United States
                    Government Guaranteed Ship Financing Obligation,
                    Independence Series A (filed on April 1, 1996 as Exhibit
                    4.(ii)(d)(4) to the Company's Form 10-K dated December 31,
                    1995).

**4.(ii)(c)(5)      Forms of 2015 Bond, Guarantee and Trustee's Authentication
                    Certificate Specimen Bond as it relates to United States
                    Government Guaranteed Ship Financing Bond, Independence
                    Series A (filed on April 1, 1996 as Exhibit 4.(ii)(d)(5) to
                    the Company's Form 10-K dated December 31, 1995).

**4.(ii)(c)(6)      Authorization Agreement between the United States of America
                    represented by the Secretary of Transportation and the Bank
                    of New York as Indenture Trustee under the Trust Indenture
                    between it and Great Independence Ship Co. dated as of
                    December 7, 1995 (filed on April 1, 1996 as Exhibit
                    4.(ii)(d)(6) to the Company's Form 10-K dated December 31,
                    1995).

**4.(ii)(c)(7)      Security Agreement relating to the United States Government
                    Guaranteed Ship Financing Obligation between Great
                    Independence Ship Co. and the United States of America dated
                    as of December 7, 1995 (the "Security Agreement") along with
                    Exhibit 1 and the Schedule of Definitions (filed on April 1,
                    1996 as Exhibit 4.(ii)(d)(7) to the Company's Form 10-K
                    dated December 31, 1995).

**4.(ii)(c)(8)      $26,429,000 Promissory Note dated December 7, 1995 by and
                    between Great Independence Ship Co. and the United States of
                    America (filed on April 1, 1996 as Exhibit 4.(ii)(d)(8) to
                    the Company's Form 10-K dated December 31, 1995).

**4.(ii)(c)(9)      Title XI Reserve Fund and Financial Agreement between Great
                    Independence Ship Co. and the United States of America dated
                    as of December 7, 1995 along with the General Provisions
                    (filed on April 1, 1996 as Exhibit 4.(ii)(d)(9) to the
                    Company's Form 10-K dated December 31, 1995).


                                       54
<PAGE>   55

                          AMERICAN CLASSIC VOYAGES CO.
                           INDEX TO EXHIBITS (CONT'D.)

EXHIBIT NUMBER                        DESCRIPTION
--------------                        -----------

**4.(ii)(c)(10)     Guaranty and Security Agreement dated December 7, 1995 made
                    by the Great Independence Ship Co., Great Hawaiian Cruise
                    Line, Inc. and Great Hawaiian Properties Corporation in
                    favor of the United States of America (filed on April 1,
                    1996 as Exhibit 4.(ii)(d)(10) to the Company's Form 10-K
                    dated December 31, 1995).

**4.(ii)(c)(11)     Amendment to Commitment to Guarantee Obligations by the
                    United States of America Accepted by Great Independence Ship
                    Co. dated as of March 28, 1996 (filed on May 15, 1996 as
                    Exhibit 4.(ii)(d)(11) to the Company's Form 10-Q dated March
                    31, 1996).

**4.(ii)(c)(12)     Great Independence Ship Co. United Stated Government
                    Guaranteed Ship Financing Obligations, Independence Series B
                    Purchase Agreement dated March 28, 1996 (filed on May 15,
                    1996 as Exhibit 4.(ii)(d)(12) to the Company's Form 10-Q
                    dated March 31, 1996).

**4.(ii)(c)(13)     Supplemental Indenture No. 1 relating to United States
                    Government Guaranteed Ship Financing Obligations,
                    Independence Series B, between Great Independence Ship Co.
                    and the Bank of New York, dated as of March 28, 1996 (filed
                    on May 15, 1996 as Exhibit 4.(ii)(d)(13) to the Company's
                    Form 10-Q dated March 31, 1996).

**4.(ii)(c)(14)     Form of 2005 Note, Guarantee and Trustee's Authentication
                    Certificate Specimen Note as it relates to the United States
                    Government Guaranteed Ship Financing Obligation,
                    Independence Series B (filed on May 15, 1996 as Exhibit
                    4.(ii)(d)(14) to the Company's Form 10-Q dated March 31,
                    1996).

**4.(ii)(c)(15)     Form of 2015 Bond, Guarantee and Trustee's Authentication
                    Certificate Specimen Bond as it relates to United States
                    Government Guaranteed Ship Financing Bond, Independence
                    Series B (filed on May 15, 1996 as Exhibit 4.(ii)(d)(15) to
                    the Company's Form 10-Q dated March 31, 1996).

**4.(ii)(c)(16)     Amendment No. 1 to Authorization Agreement between the
                    United States of America represented by the Secretary of
                    Transportation and the Bank of New York as Indenture Trustee
                    under the Trust Indenture between it and Great Independence
                    Ship Co. dated as of March 28, 1996 (filed on May 15, 1996
                    as Exhibit 4.(ii)(d)(16) to the Company's Form 10-Q dated
                    March 31, 1996).

**4.(ii)(c)(17)     Amendment No. 1 to Security Agreement relating to the United
                    States Government Guaranteed Ship Financing Obligation
                    between Great Independence Ship Co. and the United States of
                    America dated as of March 28, 1996 (the "Security
                    Agreement") (filed on May 15, 1996 as Exhibit 4.(ii)(d)(17)
                    to the Company's Form 10-Q dated March 31, 1996).

**4.(ii)(c)(18)     Endorsement to $6,903,000 Promissory Note dated March 28,
                    1996 by and between Great Independence Ship Co. and the
                    United States of America (filed on May 15, 1996 as Exhibit
                    4.(ii)(d)(18) to the Company's Form 10-Q dated March 31,
                    1996).

**4.(ii)(c)(19)     Amendment No. 1 to Title XI Reserve Fund and Financial
                    Agreement between Great AQ Steamboat Co. and the United
                    States of America effective as of January 1, 1996 (filed on
                    August 14, 1996 as Exhibit 4.(ii)(d)(19) to the Company's
                    Form 10-Q dated June 30, 1996).

**4.(ii)(d)(1)      Commitment to Guarantee Obligations dated February 10, 2000
                    by The United States of America, represented by the
                    Secretary of Transportation, acting by and through the
                    Maritime Administrator, and accepted by Project America Ship
                    I, Inc., the Shipowner. (filed on August 14, 2000 as Exhibit
                    4.(ii)(d)(1) to the Company's Report on Form 10-Q and
                    incorporated herein by reference).

**4.(ii(d)(2)       Note Purchase Agreement dated February 10, 2000 as it
                    relates to United States Government Guaranteed Ship
                    Financing Notes - Variable Rate Notes due January 31, 2001
                    signed by Project America, Inc., and accepted by Chase
                    Securities, Inc. (filed on August 14, 2000 as Exhibit
                    4.(ii)(d)(2) to the Company's Report on Form 10-Q and
                    incorporated herein by reference).

                                       55

<PAGE>   56

                          AMERICAN CLASSIC VOYAGES CO.
                           INDEX TO EXHIBITS (CONT'D.)

EXHIBIT NUMBER                        DESCRIPTION
--------------                        -----------

**4.(ii)(d)(3)      Trust Indenture Relating to United States Government
                    Guaranteed Ship Financing Obligations dated February 10,
                    2000 between Project America Ship I, Inc., as Shipowner, and
                    The Bank of New York, as Indenture Trustee. (filed on August
                    14, 2000 as Exhibit 4.(ii)(d)(3) to the Company's Report on
                    Form 10-Q and incorporated herein by reference).

**4.(ii)(d)(4)      Authorization Agreement dated February 10, 2000 between The
                    United States of America, represented by the Maritime
                    Administrator, and The Bank of New York, as the Indenture
                    Trustee under the Trust Indenture dated February 10, 2000
                    between the Indenture Trustee and Project America Ship I,
                    Inc., the Shipowner. (filed on August 14, 2000 as Exhibit
                    4.(ii)(d)(4) to the Company's Report on Form 10-Q and
                    incorporated herein by reference).

**4.(ii)(d)(5)      Security Agreement Relating to United States Government
                    Guaranteed Ship Finaincing Obligations dated February 10,
                    2000 between Project America Ship I, Inc., as Shipowner, and
                    The United States of America. (filed on August 14, 2000 as
                    Exhibit 4.(ii)(d)(5) to the Company's Report on Form 10-Q
                    and incorporated herein by reference).

**4.(ii)(d)(6)      Promissory Note to United States of America dated February
                    2000 by Project America Ship I, Inc. (filed on August 14,
                    2000 as Exhibit 4.(ii)(d)(6) to the Company's Report on Form
                    10-Q and incorporated herein by reference).

**4.(ii)(d)(7)      Title XI Reserve Fund and Financial Agreement dated February
                    10, 2000 by Project America Ship I, Inc. and The United
                    States of America, represented by the Secretary of
                    Transportation, acting by and through the Maritime
                    Administrator. (filed on August 14, 2000 as Exhibit
                    4.(ii)(d)(7) to the Company's Report on Form 10-Q and
                    incorporated herein by reference).

**4.(ii)(d)(8)      Guaranty Agreement in Favor of the United States of America
                    dated February 10, 2000 by and between Project America,
                    Inc., as Guarantor, and The United States of America,
                    represented by the Secretary of Transportation, acting by
                    and through the Maritime Administrator. (filed on August 14,
                    2000 as Exhibit 4.(ii)(d)(8) to the Company's Report on Form
                    10-Q and incorporated herein by reference).

**4.(ii)(d)(9)      Secretary's Determination, dated August 10, 2000, as it
                    relates to $50,000,000 of United States Government
                    Guaranteed Ship Financing Notes. (filed on November 14, 2000
                    as Exhibit 4.(ii)(d)(9) to the Company's Report on Form 10-Q
                    and incorporated herein by reference).

**4.(ii)(d)(10)     $50,000,000 Note Purchase Agreement dated August 10, 2000 as
                    it relates to United States Government Guaranteed ship
                    Financing Notes - Variable Rate Notes due July 31, 2001
                    signed by Project America, Inc. and accepted by Chase
                    Securities, Inc. (filed on November 14, 2000 as Exhibit
                    4.(ii)(d)(10) to the Company's Report on Form 10-Q and
                    incorporated herein by reference).

**4.(ii)(d)(11)     $50,000,000 Promissory Note to United States of America
                    dated August 10, 2000 by Project America Ship I, Inc. (filed
                    on November 14, 2000 as Exhibit 4.(ii)(d)(11) to the
                    Company's Report on Form 10-Q and incorporated herein by
                    reference).


                                       56
<PAGE>   57

                          AMERICAN CLASSIC VOYAGES CO.
                           INDEX TO EXHIBITS (CONT'D.)

EXHIBIT NUMBER                        DESCRIPTION
--------------                        -----------

**4.(ii(e)(1)       Commitment to Guarantee Obligations dated October 16, 2000
                    by The United States of America, represented by the
                    Secretary of Transportation, acting by and through the
                    Maritime Administrator, and accepted by Cape May Light,
                    L.L.C., the Shipowner. (filed on November 14, 2000 as
                    Exhibit 4.(ii)(e)(1) to the Company's Report on Form 10-Q
                    and incorporated herein by reference).

**4.(ii)(e)(2)      Bond Purchase Agreement dated October 16, 2000 as it relates
                    to United States Government Guaranteed Ship Financing Bonds,
                    2000 Series - 7.25% Sinking Fund Bonds due April 15, 2027 in
                    the aggregate principal amount of $37,900,000 signed by Cape
                    May Light, L.L.C. and accepted by Chase Securities, Inc.
                    (filed on November 14, 2000 as Exhibit 4.(ii)(e)(2) to the
                    Company's Report on Form 10-Q and incorporated herein by
                    reference).

**4.(ii)(e)(3)      $37,900,000 U.S. Government Guaranteed Ship Financing Bonds,
                    2000 Series, 7.25% Sinking Fund Bonds due April 15, 2027,
                    issued by Cape May Light, L.L.C. (filed on November 14, 2000
                    as Exhibit 4.(ii)(e)(3) to the Company's Report on Form 10-Q
                    and incorporated herein by reference).

**4.(ii)(e)(4)      Trust Indenture Relating to United States Government
                    Guaranteed Ship Financing Obligations dated October 16, 2000
                    between Cape May Light, L.L.C., as Shipowner, and The Bank
                    of New York, as Indenture Trustee. (filed on November 14,
                    2000 as Exhibit 4.(ii)(e)(4) to the Company's Report on Form
                    10-Q and incorporated herein by reference).

**4.(ii)(e)(5)      Authorization Agreement dated October 16, 2000 between The
                    United States of America, represented by the Secretary of
                    Transportation, acting by and through the Maritime
                    Administrator, and The Bank of New York, as the Indenture
                    Trustee under the Trust Indenture dated October 16, 2000
                    between the Indenture Trustee and Cape May Light, L.L.C.,
                    the Shipowner. (filed on November 14, 2000 as Exhibit
                    4.(ii)(e)(5) to the Company's Report on Form 10-Q and
                    incorporated herein by reference).

**4.(ii)(e)(6)      Security Agreement Relating to United States Government
                    Guaranteed Ship Financing Obligations dated October 16, 2000
                    between Cape May Light, L.L.C., as Shipowner, and The United
                    States of America. (filed on November 14, 2000 as Exhibit
                    4.(ii)(e)(6) to the Company's Report on Form 10-Q and
                    incorporated herein by reference).

**4.(ii)(e)(7)      Title XI Reserve Fund and Financial Agreement dated October
                    16, 2000 between Cape May Light, L.L.C. and The United
                    States of America, represented by the Secretary of
                    Transportation, acting by and through the Maritime
                    Administrator. (filed on November 14, 2000 as Exhibit
                    4.(ii)(e)(7) to the Company's Report on Form 10-Q and
                    incorporated herein by reference).


                                       57
<PAGE>   58

                          AMERICAN CLASSIC VOYAGES CO.
                           INDEX TO EXHIBITS (CONT'D.)

EXHIBIT NUMBER                        DESCRIPTION
--------------                        -----------

**4.(ii)(e)(8)      Guaranty Agreement in Favor of the United States of America
                    dated October 16, 2000 by and between Cape May Light,
                    L.L.C., as Guarantor, and The United States of America,
                    represented by the Secretary of Transportation, acting by
                    and through the Maritime Administrator. (filed on November
                    14, 2000 as Exhibit 4.(ii)(e)(8) to the Company's Report on
                    Form 10-Q and incorporated herein by reference).

**4.(ii)(f)(1)      Commitment to Guarantee Obligations dated October 16, 2000
                    by The United States of America, represented by the
                    Secretary of Transportation, acting by and through the
                    Maritime Administrator, and accepted by Cape Cod Light,
                    L.L.C., the Shipowner. (filed on November 14, 2000 as
                    Exhibit 4.(ii)(f)(1) to the Company's Report on Form 10-Q
                    and incorporated herein by reference).

**4.(ii)(f)(2)      Bond Purchase Agreement dated October 16, 2000 as it relates
                    to United States Government Guaranteed Ship Financing Bonds,
                    2000 Series - 7.25% Sinking Fund Bonds due April 15, 2027 in
                    the aggregate principal amount of $38,500,000 signed by Cape
                    Cod Light, L.L.C. and accepted by Chase Securities Inc.
                    (filed on November 14, 2000 as Exhibit 4.(ii)(f)(2) to the
                    Company's Report on Form 10-Q and incorporated herein by
                    reference).

**4.(ii)(f)(3)      $38,500,000 U.S. Government Guaranteed Ship Financing Bonds,
                    2000 Series, 7.25% Sinking Fund Bonds due April 15, 2027,
                    issued by Cape Cod Light, L.L.C. (filed on November 14, 2000
                    as Exhibit 4.(ii)(f)(3) to the Company's Report on Form 10-Q
                    and incorporated herein by reference).

**4.(ii)(f)(4)      Trust Indenture Relating to United States Government
                    Guaranteed Ship Financing Obligations dated October 16, 2000
                    between Cape Cod Light, L.L.C., as Shipowner, and The Bank
                    of New York, as Indenture Trustee. (filed on November 14,
                    2000 as Exhibit 4.(ii)(f)(4) to the Company's Report on Form
                    10-Q and incorporated herein by reference).

**4.(ii)(f)(5)      Authorization Agreement dated October 16, 2000 between The
                    United States of America, represented by the Secretary of
                    Transportation, acting by and through the Maritime
                    Administrator, and The Bank of New York, as the Indenture
                    Trustee under the Trust Indenture dated October 16, 2000
                    between the Indenture Trustee and Cape Cod Light, L.L.C.,
                    the Shipwowner. (filed on November 14, 2000 as Exhibit
                    4.(ii)(f)(5) to the Company's Report on Form 10-Q and
                    incorporated herein by reference).

**4.(ii)(f)(6)      Security agreement Relating to United States Government
                    Guaranteed Ship Financing Obligations dated October 16, 2000
                    between Cape Cod Light, L.L.C., as Shipowner, and The United
                    States of America. (filed on November 14, 2000 as Exhibit
                    4.(ii)(f)(6) to the Company's Report on Form 10-Q and
                    incorporated herein by reference).

**4.(ii)(f)(7)      Title XI Reserve Fund and Financial Agreement dated October
                    16, 2000 between Cape Cod Light, L.L.C. and The United
                    States of America, represented by the Secretary of
                    Transportation, acting by and through the Maritime
                    Administrator. (filed on November 14, 2000 as Exhibit
                    4.(ii)(f)(7) to the Company's Report on Form 10-Q and
                    incorporated herein by reference).

**4.(ii)(f)(8)      Guaranty Agreement in Favor of the United States of America
                    dated October 16, 2000 by and between Cape Cod Light,
                    L.L.C., as Guarantor, and The United States of America,
                    represented by the Secretary of Transportation, acting by
                    and through the Maritime Administrator. (filed on November
                    14, 2000 as Exhibit 4.(ii)(f)(8) to the Company's Report on
                    Form 10-Q and incorporated herein by reference).

**4.(ii)(g)(1)      Preferred Ship Mortgage dated October 18, 2000 executed by
                    Oceanic Ship Co. (in connection with the purchase of the ms
                    Patriot). (filed on November 14, 2000 as Exhibit
                    4.(ii)(g)(1) to the Company's Report on Form 10-Q and
                    incorporated herein by reference).

                                       58
<PAGE>   59

                          AMERICAN CLASSIC VOYAGES CO.
                           INDEX TO EXHIBITS (CONT'D.)

EXHIBIT NUMBER                        DESCRIPTION
--------------                        -----------

**4.(ii)(g)(2)      $84,500,000 Promissory Note dated October 18, 2000 to Hal
                    Antillen N.V. by Oceanic Ship Co. (in connection with the
                    purchase of the ms Patriot). (filed on November 14, 2000 as
                    Exhibit 4.(ii)(g)(2) to the Company's Report on Form 10-Q
                    and incorporated herein by reference).

**4.(iii)(a)(1)     Junior Convertible Subordinated Indenture dated as of
                    February 22, 2000 between the Company and The Bank of New
                    York, as trustee (includes form of Subordinated Debenture)
                    (filed on February 29, 2000 as exhibit 4.1 to the Company's
                    8-K and incorporated herein by reference).

**4.(iii)(a)(2)     Amended and Restated Declaration of Trust of AMCV Capital
                    Trust I among American Classic Voyages Co. (the "Company") ,
                    The Bank of New York, as Property Trustee, Philip C. Calian,
                    Randal L. Talcott and Jordan B. Allen, as Administrative
                    Trustee (includes form of Preferred Security) (filed on
                    February 29, 2000 as exhibit 4.2 to the company's 8-K and
                    incorporated herein by reference).

**4.(iii)(a)(3)     Form of Preferred Security (included in exhibit 4.(iii) (a)
                    (1)) (filed on February 29, 2000 as exhibit 4.3 to the
                    Company's 8-K and incorporated herein by reference).

**4.(iii)(a)(4)     Form of Subordinated Debenture (included in exhibit 4. (iii)
                    (a) (2) ) (filed on February 29, 2000 as exhibit 4.4 to the
                    Company's 8-K and incorporated herein by reference)

   9.               Not applicable.

**10.(i)(a)(1)      Administrative Services Agreement by and between the Company
                    and Equity Group Investments, Inc. (filed on March 2, 1993
                    as Exhibit 10.(i)(A) to Amendment No. 3 to the Company's
                    Registration Statement on Form S-1 (Registration No.
                    33-45139) and incorporated herein by reference).

**10.(ii)(a)(1)     Preferential Assignment Agreement dated September 27, 1984,
                    by and between the Board of Commissioners of the Port of New
                    Orleans and the Company, including Assignment thereof and
                    Amendments thereto (filed on January 17, 1992 as Exhibit
                    10.(ii)(D)(2) to the Company's Registration Statement on
                    Form S-1 (Registration No. 33-45139) and incorporated herein
                    by reference).

**10.(ii)(a)(2)     Lease dated May 30, 1995 by and between Equity Office
                    Properties, Inc., as agent for beneficial owner, as
                    Landlord, and Great Hawaiian Properties Corporation, d/b/a
                    American Hawaii Cruises, as Tenant (filed on April 1, 1996
                    as Exhibit 10.(ii)(D)(3) to the Company's Form 10-K dated
                    December 31, 1995).

**10.(ii)(a)(3)     First Amendment dated March 12, 1997 by and between Equity
                    Office Properties, Inc., as agent for beneficial owner, as
                    Landlord, and Great Hawaiian Properties Corporation, d/b/a
                    American Hawaii Cruises, as Tenant (filed on March 31, 1999
                    as Exhibit 10.(ii)(a)(3) to the Company's Form 10-K dated
                    December 31, 1998 and incorporated herein by reference).

**10.(ii)(a)(4)     Assignment and Assumption of Lease dated January 1, 1998
                    between Great Hawaiian Properties Corporation, d/b/a
                    American Hawaii Cruises, as Assignor, and American Classic
                    Voyages Co., as Assignee (filed on March 31, 1999 as Exhibit
                    10.(ii)(a)(4) to the Company's Form 10-K dated December 31,
                    1998 and incorporated herein by reference).

**10.(ii)(a)(5)     Second Amendment dated August 10, 1998 by and between Equity
                    Office Properties, Inc., as agent for beneficial owner, as
                    Landlord, and American Classic Voyages Co., as Tenant (filed
                    on March 31, 1999 as Exhibit 10.(ii)(a)(5) to the Company's
                    Form 10-K dated December 31, 1998 and incorporated herein by
                    reference).

**10.(ii)(a)(6)     Lease dated October 16, 1998 by and between MFD Partners, as
                    Landlord, and American Hawaii Properties Corporation, as
                    Tenant (filed on March 31, 1999 as Exhibit 10.(ii)(a)(6) to
                    the Company's Form 10-K dated December 31, 1998 and
                    incorporated herein by reference).

                                       59
<PAGE>   60
                          AMERICAN CLASSIC VOYAGES CO.
                           INDEX TO EXHIBITS (CONT'D.)

EXHIBIT NUMBER                        DESCRIPTION
--------------                        -----------

**10.(iii)(a)(1)    Performance Management Objectives Bonus Plan (filed on
                    January 17, 1992 as Exhibit 10.(iii)(A)(2) to the Company's
                    Registration Statement on Form S-1 (Registration No.
                    333-44225) and incorporated herein by reference).

**10.(iii)(a)(2)    Executive Bonus Plan (filed on January 17, 1992 as Exhibit
                    10.(iii)(a)(4) to the Company's Registration Statement on
                    Form S-1 (Registration No. 33-45139) and incorporated herein
                    by reference).

**10.(iii)(a)(3)    American Classic Voyages Co. S. Cody Engle Stock Option
                    Agreement (filed on January 17, 1992 as Exhibit
                    10.(iii)(A)(6) to the Company's Registration Statement on
                    Form S-1 (Registration No. 33-45139) and incorporated herein
                    by reference).

**10.(iii)(a)(4)    American Classic Voyages Co. Dividend Reinvestment and
                    Common Stock Purchase Plan (filed on June 22, 1994 as part
                    of the Company's Registration Statement on Form S-3
                    (Registration No. 33-80614) and incorporated herein by
                    reference).

**10.(iii)(a)(5)    American Classic Voyages Co. 1992 Stock Option Plan (filed
                    on January 14, 1998 as part of the Company's Registration
                    Statement on Form S-8 (Registration No. 333-44225) and
                    incorporated herein by reference).

**10.(iii)(a)(6)    American Classic Voyages Co. Deferred Compensation Plan
                    (filed on March 31, 1999 as Exhibit 10.(iii)(a)(6) to the
                    Company's Form 10-K dated December 31, 1998 and incorporated
                    herein by reference).

 *10.(iv)(a)(1)     Master Shipbuilding Contract for Construction of Two
                    Passenger Vessels by and between Ingalls Shipbuilding, Inc.
                    and Project America, Inc. for Hulls No. 7671 and 7672, dated
                    March 9, 1999.*

                    Exhibit A - Shipbuilding Contract for Construction of One
                    Passenger Vessel by and between Ingalls Shipbuilding, Inc.
                    and Project America, Inc. for Hull No. 7671, dated March 9,
                    1999 (a substantially identical Shipbuilding Contract has
                    been entered into for hull no.7672, with a delivery date of
                    January 2004). (filed as Exhibit 10 to the Company's Form
                    8-K dated March 26, 1999 and incorporated herein by
                    reference).

 *10.(iv)(a)(2)     Construction Contract for Coastal Queen Class Vessel dated
                    May 1, 1999 by and between Coastal Queen Holdings, L.L.C.
                    and Atlantic Marine, Inc. (filed on May 14, 1999 as Exhibit
                    10.(iv)(a)(3) to the Company's Form 10-Q dated March 31,
                    1999 and incorporated herein by reference).*

                    Appendix One - Coastal Queen Milestone Payments
                    Appendix Two - Affidavit for Exemption of Boat Sold for
                    Removal from the State of Florida by a Nonresident Purchaser
                    Appendix Three - Maker's List

 **10.(iv)(a)(3)    Guaranty dated May 1, 1999 made by The Delta Queen Steamboat
                    Co. in favor of Atlantic Marine Inc. (filed on May 14, 1999
                    as Exhibit 10.(iv)(a)(4) to the Company's Form 10-Q dated
                    March 31, 1999 and incorporated herein by reference).

 **10.(iv)(a)(4)    Asset Purchase and Sale Agreement dated April 29, 1999 by
                    and between Capitol Queen & Casino, Inc., as Seller, and The
                    Delta Queen Steamboat Co., as Purchaser (filed on May 14,
                    1999 as Exhibit 10.(iv)(a)(5) to the Company's Form 10-Q
                    dated March 31, 1999 and incorporated herein by reference).

                    Exhibit A - Escrow Agreement
                    Exhibit B - Vessel Inventory
                    Exhibit C - Order Approving Sale of Personal Property Free
                    and Clear of Liens, Claims and Encumbrances



                                       60
<PAGE>   61
                          AMERICAN CLASSIC VOYAGES CO.
                           INDEX TO EXHIBITS (CONT'D.)

EXHIBIT NUMBER                        DESCRIPTION
--------------                        -----------

**10.(iv)(a)(5)     Letter of Credit Agreement dated October 15, 1999 between
                    American Classic Voyages Co. and The Chase Manhattan Bank
                    (filed on November 9, 1999 as Exhibit 10.(iv)(a)(6) of the
                    Company's 10-Q/A dated March 31, 1999 and incorporated
                    herein by reference).

                    Exhibit A - Form of Irrevocable Letter of Credit

**10.(iv)(a)(6)     Amended and Restated Reimbursement Agreement dated October
                    15, 1999 by and among Samuel Zell, Samuel Zell Revocable
                    Trust and American Classic Voyages Co. (filed on November 9,
                    1999 as Exhibit 10.(iv)(a)(7) of the Company's 10-Q/A dated
                    March 31, 1999 and incorporated herein by reference).

**10.(iv)(a)(7)     Memorandum of Agreement dated August 5, 1999 by and between
                    American Classic Voyages Co., as Buyer, and Hal Antillen
                    N.V., as Seller, as amended October 11, 1999 (filed on
                    November 9, 1999 as Exhibit 10.(iv)(a)(6) of the Company's
                    10-Q/A dated March 31, 1999 and incorporated herein by
                    reference).

                    Exhibit A - Vessel Details Exhibit B - Form of Letter of
                    Credit Exhibit C - Form of Escrow Agreement Exhibit D - Form
                    of Promissory Note Exhibit E - Form of First Preferred Ship
                    Mortgage Exhibit F - Form of General Assignment of Insurance
                    Exhibit G - Form of Guarantee Exhibit H - Excluded Art

**10.(iv)(a)(8)     Vessel Conversion Agreement dated August 20, 1999 between
                    Nichols Brothers Boat Builders, Inc. and The Delta Queen
                    Steamboat Co.* (filed on November 15, 1999 as Exhibit
                    10.(iv)(a)(8) to the Company's Form 10-Q dated September 30,
                    1999 and incorporated herein by reference).

*10.(iv)(a)(9)      Amended and Restated Agreement dated as of December 22, 1999
                    by and between Cascade General, Inc. (Shipyard) and The
                    Delta Queen Steamboat Co. (Owner) for the conversion of the
                    Columbia Queen. (filed on March 30, 2000 as Exhibit
                    10.(iv)(a)(9) to the Company's Annual Report on Form 10-K
                    and incorporated herein by reference).

**10.(iv)(a)(10)    Amendment "1" to May 1, 1999 Construction Contract between
                    Coastal Queen Holdings, L.L.C. and Atlantic Marine, Inc.
                    dated June 13, 2000. (filed on November 14, 2000 as Exhibit
                    10.(iv)(a)(10) to the Company's Report on Form 10-Q and
                    incorporated herein by reference).

**10.(iv)(a)(11)    Assignment and Assumption of Contract dated September 25,
                    2000 by and Between Delta Queen Coastal Voyages, L.L.C.
                    (f/k/a Coastal Queen Holdings, L.L.C.), as Assignor, and
                    Cape May Light, L.L.C. and Cape Cod Light, L.L.C., as
                    Assignees. (filed on November 14, 2000 as Exhibit
                    10.(iv)(a)(11) to the Company's Report on Form 10-Q and
                    incorporated herein by reference).

 **10.(iv)(a)(12)   Amendment No. 2 to Construction Contract for Coastal Queen
                    Class Vessel dated October 16, 2000 by and between Atlantic
                    Marine, Inc. and Cape May Light, L.L.C. and Cape Cod Light,
                    L.L.C. (filed on November 14, 2000 as Exhibit 10.(iv)(a)(12)
                    to the Company's Report on Form 10-Q and incorporated herein
                    by reference).

**10.(v)            Trust Preferred Securities Guarantee Agreement dated
                    February 22, 2000, by the Company and The Bank of New York,
                    as trustee (filed on February 29, 2000 as exhibit 10.1 to
                    the Company's 8-K and incorporated herein by reference).

 10.(vi)            Office lease executed November 30, 2000, by and between
                    Duke-Weeks Realty Limited Partnership, an Indiana limited
                    partnership ("Landlord"), and American Classic Voyages Co.,
                    a Delaware corporation ("Tenant").

                                       61
<PAGE>   62

                          AMERICAN CLASSIC VOYAGES CO.
                           INDEX TO EXHIBITS (CONT'D.)

EXHIBIT NUMBER                        DESCRIPTION
--------------                        -----------

   11.              Not applicable.

   12.              Not applicable.

   13.              Not applicable.

   16.              Not applicable.

   18.              Not applicable.

   21.              Subsidiaries of the Company.

   22.              Not applicable.

   23.              Consent of KPMG LLP

   24.              Not applicable.

   27.              Not applicable.

   28.              Not applicable.



*   Certain portions of this exhibit previously filed and incorporated by
    reference were omitted pursuant to an application for an order of
    confidential treatment pursuant to Rule 24b-2 under the Securities and
    Exchange Act of 1934, as amended. This non-public information was filed
    separately with the Securities and Exchange Commission.

**  Previously filed and incorporated by reference.



                                       62