According to American Classic Voyages' (AMCV) annual 10-K filing, Ingalls Shipbuilding "is claiming that the Company (AMCV) should pay additional sums beyond the contract price for certain interior finish work and has requested a delay in the delivery schedule. The Company believes that the claims made by the shipyard for additional payments and a delay in the delivery of the ships are unwarranted and the Company intends to assert its rights under the original provisions of the contract. Litton Industries, Ingalls Shipbuilding's parent company, has provided a performance guarantee of the contract." A spokesperson for Ingalls Shipbuilding declined to comment on the statement.

The 10-K filing also appears to give credence to rumors that AMCV's second ship un der construction at Atlantic Marine for its brand Delta Queen Coastal Voyages will be delayed. The company has previously announced an Aug. 4 inaugural; the document states only that delivery will be in the "third quarter 2001." According to an AMCV spokesperson, "We're evaluating the schedule. Within the next couple of weeks we will announce a definitive delivery date."

Regarding its current business in Hawaii following the startup of new brand United States Lines, the filing stated, "Capacity in the Hawaii cruise market has more than doubled in 2001. As a result, we have been discounting our Hawaii cruises, and our gross fare revenue per passenger night in Hawaii for the first half of 2001 has declined by 24 percent, ba sed on cruises reserved through Feb. 28."

The 10-K listed the following construction and renovation costs:

• For the first two United States Lines ships under construction at Ingalls, scheduled to be delivered in January 2003 and 2004, a cost of approximately $495 million each, including the cost of furnishings, fixtures and equipment, as well as design, engineering and architectural fees, but excluding capitalized interest.

• Approximately $42 million for the first Delta Queen Coastal Voyages ship built by Atlantic Marine, and $42 million for the second ship.

• Approximately $44 million for the acquisition, renovation, relocation and start-up of the Columbia Queen, sailing in the Pacific Northwest for AMCV's Delta Queen Steamboat Co. brand.

• Approximately $135 million for the acquisition and renovation costs for the Patriot. Taken together, AMCV estimated that overall "we could increase our indebtedness to approximately $1.2 billion by 2004."

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