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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, 1999

                                       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
 incorporation or organization)                              Identification No.)

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. [X]

The aggregate market value of voting stock held by non-affiliates of the
registrant was $333.7 million based upon the last reported sale price of $25.00
per share on March 27, 2000 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 March 27, 2000, there were 20,749,653 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
              24, 2000.

================================================================================



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                          AMERICAN CLASSIC VOYAGES CO.



                                      INDEX
<TABLE>
<CAPTION>
     ITEM DESCRIPTION                                                                                             PAGE
     ----------------                                                                                             ----
<S>               <C>                                                                                             <C>
     Part I
                  Item 1   --    Business........................................................................    3
                  Item 2   --    Properties......................................................................   14
                  Item 3   --    Legal Proceedings...............................................................   15
                  Item 4   --    Submission of Matters to a Vote of Security Holders.............................   15

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

     Part III
                  Item 10  --    Directors and Executive Officers of the Registrant..............................   17
                  Item 11  --    Executive Compensation..........................................................   17
                  Item 12  --    Security Ownership of Certain Beneficial Owners
                                 and Management..................................................................   17
                  Item 13  --    Certain Relationships and Related Transactions..................................   17

     Part IV
                  Item 14  --    Exhibits, Financial Statement Schedules,
                                 and Reports on Form 8-K.........................................................   18
</TABLE>


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                          AMERICAN CLASSIC VOYAGES CO.

                                     PART I

ITEM 1. BUSINESS

GENERAL

American Classic Voyages Co. is the leading provider of overnight passenger
cruises among the Hawaiian Islands and on the Mississippi River system. We
currently operate two cruise lines under the names American Hawaii and Delta
Queen. American Hawaii, acquired in August 1993, operates the S.S. Independence,
a U.S.-flagged ocean liner with 867 total passenger berths. American Hawaii
provides inter-island cruises on a year-round basis among the Hawaiian Islands.
Delta Queen currently operates the Delta Queen, American Queen and Mississippi
Queen, U.S.-flagged paddlewheel steamboats having 1,026 total passenger berths.
Delta Queen provides cruise vacations on the Mississippi, Ohio, Cumberland,
Tennessee, Arkansas, Illinois and Atchafalaya Rivers. We do not offer gaming on
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 Delta Queen through various subsidiaries, and Great Hawaiian Cruise
Line, Inc., which operates American Hawaii through various subsidiaries.
American Classic Voyages Co. also owns and controls Project America, Inc., which
operates United States Lines(R)through various subsidiaries. American Classic
Voyages Co.'s principal executive offices are located at Two North Riverside
Plaza, Suite 200, Chicago, Illinois 60606. Delta Queen and American Hawaii's
principal administrative offices 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 four sailing days
across 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 below), 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 (see below) 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. We will enjoy the benefits of the Pilot Project Statute,
however, only if we comply with its terms. The Pilot Project Statute requires,
among other things, as a condition to obtaining these rights that the agreement
to construct the new cruise ships provide that (1) the vessels are built with
more than 867 berths each and (2) delivery of the first vessel be prior to
January 1, 2005 and the second vessel 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 less than 10,000 gross tons.

CURRENT OPERATIONS

American Hawaii -- Current Operations

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 867 passenger berths. American Hawaii offers primarily seven
day itineraries with ports of call throughout the Hawaiian Islands. 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.



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Cruise fares on American Hawaii for a seven-day cruise, as stated in the 2000
cruise brochure, range from luxurious suites at $3,435 per person to interior
cabins with a single sofa bed and fold-away upper berth at $1,335 per person,
based on double occupancy. The fare also includes three full service meals per
day, along with mid-afternoon snacks and a late evening buffet, night
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.

American Hawaii offers additional services and products to its passengers,
including bar services, beauty salon services, photography services, shore
excursions and gift shop products. American Hawaii also distributes a line of
specialty products through its onboard gift shops utilizing the "American Hawaii
Cruises" logo. In order to facilitate and simplify passengers' travel planning
process, American Hawaii offers air transportation arrangements to and from the
Hawaiian Islands through agreements with several major commercial airlines as
well as trip cancellation insurance.

American Hawaii is marketed as "the best and most convenient" way to experience
the Hawaiian Islands. We accomplish this by focusing on onboard dining,
entertainment, and 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. Additionally, the Hawaii vacation package is
promoted as a convenient and rewarding alternative to land-based multi-island
vacations.

American Hawaii's marketing efforts target consumers who are interested in
Hawaii, cruise enthusiasts and other consumers who fit certain demographic or
geographic profiles. American Hawaii sends out more than six million pieces of
direct mail annually to reach these potential customers in an effort to develop
cruise sales. These direct mailings are made throughout the year to drive
business during certain specific time frames. American Hawaii also sends out the
Holokai Hui News newsletter, aimed at encouraging passengers to repeat, and
sends cooperative direct mail to travel agents to promote cruise sales. The
travel agency community also receives periodic fax broadcasts and a quarterly
newsletter, the Kuaihelani. American Hawaii also places advertisements in
specialized publications such as Islands, Hawaii, Modern Maturity, Car and
Travel and Endless Vacation magazines, and has been the subject of numerous
feature articles in national travel and leisure magazines and newspaper travel
sections.

Delta Queen -- Current Operations

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 of embarkation
and disembarkation, which are typically locations of historical or cultural
significance, include New Orleans, Memphis, St. Louis, St. Paul, Louisville,
Cincinnati, Pittsburgh, Nashville, Chattanooga, and Galveston. Other ports of
call include such towns as Hannibal, Missouri; Prairie du Chien, Wisconsin;
Vicksburg and Natchez, Mississippi; and Shiloh, Tennessee.

According to the Cruise Industry News Market Report, in 1999, Delta Queen
enjoyed a 59% market share of available berths within the domestic rivers and
waterways segments of the overnight cruise market. 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 are
explored. We believe individuals are attracted to our paddlewheel steamboat
cruises because of the quality of our service, dining, accommodations and
entertainment, as well as the unique characteristics of the steamboat
experience, including the connection to American history.

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 cruises
include: "Spring Pilgrimage," "Fall Foliage - Autumn in America" and "Old
Fashioned Holidays" while geographic themes include "Dixie Fest," "Cajun
Culture" and "Gardens of the River." Old standbys and continuing favorites are
"Kentucky Derby" cruises that include attendance at the Kentucky Derby horse
race and "The Great Steamboat Race," a reenactment of the famous 19th Century
race between the Natchez and the Robert E. Lee steamboats. For nostalgia and
history lovers, Delta Queen offers "Big Band," "Civil War" and "Fabulous 50s"
theme cruises. In addition, several new theme cruises have been added, such as
"Tramping on the River" cruises featuring impromptu river stops, "The History of
Steamboatin'," which retraces the 1811 voyage of the first successful steamboat
voyage down the Ohio and Mississippi Rivers to New Orleans and "Mississippi
River American Indian" in which the lifestyle, religion and society of America's
first inhabitants is featured.


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The Steamboatin'(TM) cruise fare for an average five-day cruise, as stated in
the 2000/2001 cruise brochure, ranges from luxurious suites at $3,345 per person
to interior cabins with lower and upper passenger berths at $1,445 per person,
based on double occupancy. The fare also includes three full service meals per
day, along with mid-afternoon snacks and a late evening buffet, day and night
entertainment on the vessels and port charges.

To attract additional customers, Delta Queen has developed products which
combine its steamboat 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 targeted
direct mail, direct response advertising and other promotional activity. Media
coverage generated by public relations activity is another method of acquiring
new customers and building brand awareness. In 1999, Steamboatin' vacations were
featured or mentioned in more than 2,600 articles in publications with national
and local circulations. In addition, each year a significant number of new
customers are referred by prior customers. Nearly all Steamboatin' vacations are
booked via travel agents, who receive frequent communications from Delta Queen
and who are supported with collateral and mailing materials.

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 which 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 1999, no single customer accounted for more than 10% of our consolidated
revenues.

Pricing and Advance Reservations

We issue separate full color sales brochures for Delta Queen, American Hawaii
and United States Lines 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 March 10, 2000, advance reservations for the 2000 cruise year for
Delta Queen, American Hawaii and United States Lines combined were $129.8
million. As of March 10, 1999, advance reservations for the 1999 cruise year
were $119.8 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.


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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 both our Hawaii
and Delta Queen 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. To expand Delta
Queen's position in the U.S. inland waterway cruise market, we plan to extend
our cruise itineraries into the U.S. coastal cruise market with up to five new
coastal cruisers and to introduce a fourth riverboat, the Columbia Queen, to
operate on the Columbia River system in the Pacific Northwest.

Hawaii Expansion Plans

Acquisition and Introduction of ms Patriot

In order to expedite the introduction of a larger, more modern ship into the
Hawaii cruise market, we have agreed to acquire a foreign-built vessel and
operate it as a U.S.-flagged vessel in the Hawaii market. Our operation of a
foreign-built vessel in the Hawaiian Islands is permitted under the terms of the
Pilot Project Statute. We have entered into a contract to purchase the ms Nieuw
Amsterdam from Holland America Line for $114.5 million. Under the terms of the
purchase agreement, the vessel will be delivered in October, 2000. We intend to
rename the 1,214-passenger vessel the ms Patriot. We have scheduled the ms
Patriot's inaugural voyage for December, 2000. The vessel has nine public decks
with 607 passenger staterooms, 68% of which are outside cabins, and including 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
delivery we plan to renovate portions of the vessel for an estimated cost of $12
million to $16 million by adding a destination learning center, family
activities center, and upgrading the conference and meeting facilities and other
passenger facilities on board. The ms Patriot will offer seven-day cruise
vacations throughout the Hawaiian Islands, sailing from Oahu to Kauai, Maui, and
the island of Hawaii. Guests on the ms Patriot will be able to select numerous
shore excursions featuring some of the Hawaiian Islands' most beautiful
attractions. The ms Patriot cruises will feature American and Hawaiian regional
cuisine, a cultural enrichment program and nightly showplace entertainment.

New Hawaii Vessels

On March 9, 1999, we executed definitive agreements with Ingalls Shipbuilding to
construct at least two new vessels for the Hawaii cruise market. The new Hawaii
cruise ships are currently estimated to cost $440 million each, plus
approximately $30 million for furnishings, fixtures and equipment. 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 will deliver the first new ship
in January 2003 and the second ship in January 2004. 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.

We plan to operate the ms Patriot and the new Hawaii vessels under the United
States Lines banner. We acquired the rights to the United States Lines name in
October, 1999. We believe that the United States Lines was a prominent passenger
shipping line in America from the turn of the century through the early 1960's.

Delta Queen Expansion Plans

In order to capitalize upon its strong market position and brand name
recognition, Delta Queen plans to expand its current business by introducing:
(1) a fourth riverboat, the Columbia Queen, offering new itineraries on the
Columbia River system in the Pacific Northwest; and (2) 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 Pacific Northwest
and coastal markets, Delta Queen plans to offer its unique cruising experience
on itineraries highlighting historically or culturally interesting or beautiful
destinations.



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New Riverboat

We have acquired a substantially complete riverboat for $3.2 million and are
currently converting this riverboat into an overnight passenger vessel with 161
passenger berths. When it is complete, we plan to operate it on the Columbia
River system as the Columbia Queen, the fourth member of our Delta Queen fleet.
We have engaged Cascade General, Inc. to perform the conversion work. We have
scheduled the vessel to enter service in May 2000. The total cost to renovate,
relocate, start-up and market the new vessel is estimated to be $25 million to
$28 million. The Columbia Queen will operate approximately 10 months out of the
year from its homeport of Portland, Oregon, and will traverse the Columbia,
Snake and Willamette Rivers in the Pacific Northwest. Itineraries focus on
providing passengers with an adventurous and educational cruise experience. Its
eight-day vacation package features an overnight stay in Portland, a visit to
Mount St. Helens National Monument, a seven-day cruise and many adventurous
excursions from the coastal town of Astoria, Oregon to the exciting Hells Canyon
in Lewiston, Idaho.

Coastal Cruise Vessels

We believe that there are itineraries along the U.S. coastlines with significant
cruise market potential. We plan to capture underserved coastal markets by
building at least two new ships with approximately 226 passenger berths each. We
have entered into a construction contract with Atlantic Marine, Inc. of
Jacksonville, Florida to construct the first two coastal cruise vessels for our
Delta Queen line. Under the construction contract, the first coastal cruise
vessel is scheduled to be delivered in early March 2001 and the second vessel is
scheduled for delivery in June 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
$35 million.

The new Delta Queen coastal cruise vessels will 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.

Possible new destinations identified by Delta Queen include the following:

     - EASTERN SEABOARD                           - CALIFORNIA
       Halifax, Nova Scotia                         San Francisco
       New Brunswick, Maine                         Napa Valley's wine country
       Boston Harbor
       Martha's Vineyard
       Chesapeake Bay                             - PACIFIC NORTHWEST AND ALASKA
       New York City                                Puget Sound
       Baltimore                                    Canada's Inside Passage
       Annapolis, Maryland                          The Alaskan coast
       Washington, D.C.
       Charleston, South Carolina
       Savannah, Georgia
       Florida's beaches



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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 415 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
1997 and 1998, bills were introduced to the Senate 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. None of
these bills were approved by the relevant subcommittees or committees of the
Senate or the House of Representatives.

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 which 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 drydocked for an inspection of
the hulls' exteriors every five years. Previously, American Hawaii was required
to drydock the S.S. Independence 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 of the drydocking of the S.S. Independence
to 30 months, subject to annual hull surveys. The S.S. Independence was out of
service for an 18-day period during January 2000 for its drydocking.

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.
We do not anticipate making any material expenditures in 2000 with respect to
environmental matters. However, the coverage and attendant compliance costs
associated with such laws, regulations and 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 drydock.

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. At this time, we cannot predict if the proposed changes will be
approved as currently constituted, or at all.


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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.

American Hawaii is the sole U.S.-flagged overnight cruise ship operator and the
largest provider of cruise vacations among the Hawaiian Islands. American Hawaii
competes with operators of foreign-flagged cruise ships which visit the Hawaiian
Islands on voyages greater than seven days. 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 must spend at least four days sailing
across 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 layups 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.

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.

Our annual protection and indemnity insurance premium consists of an advance
call which recently has approximated 71% of the expected total annual premium,
and a supplemental call determined by Steamship Mutual's managing directors
later in the year. 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.

We also carry hull and machinery coverage with various insurers, which insures
against physical loss and damage to the vessels, subject to a $500,000
deductible and/or co-payment requirements per occurrence. 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.

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.


                                       9
<PAGE>   10


Employees

We employed 1,549 persons as of December 31, 1999. Of the vessels' onboard
employees, the American Maritime Officers of the AFL-CIO ("American Maritime
Officers") represented approximately 138 individuals, and the Seafarers
International Union of North America, Atlantic, Gulf, Lakes and Inland Waters
District of the AFL-CIO ("Seafarers") represented approximately 695 individuals.
The American Maritime Officers' contracts for Delta Queen and American Hawaii
expire in February 2004 and May 2000, respectively, and the Seafarers' contracts
for Delta Queen and American Hawaii expire in December 2003 and May 2000,
respectively. Since 1986, we have not experienced any work stoppages, and we
believe relations with our employees are good.

Factors Concerning Forward-Looking Statements

Certain statements in "Risk Factors" and in "Management's Discussion and
Analysis of Financial Condition and Results of Operations" 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 and
assumptions.

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.

RISK FACTORS

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

THE SEC IS CONDUCTING AN INFORMAL INQUIRY OF OUR ACCOUNTING PRACTICES RELATING
TO DIRECT RESPONSE ADVERTISING COSTS

On January 14, 2000, we announced that the SEC is 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 have 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 penalties or sanctions against
us. Depending upon the resulting penalties, sanctions or orders, if any, which
we cannot predict at this time, 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 10 to the
Consolidated Financial Statements.

CONSTRUCTION AND RENOVATION 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. We
have also entered into a contract to acquire and renovate an existing foreign
vessel for use in Hawaii and we have acquired and are converting the Columbia
Queen for Delta Queen to be operated on the Columbia River system. Without these
new ships, our future financial performance may be adversely impacted. 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. We cannot assure you that we will be able to successfully
complete construction, conversion or renovation 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,
conversion or renovation of the new vessels include:



                                       10
<PAGE>   11

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

Our business strategy has been developed on the assumption that we will be able
to put the Hawaii cruise ships and coastal cruisers into service on a timely
basis. We have also assumed that the ships will perform according to their
design specifications. A significant delay in delivering the vessels, completing
the renovation or conversion or a material deviation from the design
specifications could have a material adverse effect on our business. Also,
events out of the control of the shipyards constructing, converting or
renovating 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
and the acquisition and renovation of existing vessels to be put into operation
in both the Hawaii market and the U.S. coastal and inland 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
enough capital may require us to delay or abandon some of our expansion plans
and could have a material adverse effect on our business.

INCREASED LEVERAGE MAY ADVERSELY AFFECT OUR FINANCIAL PERFORMANCE AND CASH FLOW

We will substantially increase our indebtedness 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, 1999, we had outstanding consolidated total long-term debt of
$80.5 million. We intend 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 $470 million;

- construction costs for each of the first two coastal cruisers expected to be
  approximately $35 million;

- acquisition and renovation costs for the ms Patriot expected to be
  approximately $127 to $131 million; and

- renovation, relocation, start-up and marketing costs for the Columbia Queen
  expected to be approximately $25 to $28 million.

We expect that approximately 87.5% of the total cost for the new Hawaii cruise
ships will be financed through Maritime Administration guaranteed private
financing and a substantial portion of Delta Queen's expansion costs may be
financed under a $70 million revolving credit facility from a group of lenders,
with The Chase Manhattan Bank as agent. The seller of the ms Patriot, Holland
America Line, a non-U.S. citizen, has agreed to provide 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 ability to repay debt and reduce
our 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.


                                       11
<PAGE>   12

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 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
business.

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, our
business may be adversely affected.

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.

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 expansion plans. 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 which 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 business. For
a more detailed discussion of the Passenger Vessel Act, see "Business --
General."


                                       12
<PAGE>   13

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 or prices for
cruise vacations. This could result in lower margins and reduce the
profitability of our business.

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 DRYDOCKING ON SCHEDULE OR WITHIN BUDGETS, 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 drydocking. When we drydock 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 drydocking. The S.S.
Independence must be drydocked every 30 months and the Delta Queen vessels must
be drydocked every five years. For its last drydocking, the S.S. Independence
was out of service for 18 days beginning on January 5, 2000. Drydocks of Delta
Queen vessels take place in the winter months when our revenue yield is lowest.
For its last regularly scheduled drydocking, the Mississippi Queen was out of
service for 51 days beginning on December 1, 1995. For its next scheduled
drydocking, we expect the Mississippi Queen to be out of service for a period of
approximately 31 days commencing January 3, 2001. The Delta Queen was out of
service beginning on December 15, 1996 for 30 days for its last scheduled
drydocking. For its next scheduled drydocking, we expect the Delta Queen to be
out of service for a period of 43 days commencing January 4, 2001. The American
Queen, which first entered service in 1995, was out of service for 10 days for
its first drydocking between January 10, 2000 and January 20, 2000. Its next
drydocking will occur in approximately five years. In years that we are not
required to drydock 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 layup. For its
last regularly scheduled layup, the Mississippi Queen was out of service
beginning January 8, 2000 for 17 days. The Delta Queen was out of service
beginning on January 3, 2000 for 67 days. The S.S. Independence does not undergo
layups in years that it is not drydocked. We cannot assure you that future
drydocks or layups for any of our vessels will be completed on schedule or
within their budgets.

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
ship 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.

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.


                                       13
<PAGE>   14

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 40% 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, 1999, the Equity Group
had pledged 4,603,000 of its 7,529,047 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 a 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 which 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 1,893 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:

<TABLE>
<CAPTION>
                                  YEAR VESSEL                PASSENGER          PRIMARY AREAS
VESSEL                         ENTERED INTO SERVICE          CAPACITY           OF OPERATION
------                         --------------------          --------           -------------
<S>                            <C>                           <C>                <C>
S.S. Independence(1)........       1951                         867             Hawaii

American Queen..............       1995                         436             Mississippi River System

Mississippi Queen...........       1976                         416             Mississippi River System

Delta Queen.................       1926                         174             Mississippi River System
</TABLE>

                 (1)      Substantially renovated in 1994.




                                       14
<PAGE>   15

The following table represents a list of the new vessels we currently plan to
build or obtain, together with their estimated delivery dates, 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:
   ms Patriot...........................................   December 2000                      1,214
   Newbuild #1..........................................   January 2003                       1,900
   Newbuild #2..........................................   January 2004                       1,900
Delta Queen Vessels:
   Columbia Queen.......................................   May 2000                             161
   Coastal Cruiser #1...................................   March 2001                            226
   Coastal Cruiser #2...................................   June 2001                             226
</TABLE>


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 is conducting an informal inquiry into our accounting practices with
respect to direct response advertising costs. 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
penalties or sanctions against us. Depending upon the resulting penalties,
sanctions or orders, if any, which we cannot predict at this time, 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.

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

None.


                                       15
<PAGE>   16


                                     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 March 27, 2000, the last
      reported sale price for our common stock was $25.00 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:

                                                               High      Low
         --------------------------------------------------------------------
         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


         QUARTER ENDED:     December 31, 1998 ...........  $  17.63   $  11.38
                            September 30, 1998...........     17.00      12.50
                            June 30, 1998................     24.63      14.75
                            March 31, 1998...............     23.25      17.25



(b) The number of stockholders of record of common stock on March 24, 2000 was
    approximately 641.

(c) We did not pay cash dividends on our common stock during 1998 or 1999. 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.


ITEM 6. SELECTED FINANCIAL DATA

Information with respect to our selected financial data is set forth under
"Selected Financial Data" on page 21.


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Management's discussion and analysis is set forth under "Management's Discussion
and Analysis of Financial Condition and Results of Operations" on page 22.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information required by Item 7A is set forth under "Management's Discussion
and Analysis of Financial Condition and Results of Operations" on page 22.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements and supplementary data are as set forth in
the "Index to Consolidated Financial Statements" on page 20.

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

None.



                                       16
<PAGE>   17


                                    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 21, 2000, not later than April 24, 2000.
Information required by Items 10 through 13 will appear in the Proxy Statement
and is incorporated herein by reference.



                                       17
<PAGE>   18



                                     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
               20.

(a)(2)         Financial Statement Schedules.

               Financial Statement Schedules, except those indicated in the
               "Index to Consolidated Financial Statements" on page 20, 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 50.

(b)            Reports on Form 8-K:

               Form 8-K dated November 2, 1999 announcing our earnings for the
               third quarter of 1999 and our restatement of earnings for the
               first and second quarters of 1999.



                                       18
<PAGE>   19


                                   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 30, 2000
                 --------------

                                                 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.


<TABLE>
<S>                                                <C>
/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/ Joseph P. Sullivan                             Director
-----------------------------------------------
Joseph P. Sullivan


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

</TABLE>


                                       19
<PAGE>   20



                          AMERICAN CLASSIC VOYAGES CO.
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
                                                                                                           Page
                                                                                                          Number
                                                                                                         -------
<S>                                                                                                      <C>
        Selected Financial Data.......................................................................      21
        Management's Discussion and Analysis of Financial Condition and Results of Operations.........      22
        Independent Auditors' Report..................................................................      29
        Consolidated Financial Statements
             Consolidated Balance Sheets..............................................................      30
             Consolidated Statements of Operations....................................................      31
             Consolidated Statements of Cash Flows....................................................      32
             Consolidated Statements of Changes in Stockholders' Equity...............................      33
             Notes to Consolidated Financial Statements...............................................      34
             Financial Statement Schedules
                 Schedule I - Condensed Financial Information of Registrant...........................      46

</TABLE>


                                       20
<PAGE>   21
                          AMERICAN CLASSIC VOYAGES CO.
                             SELECTED FINANCIAL DATA


<TABLE>
<CAPTION>
                                                                         Years Ended December 31,
                                                       1999          1998           1997           1996           1995
                                                   ----------------------------------------------------------------------
<S>                                               <C>             <C>           <C>            <C>            <C>
INCOME STATEMENT DATA
(In thousands)
   Revenues...............................         $  208,717     $  192,225    $  177,884     $  190,408     $  188,373
                                                   ----------------------------------------------------------------------
   Gross profit...........................             74,854         66,630        66,589         67,863         51,895
                                                   ----------------------------------------------------------------------
   One-time charges(1)....................                 --             --            --         38,390          5,900
                                                   ----------------------------------------------------------------------
   Operating income (loss) ...............              1,649          5,486         9,984        (30,465)       (14,535)
                                                   ----------------------------------------------------------------------
   Other income (2).......................                 10            300            --         11,729             --
                                                   ----------------------------------------------------------------------
   Net interest expense and other
   financing costs........................             (4,447)        (5,522)       (5,935)        (7,199)        (4,002)
                                                   ----------------------------------------------------------------------
   Net income (loss)  ....................         $   (1,750)    $      157    $    2,429     $  (17,636)    $   (9,671)
                                                   ----------------------------------------------------------------------

PER SHARE INFORMATION
   Basic earnings (loss) per share........         $    (0.10)    $     0.01    $     0.17     $    (1.28)    $    (0.70)
   Diluted earnings (loss) per share......         $    (0.10)    $     0.01    $     0.17     $    (1.28)    $    (0.70)

   Cash dividends per share...............         $       --     $       --    $       --     $      --      $     0.08

OPERATING STATISTICS
   Fare revenue per passenger night.......         $      230     $      224    $      228     $      216     $      208
   Total revenue per passenger night......         $      323     $      314    $      302     $      287     $      288
   Weighted average operating days(3):
        Delta Queen.......................                342            341           337            347            263
        American Hawaii...................                365            365           337            366            272
   Vessel capacity per day (berths)(4):
        Delta Queen.......................              1,026          1,026         1,026          1,024          1,024
        American Hawaii...................                867            867           844            817          1,594
   Passenger nights(5) ...................            645,196        611,624       588,892        643,891        628,660
   Physical occupancy percentage(6) ......                 97%            92%           94%            98%            90%

BALANCE SHEET DATA (at period end)
(In thousands)
   Total assets...........................         $  293,990     $  212,685    $  210,805     $  211,864     $  247,473
   Current portion of long-term debt......              4,100          4,100         4,100          4,100          3,746
   Long-term debt.........................             80,463         77,388        81,488         85,898        103,272
   Total stockholders' equity.............            129,800         61,907        59,129         54,982         71,413
</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). In 1995, we incurred a $5.9
   million ($0.28 per share - net of tax on both a basic and diluted basis)
   one-time charge that represented costs associated with the introduction of
   the American Queen in June of 1995.

(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)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.

(4)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 and the American Queen can
   accommodate three or four passengers.

(5)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.

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



                                       21
<PAGE>   22



                          AMERICAN CLASSIC VOYAGES CO.
                      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 two cruise lines:
Delta Queen, which owns and operates the American Queen, Mississippi Queen and
Delta Queen steamboats; and American Hawaii, which owns and operates the S.S.
Independence steamship. We have formed a third cruise line, United States Lines,
to operate the ms Patriot and the new Hawaii cruise vessels.

Our revenues are comprised of:

         (1) cruise fares;

         (2) onboard revenues, such as those from gift shops and shore
             excursions; and

         (3) trip cancellation insurance and pre- and post-cruise hotel
             packages.

Additional revenue is also derived from the sale of airplane tickets to and from
points of embarkation or disembarkation. Our cost for air tickets typically
matches the revenue we generate from sales of airline tickets, so we recognize
minimal profits from such sales.

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 drydocking costs for
             our vessels;

         (3) insurance costs;

         (4) commissions paid to travel agents; and

         (5) air ticket 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 layups and drydockings, 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.

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.


                                       22
<PAGE>   23

Selected quarterly data

As a result of seasonality, timing of vessel layups and drydocking and the
factors affecting our revenues, results of operations vary on a quarterly basis.
The following tables set forth selected unaudited quarterly data for 1998 and
1999. We cannot assure you that our historical quarterly results of operations
will be indicative of our future performance. The figures in the tables below
state dollars in thousands, except per share data, fare revenue per passenger
night and percentages.


<TABLE>
<CAPTION>
                                                                                1998 - Quarters Ended
                                                                                ---------------------

                                                              March 31         June 30        September 30     December 31
                                                              --------         -------        ------------     -----------
<S>                                                         <C>              <C>              <C>              <C>
         Revenues .................................         $    40,668      $    53,535      $    50,920      $    47,102
         Gross profit..............................              11,209           20,562           18,184           16,675
         Operating (loss) income ..................              (6,143)           4,037            3,798            3,794
         Net (loss) income.........................              (4,362)           1,574            1,454            1,491
         Diluted (loss) income per share...........               (0.31)            0.11             0.10             0.10
         Fare revenue per passenger night..........                 211              231              222              230
         Physical occupancy percentage.............                  87%              97%              95%              88%
</TABLE>


<TABLE>
<CAPTION>
                                                                                1999 - Quarters Ended
                                                                                ---------------------
                                                                March 31       June 30        September 30     December 31
                                                               --------        -------        ------------     -----------
<S>                                                         <C>              <C>              <C>              <C>
         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
         Net (loss) income.........................              (6,283)           2,475            2,091              (33)
         Diluted (loss) income per share...........               (0.44)            0.14             0.11             0.00
         Fare revenue per passenger night..........                 209              236              231              238
         Physical occupancy percentage.............                  90%              98%             102%              97%
</TABLE>

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 No. 93-7, "Reporting on Advertising
Costs," or SOP 93-7, 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 $2.3 million, or $0.13 per share.


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

<TABLE>
<CAPTION>
                                                      1999         1998           1997
                                                     --------    --------     ---------
<S>                                                  <C>         <C>          <C>
    Revenues.......................................     100%        100%          100%
    Costs and expenses:
      Operating expenses...........................      64          65            62
      Selling, general and administrative..........      27          23            23
      Depreciation.................................       8           9             9
    Operating income ..............................       1           3             5
    Net income (loss)..............................      (1)          0             1
</TABLE>


                                       23
<PAGE>   24


The following discusses our consolidated results of operations and financial
condition for the years ended December 31, 1999, 1998 and 1997 (referred to
herein as 1999, 1998 and 1997).

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 represents 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
105% while fare per diems of $185 were consistent with the prior year. Delta
Queen's fare revenues increased $7.5 million. Occupancy rates increased 4% to
89% and fare per diems increased 5% to $277. As a result, consolidated fare per
diems for 1999 increased 3% to $230. 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 $323.

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 selling, general and administrative expenses, before capacity
expansion expenses, increased $10.3 million to $52.2 million for 1999 from $41.9
million in 1998. The increase in selling, general and administrative expenses
reflects additional selling and marketing spending at both cruise lines during
the year. Of the additional marketing spending during the year, 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. Capacity expansion
costs of $4.6 million in 1999 were $2.3 million higher than in the prior year.
Beginning in the third quarter of 1999, marketing and public relations expenses
for the Columbia Queen were incurred, which amounted to $1.5 million. The
remainder of the increase is attributable to salary and benefits associated with
new personnel hired during 1999 in connection with our capacity expansion.

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.

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997

Consolidated revenues for 1998 increased $14.3 million to $192.2 million from
$177.9 million for 1997. This represents a $2.7 million increase in fare
revenues combined with an $11.6 million increase in other revenues. American
Hawaii's fare revenues increased $4.1 million on a 14% increase in passenger
nights mainly due to an 11% increase in capacity associated with additional
operating days in 1998. The number of operating days was higher in 1998 than in
1997 because the S.S. Independence was out of service for a four-week drydock in
1997. American Hawaii's fare per diems, however, decreased by 5%. Delta Queen's
fare revenues decreased $1.4 million, attributable to a 5% decrease in
occupancy, offset by a 3% increase in fare per diems. Consolidated fare per
diems for 1998 decreased 2% to $224, as the decrease in fare per diems at
American Hawaii more than offset the increase in fare per diems at Delta Queen.
The $11.6 million increase in other revenues was mainly due to an increase in
passenger nights at American Hawaii and an increase in passengers electing to
purchase air through American Hawaii under various air promotions. As a result,
consolidated total revenue per passenger night increased 4% to $314. As
discussed below, the increase in air revenue was offset by a corresponding
increase in related air expenses.

                                       24
<PAGE>   25

Consolidated cost of operations for 1998 increased $14.3 million to $125.6
million from $111.3 million for 1997. American Hawaii's operating costs
increased $15.0 million primarily as a result of additional operating days and
an increase in air package expenses. The increase in air package expenses was
directly related to the increase in air revenue, as noted above. Delta Queen's
operating costs decreased by $0.7 million reflecting the decrease in occupancy.

Consolidated selling, general and administrative expenses, before capacity
expansion costs, increased $2.0 million to $41.9 million for 1998 from $39.9
million in 1997. The increase in selling, general and administrative expenses
reflects additional selling and marketing spending at both cruise lines in the
first half of the year. Capacity expansion costs of $2.3 million in 1998 were
$1.2 million higher than in the prior year. Capacity expansion expenses were
incurred for a full year during 1998 for both cruise lines, whereas in 1997,
these expenses were incurred in the second half of the year for American Hawaii
only. The $1.3 million increase in depreciation and amortization expense was
attributable to capital expenditures incurred during the 1997 S.S. Independence
drydock and Delta Queen vessel lay-ups completed earlier in 1998.

As a result of increases in expenses as detailed above, consolidated operating
income for 1998 was $5.5 million as compared to $10.0 million for 1997.

Interest expense decreased slightly due to a lower outstanding debt balance
during 1998 while our effective tax rate remained unchanged from the prior year.

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION

Operating Activities

For the year ended December 31, 1999, cash provided by operations, before
changes in unearned passenger revenue, was $24.8 million compared to $12.9
million in 1998. The 1999 increase reflects the accrued, but unpaid as of
December 31, 1999, costs for layups and drydockings, employee bonuses, and
financing fees and changes in other working capital accounts. The increase in
unearned passenger revenues was greater in 1998 than in 1999 due to (1) S.S.
Independence drydock in January 2000, as discussed below, and (2) deposits
received in 1998 for the millennium charter cruises.

Investing Activities

Our capital expenditures of $79.9 million included $71.6 million for vessels
under construction which is comprised mainly of payments to shipyards. Other
capital costs for the new shipbuilding programs include technical design,
engineering and architectural fees. For the Hawaii cruise ships under
construction, we have spent $53.5 million during 1999, while $18.1 million was
spent in 1999 on the Columbia Queen and Delta Queen coastal vessels projects.
Other capital expenditures of $8.3 million were mainly related to our existing
vessels such as layups for our Delta Queen vessels, which were completed earlier
in 1999, and spending in preparation for the S.S. Independence drydock, which
occurred in January 2000.

Financing Activities

We made scheduled principal payments of $4.1 million under the American Queen
and S.S. Independence ship financing notes, borrowed $12.2 million under our
credit facility and repaid $5.0 million of those borrowings. In the second
quarter of 1999, we completed a public offering of an additional 4,025,000
shares of common stock. The net proceeds to us, after offering expenses, were
approximately $63.5 million and are being used for construction of the initial
Hawaii vessel. Additional proceeds from the issuance of common stock were
received from employee stock option exercises. We also paid $3.1 million for
financing efforts related to our new credit facility, Maritime Administration
financing, and ms Patriot financing, as discussed below.

Capital Expenditures and Debt

For the Hawaii cruise market, we are constructing two new cruise ships over the
next five years and plan to introduce an existing foreign-built cruise ship, the
ms Patriot, which we have a contract to acquire, in the Hawaii market prior to
delivery of the new vessels. On March 9, 1999, we signed a definitive agreement
with Ingalls Shipbuilding to construct two passenger ships, each containing
approximately 1,900 passengers berths, with options to build up to four
additional vessels. The estimated construction cost of the two initial ships,
inclusive of shipyard contract price, shipyard incentives, furniture, fixtures,
and owner-furnished equipment, will be approximately $470 million each. The
agreement provides that the first ship will be delivered in January 2003 and the
second ship in January 2004. Over the next twelve months, we



                                       25
<PAGE>   26

expect to spend approximately $200 million on building the two new Hawaii cruise
vessels, which includes anticipated payments to Ingalls Shipbuilding.

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 up to 87.5% of the cost of the
vessels. The guaranteed debt will be accessed during the construction period,
with interest payments during that period capitalized as part of the cost of
construction. In the current market, this type of debt generally bears interest
at a rate of 100 to 150 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 a straight line 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 Maritime Administration guaranteed financing
and will be capitalized as part of the vessel cost. On February 10, 2000, we
issued $25 million of one year notes guaranteed by the Maritime Administration.
These notes bear interest at the London Interbank Offered Rate, or LIBOR, minus
0.05%.

On October 15, 1999, we finalized an agreement with Holland America Line to
purchase the ms Nieuw Amsterdam for $114.5 million. The purchase agreement
required us to make an earnest money deposit of $18 million by October 18, 1999
and an additional $12 million by January 17, 2000. We arranged for an unsecured
letter of credit facility with The Chase Manhattan Bank for up to $30 million
and have satisfied the deposit requirements by posting letters of credit for $18
million and $12 million. Outstanding letters of credit under this facility bear
a fee equal to 0.25% per annum if we deposit cash collateral to secure the
letter of credit and 2.125% per annum if we do not have cash collateral. We are
also required to pay a commitment fee of 0.375% per annum on the unused portion
of the facility.

Persons and entities affiliated with Equity Group, our largest stockholder,
guaranteed the letter of credit facility to The Chase Manhattan Bank thereby
allowing us to obtain the facility from its inception until February 22, 2000.
We paid Equity Group a commitment fee of $0.5 million and agreed to pay Equity
Group additional compensation contingent upon appreciation in our common stock.
Equity Group's rights to receive this additional compensation vested, on a
monthly basis, during the period that the guarantee remained outstanding. Equity
Group may exercise its rights to receive such payment in the fourth and fifth
years, subject to our right to pay such additional fee at any time within the
next three years at escalating amounts and tied to the rights vested by Equity
Group. On February 22, 2000 we deposited $30 million into a cash collateral
account with Chase from proceeds received by us from our securities offerings,
as discussed below, thereby terminating the Equity Group guarantee. We intend to
pay to Equity Group amounts attributable to the vested rights by October 2000.

In addition, Holland America Line has agreed to provide financing for the
remaining portion of the purchase price totaling $84.5 million for 75 months at
the prevailing prime rate. The Holland America Line financing will be secured by
a first preferred ship mortgage. Prior to introducing the ms Patriot into
service in December 2000, we expect to spend approximately $12 to $16 million on
improvements to the ship. This will be funded from cash on hand or funds from
operations.

We entered into a construction contract, as of May 1999, with Atlantic Marine,
Inc. of Jacksonville, Florida to construct the first two coastal cruise vessels
for our Delta Queen line. Under the construction contract, the price of the
vessels will be $30 million each. We expect each coastal cruise vessel to have a
total project cost, including furnishing, fixtures and equipment, of
approximately $35 million. The coastal cruise vessels will be approximately 300
feet long and provide accommodations for up to 226 passengers. The contract
provides that the delivery date will be March 2001 for the first vessel and June
2001 for the second vessel. 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.

Over the next twelve months, we expect to spend approximately $35 million to $40
million on building the new coastal cruise vessels, which also includes
anticipated payments to Atlantic Marine. We have applied to the Maritime
Administration for financing guarantees for the two coastal cruise vessels now
under construction.



                                       26
<PAGE>   27

In May 1999, we acquired a substantially complete riverboat originally built for
the casino trade that we are converting and will operate as the fourth Delta
Queen riverboat. We expect that vessel, which will be known as the Columbia
Queen, will enter service in May 2000 operating weekly cruise vacations out of
Portland on the Columbia River system. We originally entered into an agreement
with Nichols Bros. Boat Builders, Inc. to renovate the Columbia Queen. However,
we recently terminated that agreement and entered into an agreement with Cascade
General, Inc. to convert the 218 foot boat into an overnight passenger vessel
with 161 passenger berths. We paid $3.2 million to acquire the vessel and
estimate that the total renovation, relocation, start-up and marketing costs,
inclusive of the $14 million contract with Cascade General, to be $25 million to
$28 million.

In February 1999, The Delta Queen Steamboat Co. entered into a credit agreement
with a group of lenders, with The Chase Manhattan Bank as agent. This credit
agreement provides for a revolving credit facility of up to $70 million to fund
the expansion of our Delta Queen line. This $70 million facility replaced our
prior credit facility with Chase Manhattan. Borrowings under the new credit
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 1.50%, or (2) the
London Interbank Offered Rate plus a margin ranging from 1.50% to 2.50%. We are
also charged a fee of 0.50% per annum on any unused commitment. The new credit
facility is secured by all of the assets of The Delta Queen Steamboat Co.,
except for the American Queen. The new credit facility limits the dividends The
Delta Queen Steamboat Co. may pay to between $5 million and $15 million per year
when aggregated with investments and other payments.

On February 22, 2000 we completed an offering of an additional 2,000,000 shares
of common stock. The proceeds to us, after underwriting commissions, were $47.1
million and are being used for construction of the second Hawaii vessel. The
underwriters' overallotment option of 300,000 additional shares was not
exercised.

On February 22, 2000 we also 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
proceeds to us, after underwriting fees, were $96.8 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.

In the first quarter of 2000, the three existing Delta Queen vessels' lay-ups
were completed which cost 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 drydocking, the
S.S. Independence was out of service for 18 days beginning January 5, 2000. This
drydocking cost approximately $5.9 million, including capital expenditures,
repairs and maintenance and was funded from cash on hand.

As of December 31, 1999, we complied with all covenants under our various debt
agreements.

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. 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 from the
capital markets to satisfy our financial obligations relating to construction of
the new vessels, and to acquire, renovate and introduce the ms Patriot into
service, we cannot assure you that we 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.

OTHER MATTERS

Stock Repurchase Plan

In June 1997, our board of directors approved a stock repurchase plan. The plan
authorizes us to repurchase up to one million shares of our stock. These shares
may be purchased from time to time in the public market or through privately
negotiated transactions. As of December 31, 1998, we had repurchased 51,000
shares at an average purchase price of $14.84 per share under the plan. We have
not purchased any additional shares since then and currently have no intention
to repurchase any additional shares of common stock.


                                       27
<PAGE>   28



Recent Accounting Pronouncements

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Standards No. 131 "Disclosure about Segments of an Enterprise and
Related Information," which requires the reporting of certain information about
operating segments and related disclosures about products and services,
geographic areas, and major customers. We have reviewed Statement of Financial
Standards No. 131 and have determined that we operate as a single business
segment.

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. While we currently have no derivative financial instruments and do not
currently engage in hedging activities, we may engage in derivative and hedging
activities in the future, and therefore would be affected by the pronouncement.
The impact of SFAS No. 133 on our 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.

Year 2000

Many computer programs were written using two digits rather than four to define
the applicable year. As a result, on January 1, 2000, any of our computer
programs that had time sensitive software might have recognized a date using "0"
as the year 1900 rather than the year 2000.

We previously established internally staffed project teams to address Year 2000
issues. Each team formulated a plan that focused on Year 2000 compliance efforts
for information technology systems and non-information technology systems. This
plan addressed (1) information technology systems software and hardware such as
reservations, accounting and associated systems, personal computers and software
and (2) non-information technology systems such as embedded chip systems in
building facilities, shipboard navigation, control, power generation systems,
and communication systems.

Our total costs for system improvements and the Year 2000 project were
approximately $0.9 million. These efforts were funded from working capital. Of
the total project cost, approximately $0.5 million was attributable to the
implementation of a new accounting system. This amount included new software,
new hardware, consulting fees and maintenance, of which $0.3 million was
capitalized or classified as prepaid maintenance. Another $0.1 million of
capital outlays was attributable to the upgrading of the S.S. Independence's
onboard financial system. The remaining $0.3 million was expensed as incurred
and did not have a material impact on the results of operations. The Year 2000
project represented less than 10% of our information systems budget.

We have adopted contingency plans to identify and determine how to handle our
most probable worst case scenarios. To date, we have not experienced any
material disruptions due to Year 2000 problems.

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, 1999, our long-term
variable rate debt had a carrying value of $31.6 million.

We will be issuing up to $1.1 billion in 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. On February 10, 2000, we
issued $25 million of one-year notes, which bear interest at LIBOR minus 0.05%.

We may manage our interest rate risk through interest rate hedging techniques.
However, we currently do not use such techniques. Should we use 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 food and fuel 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.


                                       28
<PAGE>   29
                          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, 1999 and 1998, 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, 1999. In
connection with our audits of the consolidated financial statements, we also
have audited the financial statement schedule. These consolidated financial
statements and financial statement schedule 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 schedule based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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, 1999 and 1998 and the results of
their operations and their cash flows for each of the years in the three-year
period ended December 31, 1999, in conformity with generally accepted accounting
principles. Also, in our opinion, the related financial statement schedule, 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 28, 2000


                                       29
<PAGE>   30
                          AMERICAN CLASSIC VOYAGES CO.
                           CONSOLIDATED BALANCE SHEETS
                   (In thousands except shares and par value)


<TABLE>
<CAPTION>
                                                                                        December 31,
                                                                                      1999         1998
                                                                                   -----------------------
<S>                                                                                <C>          <C>
ASSETS
Cash and cash equivalents ......................................................   $  42,399    $  27,004
Restricted short-term investments ..............................................         289           60
Accounts receivable ............................................................       1,205        1,989
Inventory ......................................................................       2,529        2,413
Prepaid air tickets ............................................................       1,930        2,527
Prepaid expenses and other current assets ......................................       3,491        4,006
                                                                                   ----------------------
     Total current assets ......................................................      51,843       37,999
                                                                                   ======================

Property and equipment, net ....................................................     150,797      159,079
Vessels under construction .....................................................      74,601        3,050
Deferred income taxes, net .....................................................      12,446       10,011
Other assets ...................................................................       4,303        2,546
                                                                                   ----------------------
     Total assets ..............................................................   $ 293,990    $ 212,685
                                                                                   ======================

LIABILITIES
Accounts payable ...............................................................   $  14,534    $  13,493
Other accrued liabilities ......................................................      23,712       16,500
Current portion of long-term debt ..............................................       4,100        4,100
Unearned passenger revenues ....................................................      41,381       39,297
                                                                                   ----------------------
     Total current liabilities .................................................      83,727       73,390

Long-term debt, less current portion ...........................................      80,463       77,388
                                                                                   ----------------------
     Total liabilities .........................................................     164,190      150,778
                                                                                   ======================

COMMITMENTS AND CONTINGENCIES (NOTE 5)

STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value (5,000,000 shares authorized, none
   issued and outstanding) .....................................................        --           --
Common stock, $0.01 par value (40,000,000 and 20,000,000 shares authorized,
   respectively; 18,653,206 and 14,293,931 shares issued,
   respectively) ...............................................................         187          143
Additional paid-in capital .....................................................     151,094       80,451
Accumulated deficit ............................................................     (19,573)     (17,823)
Common stock in treasury, at cost (51,000 shares) ..............................        (757)        (757)
Unearned restricted stock and stock units ......................................      (1,151)        (107)
                                                                                   ----------------------
     Total stockholders' equity ................................................     129,800       61,907
                                                                                   ----------------------
                                                                                   $ 293,990    $ 212,685
                                                                                   ======================
</TABLE>


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



                                       30
<PAGE>   31


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




<TABLE>
<CAPTION>
                                                                                  Years Ended December 31,
                                                                               1999         1998         1997
                                                                            -----------------------------------
<S>                                                                         <C>          <C>          <C>
Revenues ......................................................             $ 208,717    $ 192,225    $ 177,884

Cost of operations (exclusive of depreciation shown below).....               133,863      125,595      111,295
                                                                            -----------------------------------

Gross profit ..................................................                74,854       66,630       66,589

Selling, general and administrative expenses ..................                56,765       44,232       41,015
Depreciation expense ..........................................                16,440       16,912       15,590
                                                                            -----------------------------------

Operating income ..............................................                 1,649        5,486        9,984

Interest income ...............................................                 3,102        1,117        1,028
Interest expense and other financing costs ....................                 7,549        6,639        6,963
Other income ..................................................                    10          300         --
                                                                            -----------------------------------

(Loss) income before income taxes .............................                (2,788)         264        4,049

Income tax benefit (expense) ..................................                 1,038         (107)      (1,620)
                                                                            -----------------------------------

Net (loss) income .............................................             $  (1,750)   $     157    $   2,429
                                                                            ===================================

PER SHARE INFORMATION
Basic:
     Weighted-average shares outstanding ......................                17,167       14,137       13,952
     Earnings (loss) per share ................................             $   (0.10)   $    0.01    $    0.17

Diluted:
     Weighted-average shares outstanding ......................                17,167       14,777       14,338
     Earnings (loss) per share ................................             $   (0.10)   $    0.01    $    0.17
</TABLE>


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



                                       31
<PAGE>   32



                          AMERICAN CLASSIC VOYAGES CO.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)


<TABLE>
<CAPTION>
                                                                       Years Ended December 31,
                                                                     1999       1998        1997
                                                                  --------------------------------
<S>                                                               <C>         <C>         <C>
OPERATING ACTIVITIES
     Net (loss) income ........................................   $ (1,750)   $    157    $  2,429

ADJUSTMENTS TO RECONCILE
NET (LOSS) INCOME TO NET CASH PROVIDED
BY OPERATING ACTIVITIES
     Depreciation expense .....................................     16,440      16,912      15,590
     Gain on sale of assets ...................................       --          (300)       --
     Changes in certain working
         capital accounts and other
              Accounts receivable .............................        784        (690)      2,435
              Accounts payable ................................      1,039        (789)      3,599
              Other accrued liabilities .......................      8,210        (529)     (5,344)
              Other assets ....................................     (1,050)       (258)      1,576
              Unearned passenger revenues .....................      2,084       5,584       2,044
              Prepaid expenses and other ......................      1,103      (1,563)         85
                                                                  --------------------------------
     Net cash provided by operating activities ................     26,860      18,524      22,414
                                                                  --------------------------------

INVESTING ACTIVITIES
     (Increase) decrease in restricted investments ............       (229)        265       2,632
     Capital expenditures .....................................    (79,866)     (8,789)    (22,326)
     Proceeds from sale of assets .............................       --           300       1,830
                                                                  --------------------------------
     Net cash used in investing activities ....................    (80,095)     (8,224)    (17,864)
                                                                  --------------------------------

FINANCING ACTIVITIES
     Proceeds from borrowings .................................     12,200        --          --
     Repayments of borrowings .................................     (9,125)     (4,100)     (4,410)
     Purchase of common stock .................................       --          (757)       --
     Issuance of common stock .................................     68,697       2,907       1,139
     Deferred financing fees ..................................     (3,142)       (533)       --
                                                                  --------------------------------
     Net cash provided by (used in) financing activities ......     68,630      (2,483)     (3,271)
                                                                  --------------------------------

     Increase in cash and cash equivalents ....................     15,395       7,817       1,279
     Cash and cash equivalents, beginning of period ...........     27,004      19,187      17,908
                                                                  --------------------------------
     Cash and cash equivalents, end of period .................   $ 42,399    $ 27,004    $ 19,187
                                                                  ================================

SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
     Cash paid during the period for:
         Interest (net of capitalized interest) ...............   $  4,189    $  6,438    $  6,791
         Income taxes .........................................   $    258    $    232    $    249
</TABLE>


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


                                       32
<PAGE>   33
                          AMERICAN CLASSIC VOYAGES CO.
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                                         Unearned
                                                                Additional                              Restricted        Total
                                                    Common       Paid-in    Accumulated    Treasury   Stock and Stock  Stockholders'
                                                     Stock       Capital      Deficit        Stock        Units           Equity
                                                   ---------   -----------  - ---------    ---------  ---------------  ------------
<S>                                                <C>          <C>          <C>          <C>          <C>              <C>
Balance, December 31, 1996 .....................   $     139    $  75,252    $ (20,409)   $    --      $    --          $  54,982
Net income .....................................        --           --          2,429         --           --              2,429
Stock units issued to Directors, net ...........        --            219         --           --            (90)             129
Stock issued under option and benefit plans ....           1        1,588         --           --           --              1,589
                                                   ---------    ---------    ---------    ---------    ---------        ---------
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
                                                   =========    =========    =========    =========    =========        =========
</TABLE>



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



                                       33
<PAGE>   34
                          AMERICAN CLASSIC VOYAGES CO.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

American Classic Voyages Co., 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 and Delta
Queen steamboats which conduct overnight cruise operations on certain U.S.
inland waterways. Delta Queen will also operate the Columbia Queen following its
construction, beginning in the spring of 2000. 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. American Hawaii also owned the S.S. Constitution steamship
which was removed from service in June 1995 and was sold on November 4, 1997.
Project America Inc., doing business as United States Lines ("USL"), through its
subsidiaries, will own and operate the ms Patriot and the new Hawaii vessels.

PRINCIPLES OF CONSOLIDATION

The accompanying Consolidated Financial Statements include the accounts of
American Classic Voyages Co. ("AMCV") and its wholly owned subsidiaries,
including The Delta Queen Steamboat Co. ("DQSC"), Great Hawaiian Cruise Line,
Inc. ("GHCL") and Project America, Inc. (collectively with such subsidiaries,
the "Company"). The accompanying Consolidated Financial Statements have been
prepared in accordance with generally accepted accounting principles. All
significant intercompany accounts and transactions have been eliminated in
consolidation. Certain previously reported amounts have been reclassified to
conform to the 1999 presentation.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. 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

As of December 31, 1998, restricted short-term investments reflected cash
pledged as collateral on outstanding letters of credit related to certain
contracts with vendors. As of December 31, 1999, restricted short-term
investments also reflected amounts in escrow related to the construction of the
Columbia Queen.

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 consists 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 drydock. 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 drydock expenditures
relating to vessel improvements or betterments are capitalized. In addition,
lay-up and drydock expenditures relating to cleaning, repairs and maintenance
are accrued evenly over the period to the next scheduled lay-up and/or drydock
and are based on the best available estimate of total costs. The accrual for
these costs is included in other accrued liabilities and was $5.1 million and
$2.4 million at December 31, 1999 and 1998, respectively. The Company reviews
long-lived assets, identifiable intangibles, goodwill, and reserves for
impairment whenever events or changes in circumstances indicate the carrying
amount of the assets may not be fully recoverable.


                                       34
<PAGE>   35

VESSELS UNDER CONSTRUCTION

Vessels under construction consists mainly of payments to shipyards as part of
the Company's various new shipbuilding programs (See Note 5 for further
information). Additional capitalized costs include technical design,
engineering, and architectural fees. Interest costs associated with the vessels
under construction are capitalized during the construction period and were $2.3
million for the year ended December 31, 1999. No interest costs were capitalized
in 1998.

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 other assets and liabilities.

REVENUE AND EXPENSE RECOGNITION

The Company generally receives passenger fares up to 60 days prior to the cruise
date and 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. 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 INFORMATION

Basic earnings per share is computed by dividing net income by the
weighted-average number of common shares outstanding. Diluted earnings per share
is computed in a similar manner except that the denominator is increased to
include dilutive potential common shares from stock options and stock units. See
Note 2 for a reconciliation of basic and diluted earnings per share.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments include restricted short-term investments,
accounts receivable, accounts payable, other accrued expenses and long-term
debt. At December 31, 1999 and 1998, the fair values of all financial
instruments were not materially different from their carrying or contract
values.

STOCK-BASED COMPENSATION PLANS

The Company has elected to account for employee stock-based compensation plans
in accordance with Accounting Principles Board Opinion No. 25, as permitted
under Statement of Financial Standards ("SFAS") No. 123, "Accounting for
Stock-Based Compensation". See Note 8 for pro forma effect for the fair value
accounting method, as defined in SFAS No. 123.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS No.
131 "Disclosure about Segments of an Enterprise and Related Information", which
requires the reporting of certain information about operating segments and
related disclosures about products and services, geographic areas, and major
customers. The Company has reviewed SFAS No. 131 and has determined that the
Company operates as a single business segment.

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. While we currently have no derivative financial instruments and do not
currently engage in hedging activities, we may engage in derivative and hedging
activities in the future, and therefore would be affected by the pronouncement.
The impact of SFAS No. 133 on our consolidated financial statements, however,
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.

RISK 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 there is no concentration of
risk with any single customer or supplier, or small group of customers or
suppliers, whose failure or non-performance would materially affect the
Company's results.


                                       35
<PAGE>   36


NOTE 2.  EARNINGS PER SHARE

The earnings per share reconciliations presented below for the years ended
December 31, 1998 and 1997 have been prepared pursuant to the requirements of
SFAS No. 128 (in thousands, except per share amount):



<TABLE>
<CAPTION>
                                                                   Years Ended December 31,
                                                            1998                            1997
                                           ----------------------------------   ---------------------------------
                                                                        Per                                  Per
                                            Numerator    Denominator   Share     Numerator    Denominator   Share
                                           ----------------------------------   ---------------------------------
<S>                                        <C>           <C>           <C>      <C>           <C>          <C>
Basic earnings per share...................    $157      14,137         $0.01    $2,429        13,952       $0.17
                                                                        =====                               =====

Additional shares assuming exercise of
dilutive stock options and immediate
vesting of stock units.....................     --          640                    --             386
                                               ----      ------                  ------        ------
Diluted earnings per share.................    $157      14,777         $0.01    $2,429        14,338       $0.17
                                               ====      ======         =====    ======        ======       =====
</TABLE>

For the years ended December 31, 1998 and 1997, options to purchase 858,000 and
523,000 shares of common stock, respectively, at prices ranging from $15.00 to
$20.00 were outstanding during 1998 and 1997, but were not included in the
computation of diluted earnings per share because the options' exercise prices
were greater than the average market prices of the common shares.

As the Company reported a net loss for the year ended December 31, 1999, diluted
earnings per share was computed in the same manner as basic earnings per share.
Therefore, at December 31, 1999, outstanding options to purchase 3,433,660
shares of common stock at prices ranging from $3.25 to $29.13, were not included
in the computation of diluted earnings per share.

NOTE 3. PROPERTY AND EQUIPMENT

Property and equipment consisted of (in thousands):


                                                December 31,
                                              1999         1998
                                            ----------------------
Vessels .................................   $ 222,666    $ 218,649
Buildings and leasehold improvements ....       7,779        7,704
Construction-in-progress ................       3,278          813
Other ...................................       9,122        7,706
                                            ----------------------
                                              242,845      234,872
Less accumulated depreciation ...........     (92,048)     (75,793)
                                            ----------------------
                                            $ 150,797    $ 159,079
                                            ======================

During 1999, $0.3 million of leasehold improvements were written-off along with
$0.2 million of related accumulated depreciation. During 1998, $1.4 million of
leasehold improvements were written-off along with $0.5 million of related
accumulated depreciation upon the amendment to the lease covering the Company's
Chicago headquarters facilities. The company was extended a credit for future
rent by the landlord for the value of the undepreciated leasehold improvements
(See Note 8 for further information).


                                       36
<PAGE>   37
NOTE 4. LONG-TERM DEBT


Long-term debt consisted of (in thousands):

<TABLE>
<CAPTION>
                                                                                   December 31,
                                                                                  1999       1998
                                                                                --------------------
<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 ...............................................   $14,385   $16,809

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 ...................................................     7,926     9,248

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 ...................................................     2,124     2,478

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

Revolving credit facility (maximum availability of $70 million) ..............     7,175      --
                                                                                 -----------------
                                                                                  84,563    81,488
Less current portion .........................................................     4,100     4,100
                                                                                 -----------------
                                                                                 $80,463   $77,388
                                                                                 =================
</TABLE>


Required principal payments on long-term debt are $4.1 million for each of the
years from 2000 to 2003. Required principal payments on long-term debt in 2004
is $11.3 million. See Note 11 for further information. For the years ended
December 31, 1999 and 1998, the weighted-average interest rate on outstanding
borrowings was approximately 7.6% and 7.0%, respectively.

The American Queen Series and the Independence Series A and B debt are
guaranteed by the U.S. Government through the Maritime Administration ("MARAD")
and are secured by first mortgages on the American Queen and the S.S.
Independence, respectively. These Series contain various covenants which, among
other things, require the compliance with certain financial ratios at the end of
each year.

Upon the issuance of the Independence Series A and B debt in 1995 and 1996, $2.2
million was deposited into an account representing six months of debt service.
The debt service deposit was released to the Company in 1997 as GHCL had met the
required cash flow and debt to equity ratios as of December 31, 1996.

As of December 31, 1996, the Company's restricted short-term investments
included an escrow account for remaining American Queen construction costs in
the amount of $0.3 million, which was released to the Company in October 1997
and was used to pay down the principal balance of the American Queen Series.

In the first quarter of 1999, DQSC, as borrower, closed on a new long-term
credit facility with The Chase Manhattan Bank, as agent, and several participant
banks (the "Chase Facility"). The Chase Facility, which is a $70 million
revolving credit facility maturing in February 2004, replaces the previous
credit facility with Chase Manhattan. Borrowings under the new facility bear
interest at a rate, at the option of DQSC, equal to either (1) the greater of
Chase's prime rate or certain alternative base rates plus a margin ranging from
0.50% to 1.50%, or (2) LIBOR plus a margin ranging from 1.50% to 2.50%. DQSC is
also required to pay an unused commitment fee at a rate of 0.50% per annum.


                                       37
<PAGE>   38

The Chase Facility will be used for the conversion of the fourth Delta Queen
riverboat, the construction of the first two coastal vessels, and Delta Queen
working capital. The new facility is secured by all of the assets of DQSC except
the American Queen, and has various limitations and restrictions on investments,
additional indebtedness, the construction costs of the new vessels, and other
capital expenditures. The Chase Facility also limits dividends by DQSC, when
aggregated with investments and certain other payments, to amounts ranging from
$5 million to $15 million per annum. DQSC is required to comply with certain
financial covenants, including maintenance of minimum interest coverage ratios
and maximum leverage ratios.

On April 8, 1999, the Company received a commitment from the Maritime
Administration for up to $1.1 billion in financing guarantees. The commitment
amount represents 87.5% of the total cost of the initial two Hawaii vessels,
including shipyard costs, capitalized interest, and fees. See Note 11 for
further information.

As of December 31, 1999, the Company complied with all covenants under its
various debt agreements.

NOTE 5. 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 headquarters is maintained
pursuant to an assignment from local authorities. The Company paid approximately
$168,000, $165,000 and $160,000 under this arrangement for the years ended
December 31, 1999, 1998 and 1997, 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, 1999, 1998 and 1997 was approximately $662,000, $842,000 and
$916,000, respectively.

The future minimum lease commitments for the next five years and thereafter
under all noncancelable operating leases, excluding assignment payments, as of
December 31, 1999, are $411,000, $428,000, $415,000, $385,000, $271,000 and $0.

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 and are currently estimated to cost $440
million each, plus approximately $30 million each for furnishings, fixtures and
equipment. The contract provides that Ingalls Shipbuilding will deliver the
first new ship in January 2003 and the second ship in January 2004. 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

The Company entered into a construction contract, as of May 1, 1999, with
Atlantic Marine, Inc. of Jacksonville, Florida to construct at least two coastal
cruise vessels for its Delta Queen line. This contract is the culmination of the
previously announced plans to build a series of up to five new vessels to
provide cruises along U.S. coastal waterways. Under the construction contract,
the contract price of the vessels will be $30 million each and will have a total
project cost, including Company provided furnishings, fixtures and equipment, of
approximately $35 million. The coastal cruise vessels will be approximately 300
feet long and provide accommodations for up to 226 passengers. The contract
provides that the delivery date will be March 2001 for the first vessel and June
2001 for the second vessel. 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.


                                      38
<PAGE>   39


RIVERBOAT ACQUISITION

In May 1999, the Company acquired a substantially complete riverboat originally
built for the casino trade that the Company will convert and operate as the
fourth Delta Queen riverboat. The Company expects the vessel, which will be
known as the Columbia Queen, will enter service in May 2000 operating weekly
cruise vacations out of Portland on the Columbia River system. The Company
originally entered into an agreement with Nichols Brothers Boat Builders, Inc.
to renovate the Columbia Queen. However, the Company recently terminated that
agreement and entered into an agreement with Cascade General, Inc. to convert
the 218 foot boat into an overnight passenger vessel with 161 passenger berths.
The Company paid $3.2 million to acquire the vessel and estimates the total
renovation, relocation, start-up and marketing costs, inclusive of the $14
million contract with Cascade General, to be $25 million to $28 million.

SHIP PURCHASE

On October 15, 1999, the Company finalized an agreement with Holland America
Line to purchase the ms Nieuw Amsterdam for $114.5 million. The 1,214 passenger
cruise ship is expected to be transferred to the Company in the Fall of 2000 and
will be operated in the Hawaiian Islands by USL as a U.S.-flag vessel named the
ms Patriot. The purchase agreement required the Company to make an earnest money
deposit of $18 million by October 18, 1999 and an additional $12 million by
January 17, 2000. The Company arranged for an unsecured letter of credit
facility with Chase Manhattan Bank for up to $30 million and satisfied the first
deposit requirement by posting an $18 million letter of credit. Outstanding
letters of credit under this facility bear a fee equal to 0.25% per annum if the
Company deposits cash collateral to secure the letter of credit and 2.125% per
annum if the Company does not post cash collateral. The Company is also required
to pay a commitment fee of 0.375% per annum on the unused portion of the
facility.

Persons and entities affiliated with Equity Group Investments, Inc. ("EGI"), the
Company's largest shareholder, guaranteed the letter of credit facility to Chase
Manhattan Bank, thereby allowing the Company to obtain the facility. The Company
has paid EGI a commitment fee of $0.5 million and has agreed to pay EGI
additional compensation contingent upon appreciation in the Company's common
stock. EGI's rights to receive this additional compensation will vest, on a
monthly basis, during the period that the guarantee remains outstanding and will
increase to the extent that amounts are paid by EGI pursuant to the guarantee.
EGI has a period of five years to exercise its rights to receive such payment,
subject to the Company's right to pay such additional fee at any time within the
next three years at escalating amounts and tied to the rights vested by EGI. As
of December 31, 1999, the Company has recorded accrued interest and other
financing expenses of $3.1 million related to this transaction. A committee
comprised of the Company's independent directors negotiated the arrangement with
EGI. The committee received independent legal and financial advice. See Note 11
for further information.

In addition, the purchase agreement with Holland America Line provides for the
transaction to close in October 2000. As part of the purchase agreement, Holland
America Line has agreed to make available to the Company $84.5 million of
financing secured by the vessel.

NOTE 6. STOCKHOLDERS' EQUITY

COMMON STOCK OFFERING

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 offering expenses, were $63.5 million and are being used for construction
of the initial Hawaii vessel.

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.




                                       39
<PAGE>   40

NOTE 7. INCOME TAXES

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

                                            Years Ended December 31,
                                           1999       1998       1997
                                         -----------------------------
Current tax provision (benefit):
    Federal ..........................   $  --      $  --      $  --
    State ............................       150        213        163
                                         -----------------------------
    Total current tax provision ......       150        213        163
                                         -----------------------------
Deferred tax provision (benefit):
    Federal ..........................      (712)        89      1,323
    State ............................      (476)      (195)       134
                                         -----------------------------
    Total deferred tax provision .....    (1,188)      (106)     1,457
                                         -----------------------------
    Total tax provision (benefit) ....   $(1,038)      $107     $1,620
                                         =============================

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


<TABLE>
<CAPTION>
                                                         Years Ended December 31,
                                                       1999        1998       1997
                                                     -------------------------------
                                                        35%         35%        35%
                                                     -------------------------------
<S>                                                  <C>         <C>         <C>
Tax provision (benefit) at statutory rate ........   $  (975)    $    93      $1,417
State income taxes (net of Federal benefit) ......      (297)         12         193
Non-deductible expenses ..........................       234         221         313
Other ............................................      --          (219)       (303)
                                                     -------------------------------
Total tax provision (benefit) ....................   $(1,038)    $   107     $ 1,620
                                                     ===============================
</TABLE>


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:                                   1999     1998
                                                     -----------------
    Insurance costs and reserves .................   $ 1,173   $ 1,097
    Non-recurring executive compensation .........       135       490
    Benefit cost accruals ........................       716       491
    Finance cost accruals ........................     1,030      --
    Alternative minimum tax
      credit carryforwards .......................     2,206     2,196
    Drydock accruals .............................     1,995       967
    Net operating loss carryforward ..............    36,823    35,090
    Goodwill, due to basis differences ...........     3,075     1,270
                                                     -----------------
    Total deferred tax assets ....................    47,153    41,601
                                                     -----------------

Deferred tax liabilities:
    Capital construction fund ....................       702     1,237
    Property plant and equipment, due to
      basis differences and depreciation, net ....    34,005    30,353
                                                     -----------------
    Total deferred tax liabilities ...............    34,707    31,590
                                                     -----------------
    Net deferred tax asset .......................   $12,446   $10,011
                                                     =================

At December 31, 1999, consolidated net operating losses of approximately $3.0
million, $10.0 million, $36.0 million, $14.0 million, $29.0 million, $5.0
million and $5.7 million, expiring in 2008, 2009, 2010, 2011, 2012, 2018 and
2019, respectively, were available to offset future taxable income of the
Company. The 1999 net operating loss of $5.7 million includes $3.5 million of
deductions related to stock option exercises, the tax benefit of which was
recorded as additional paid in capital.



                                       40
<PAGE>   41

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 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 8. RELATED PARTIES

As of December 31, 1999, 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 40% 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 5, 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 $0.4
million, $0.4 million and $0.7 million for the years ended December 31, 1999,
1998 and 1997, respectively. In addition, as previously mentioned in Note 5, the
Company obtained financing guarantees from EGI. These 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 $0.6 million and $0.8 million during 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 $0.1 during both 1999
and 1998 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 $0.2 million for recruiting fees to Heidrick & Struggles ("H&S")
during 1999. Mr. Berry, a Director of the Company since 1999, is a partner of
H&S.

NOTE 9. 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
$845,000, $497,000 and $550,000 for the years ended December 31, 1999, 1998 and
1997, 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, 1999 was $98,000.

The Company also contributes, under collective bargaining agreements, to funds
designed to provide pension and health benefits for its union employees. The
Company contributed $2,419,000, $2,203,000 and $2,147,000 to such plans for the
years ended December 31, 1999, 1998 and 1997, respectively.



                                       41
<PAGE>   42
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
exercise 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 9,749, 11,622 and 9,718 shares issued during 1999, 1998 and
1997, respectively, at an average price of $17.41, $13.38 and $10.70 per share
for 1999, 1998 and 1997, respectively. At December 31, 1999, approximately
451,000 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, 1999, 2,464,672
and 3,000,000 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 1999, 1998 and 1997 was $9.21, $7.86 and $4.25,
respectively, on the date of grant using the Black-Scholes option-pricing model
with the following weighted-average assumptions for 1999, 1998 and 1997
respectively: expected volatility of 50%, 53% and 52%, risk-free interest rates
of 6.3%, 4.6% and 5.7%, expected lives of three years and dividend yield of 0%
for all years.

In 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.

During 1995, the Financial Accounting Standards Board issued SFAS No. 123,
"Accounting for Stock Based Compensation," which defines a fair value based
method of accounting for an employee stock option or similar equity instrument
and encourages all entities to adopt that method of accounting for all of their
employee stock compensation plans. However, it also allows an entity to continue
to measure compensation cost for those plans using the method of accounting
prescribed by APB No. 25, "Accounting for Stock Issued to Employees." Entities
electing to remain with the accounting in APB No. 25 must make pro forma
disclosures of net income and earnings per share, as if the fair value based
method of accounting defined in this Statement has been applied.

The Company applies APB No. 25 in accounting for its plans and, accordingly, no
compensation cost has been recognized for its stock options in the financial
statements. Had the Company determined compensation cost based on the fair value
at the grant date for its stock options 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):


<TABLE>
<CAPTION>
                                                             1999            1998              1997
                                                    ---------------------------------------------------
<S>                                                    <C>              <C>             <C>
Net income (loss)                     As reported       $    (1,750)     $       157     $     2,429
                                      Pro forma              (4,396)          (2,487)          1,422

Basic earnings (loss) per share       As reported        $    (0.10)      $     0.01      $     0.17
                                      Pro forma               (0.26)           (0.18)           0.10

Diluted earnings (loss) per share     As reported        $    (0.10)      $     0.01      $     0.17
                                      Pro forma               (0.26)           (0.18)           0.10
</TABLE>


                                       42
<PAGE>   43
Pro forma net income (loss) and earnings (loss) per share reflect only options
granted since 1995. Therefore, the full impact of calculating compensation cost
for stock options under SFAS No. 123 is not reflected in the pro forma amounts
presented above because compensation cost is reflected over the options' vesting
period which is generally three years and compensation cost for options granted
prior to January 1, 1995 is not considered.

The table below summarizes the activities for 1997, 1998 and 1999:


<TABLE>
<CAPTION>
                                    Executive
                                      Stock
                                   Option Plan           1992 Plan             1992 Plan
                                   -----------   --------------------------   -----------
                                      Shares      Shares          Shares        Shares     Weighed-Average
                                    Subject to   Subject to     Subject to    Subject to   Exercise Price
                                     Options      Options       Stock Units    Options      for Options
                                   -----------   ----------     -----------   -----------  ----------------
<S>                                 <C>          <C>            <C>           <C>         <C>
Balance at December 31, 1996 ....    238,131     1,492,422          --            --          $ 10.54
      Granted ...................       --          62,000        24,500          --            12.36
      Canceled ..................       --         (71,753)       (1,450)         --            11.43
      Exercised .................    (43,006)      (60,290)         --            --             7.90
      Converted .................       --            --          (2,650)         --              --
                                   -----------   ----------     -----------   -----------     -------

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
                                   ===========   ==========     ===========   ===========     =======
</TABLE>


The following table summarizes information about options outstanding at
December 31, 1999:

<TABLE>
<CAPTION>
                                            Options Outstanding                      Options Exercisable
                        ----------------------------------------------------    ------------------------------
                                         Weighted-Average
                                             Remaining         Weighted-                          Weighted-
      Range of          Outstanding      Contractual Life       Average          Exercisable      Average
   Exercise Price       at 12/31/99          in Years        Exercise Price      at 12/31/99    Exercise Price
--------------------   ------------      ----------------   ----------------    ------------    --------------
<S>                    <C>               <C>                <C>                 <C>             <C>
      $   3.25              39,613           2               $    3.25              39,613        $    3.25
    7.97 -    9.88         359,534           7                    8.87             356,201             8.86
   10.25 -   15.00         301,751           6                   11.66             296,084            11.65
   15.32 -   20.00       2,467,612           8                   17.28           1,101,544            17.11
   22.94 -   29.13         265,150          10                   28.98                   0              --
------------------      ----------         ---               ---------           ---------        ---------
$   3.25 - $ 29.13       3,433,660           8               $   16.65           1,793,442        $   14.26
==================      ==========         ===               =========           =========        =========
</TABLE>


                                       43
<PAGE>   44



NOTE 10. UNAUDITED QUARTERLY RESULTS OF OPERATIONS

Summarized unaudited quarterly results of operations for 1999 and 1998 are as
follows:


<TABLE>
<CAPTION>
Year Ended December 31, 1999                  March 31,   June 30,  September 30,    December 31,
(In thousands, except per share data)           1999        1999       1999               1999
                                              ---------------------------------------------------
<S>                                           <C>         <C>        <C>             <C>
     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>


<TABLE>
<CAPTION>
Year Ended December 31, 1998                  March 31,   June 30,  September 30,    December 31,
(In thousands, except per share data)           1999        1999       1999               1999
                                              ---------------------------------------------------
<S>                                           <C>         <C>        <C>             <C>
     Revenues .............................   $ 40,668    $ 53,535   $ 50,920        $ 47,102
     Gross profit .........................     11,209      20,562     18,184          16,675
     Operating (loss) income ..............     (6,143)      4,037      3,798           3,794
     Pre-tax (loss) income ................     (7,262)      2,614      2,424           2,488
     Net (loss) income ....................     (4,362)      1,574      1,454           1,491
     Basic (loss) earnings per share ......      (0.31)       0.11       0.10            0.10
     Diluted (loss) earnings per share ....      (0.31)       0.11       0.10            0.10
</TABLE>


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.

RESCISSION OF ACCOUNTING METHOD

On November 2, 1999, the Company announced that it had rescinded its 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. Pursuant to SOP 93-7, the
Company deferred recognition of direct response advertising costs related to
certain direct response advertising efforts. These deferred costs were
recognized in the periods that the cruises promoted by the efforts were
completed, and the related cruise revenue recognized. The Company rescinded its
adoption of SOP 93-7 due to difficulties encountered in implementing the new
method. In rescinding SOP 93-7, the Company returned to its 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, the Company restated its
earnings for the first quarter of 1999 to reflect a loss of $6.3 million, or
($0.44) per share, compared to its previously reported loss of $4.5 million, or
($0.32) per share. The Company also restated its earnings for the second quarter
of 1999 to $2.5 million, or $0.14 per share, compared to its previously reported
earnings of $2.3 million, or $0.13 per share.


NOTE 11. SUBSEQUENT EVENTS (UNAUDITED)

DEBT ISSUANCE

On February 10, 2000, the Company issued $25 million of one year notes
guaranteed by the Maritime Administration. The notes bear interest at LIBOR
minus 0.05%. This is the first issuance of debt under the $1.1 billion of
financing guarantees from the Maritime Administration for the construction of
the Hawaii cruise vessels. The proceeds are being used for the construction of
the first Hawaii vessel.


                                       44
<PAGE>   45


COMMON STOCK OFFERING

On February 22, 2000, we completed an offering of an additional 2,000,000 shares
of common stock. The proceeds to us, after underwriting commissions, were $47.1
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.

CONVERTIBLE SECURITIES OFFERING

On February 22, 2000, we completed an offering of 2,000,000 trust preferred
securities. Each $50 security bears interest at 7% and is convertible at the
holder's election into 1.6207 shares of common stock. All outstanding preferred
securities will be redeemed on February 15, 2015 or upon early redemption. The
net proceeds to us, after underwriting fees, were $96.8 million. A portion of
the proceeds were used to fund the $30 million letter of credit facility related
to the ms Nieuw Amsterdam purchase, thereby removing EGI from the guarantee, and
to pay down outstanding amounts on the Chase credit facility. The underwriters'
overallotment option of 300,000 additional preferred securities was not
exercised.


                                       45
<PAGE>   46

                                                                      SCHEDULE I

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



                                                       December 31,
                                                    1999         1998
                                                  ----------------------

ASSETS
Cash and cash equivalents .....................   $  30,153    $     458
Prepaid expenses and other current assets .....         339        1,841
Property and equipment, net ...................         906        2,771
Other assets ..................................         493         --
Investment in and advances to subsidiaries ....     100,609       60,667
                                                  ----------------------
                                                  $ 132,500    $  65,737
                                                  ======================

LIABILITIES
Other liabilities .............................   $   2,700    $   3,830
                                                  ----------------------

STOCKHOLDERS' EQUITY
Common stock ..................................         187          143
Paid-in capital ...............................     151,094       80,451
Accumulated deficit ...........................     (19,573)     (17,823)
Other .........................................      (1,908)        (864)
                                                  ----------------------
Total stockholders' equity ....................     129,800       61,907
                                                  ----------------------
                                                  $ 132,500    $  65,737
                                                  ======================


            See accompanying notes to Condensed Financial Statements.


                                       46
<PAGE>   47
                                                                      SCHEUDLE I


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



<TABLE>
<CAPTION>
                                                        Years Ended December 31,
                                                       1999     1998       1997
                                                   -------------------------------
<S>                                                <C>        <C>        <C>
Miscellaneous (expense) revenues ...............   $ 1,711    $(1,700)   $  (290)

Depreciation expense ...........................      (608)      (880)      (713)

Income tax benefit (expense) ...................      (435)     1,068        547

Equity in earnings (losses) of subsidiaries ....    (2,418)     1,669      2,885
                                                   ------------------------------
Net income (loss) ..............................   $(1,750)   $   157    $ 2,429
                                                   ==============================
</TABLE>


            See accompanying notes to Condensed Financial Statements.


                                       47
<PAGE>   48


                                                                      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,
                                                                    1999       1998        1997
                                                                 --------------------------------
<S>                                                              <C>         <C>         <C>
OPERATING ACTIVITIES
Net income (loss) ............................................   $ (1,750)   $    157    $  2,429

ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET CASH
(USED IN) PROVIDED BY OPERATING ACTIVITIES
   Depreciation ..............................................        608         880         713
   Equity in (earnings) losses of subsidiaries, net ..........      2,418      (1,669)     (2,885)
   (Increase) decrease in advances to subsidiaries ...........    (40,961)       (570)        438
   (Increase) decrease in prepaid expenses and other .........        145        (514)        168
   (Decrease) increase in other liabilities ..................        678      (1,326)       (465)
                                                                 --------------------------------
   Net cash (used in) provided by operating activities .......    (38,862)     (3,042)        398
                                                                 --------------------------------
INVESTING ACTIVITIES
Capital expenditures .........................................       (140)     (1,421)       (178)
                                                                 --------------------------------
Net cash used in investing activities ........................       (140)     (1,421)       (178)
                                                                 --------------------------------

FINANCING ACTIVITIES
Issuance of common stock .....................................     68,697       2,907       1,139
Purchase of common stock .....................................       --          (757)       --
Deferred financing fees ......................................       --          (533)       --
                                                                 --------------------------------
Net cash provided by financing activities ....................     68,697       1,617       1,139
                                                                 --------------------------------

Increase (decrease) in cash and cash equivalents .............     29,695      (2,846)      1,359
Cash and cash equivalents, beginning of period ...............        458       3,304       1,945
                                                                 --------------------------------
Cash and cash equivalents, end of period .....................   $ 30,153    $    458    $  3,304
                                                                 ================================

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

</TABLE>


            See accompanying notes to Condensed Financial Statements.



                                       48
<PAGE>   49
                                                                     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, 1999, 1998 and
1997 included herein this Form 10-K. The balance sheets as of December 31, 1999
and 1998, respectively, 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 1999 presentation.

DIVIDENDS FROM SUBSIDIARIES

No dividends were paid to AMCV for the years ended December 31, 1999, 1998 and
1997.

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, 1999, 1998
and 1997.

In 1993, AMCV established a capital construction fund ("CCF") pursuant to
section 607 of the Merchant Marine Act of 1936. The CCF allows AMCV to
accelerate recognition of Federal income tax deductions for capital expenditures
related to the American Hawaii vessels. A substantial portion of the income
generated by AMCV is eligible for deposit into the CCF; however, expenditures
for the vessels of DQSC are not qualified for this tax treatment. As such, on a
consolidated tax return basis, AMCV was able to obtain the accelerated deduction
treatment on a substantial portion of its taxable income.

                                       49

<PAGE>   50


                          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).

**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).


**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).

                                       50

<PAGE>   51

**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)(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).

**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).

                                       51
<PAGE>   52


**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).

**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).

                                       52
<PAGE>   53

**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).

   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).

                                       53
<PAGE>   54

**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).

**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).

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<PAGE>   55

**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

**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)(9) 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.*

  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.             Financial Data Schedule. (for SEC use only)

                                       55
<PAGE>   56


  28.             Not applicable.

*   Certain portions of this exhibit filed herewith have been 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 has been filed separately with the Securities and
    Exchange Commission.

**  Previously filed.




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