Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) (together with NCL
Corporation Ltd., “Norwegian Cruise Line Holdings”, “Norwegian”,
“NCLH” or the “Company”) today reported financial results for the
second quarter ended June 30, 2023 and provided guidance for the
third quarter and full year 2023.
Second Quarter 2023
Highlights:
- Company met or exceeded guidance
for all key metrics in the second quarter.
- Generated total revenue of $2.2
billion, a record for the Company and up 33% compared to the same
period in 2019, and GAAP net income of $86.1 million, or EPS of
$0.20.
- Achieved Adjusted EBITDA of
approximately $515 million and Adjusted EPS of $0.30, above
guidance of $485 million and $0.25 respectively. Second quarter
outperformance was driven by solid revenue performance, lower costs
and favorable fuel pricing.
- Occupancy improved sequentially to
approximately 105% in the quarter, in line with guidance and
reflecting the completion of our phased ramp-up.
- Total revenue per Passenger Cruise
Day increased approximately 15% both as reported and in constant
currency, compared to the same period in 2019.
- Continued to demonstrate results of
ongoing margin enhancement initiative including sequential
improvement in operating costs. Gross Cruise Costs per Capacity Day
was approximately $315 in the quarter. Adjusted Net Cruise Costs
excluding Fuel per Capacity Day in constant currency was
approximately $156, lower than the prior quarter and guidance of
$159.
- Cumulative booked position for the
remainder of 2023 continues to be at record levels and at higher
pricing. The Company remains within its optimal booked position of
approximately 60-65% on a 12-month forward basis.
- Advance ticket sales balance
increased versus the prior quarter reaching a record $3.5 billion,
approximately $167 million higher than prior quarter and 56% above
the second quarter of 2019.
- $2.4 billion of liquidity at
quarter-end, including boost from a $500 million return of cash
collateral from a credit card processor.
- Full year 2023 Adjusted EPS
guidance improved $0.05 to approximately $0.80 reflecting second
quarter outperformance and continued strong results expected for
the remainder of 2023. Adjusted EBITDA guidance improved to the
range of $1.85 to $1.95 billion. Updated guidance reflects
approximately $30 million of headwinds from higher interest and
fuel expense for the back half of the year.
“We are pleased to
report strong second quarter results, in which we met or exceeded
guidance on all key metrics, allowing us to improve our full year
outlook for Adjusted EBITDA and Adjusted EPS,” said Harry Sommer,
president and chief executive officer of Norwegian Cruise Line
Holdings Ltd. “The continued strength in the demand environment is
evident not only in this quarter’s results, in which we generated a
meaningful increase in pricing on 19% capacity growth compared to
2019, but also in our forward booked position which is within our
optimal range and at higher pricing. As we look to the near future,
we are focused on sustaining this momentum by capitalizing on the
robust demand environment, strategically enhancing our guest
experience, rightsizing our cost base through our ongoing margin
enhancement initiative, building excitement for the upcoming
launches of Norwegian Viva and Regent’s Seven Seas Grandeur and
ultimately charting a path to reduce leverage and de-risk our
balance sheet.”
Business,
Operations and Booking Environment Update
Occupancy reached
approximately 105% for the second quarter of 2023, in line with
guidance and marking a significant milestone with the phased
ramp-up now complete. Full year 2023 Occupancy is expected to
average 103.5%, consistent with prior guidance. As expected,
Occupancy in the quarter is slightly lower than the second quarter
of 2019, reflecting the Company’s strategic shift to longer, more
immersive itineraries. This shift naturally results in lower
Occupancy levels and is expected to attract higher quality guests,
generate higher Net Yields, improve guest satisfaction and
cultivate stronger loyalty over time. As a result, full year
Occupancy in 2024 and beyond is expected to be approximately 200
basis points lower relative to 2019.
The Company continues to experience strong and
resilient consumer demand. The cumulative booked position for the
second half of 2023 is ahead of 2019 levels at continued higher
pricing. On a 12-month forward basis, the Company continues to be
in its optimal booked position of approximately 60-65%. As of June
30, 2023, the Company’s advance ticket sales balance, including the
long-term portion, was a record $3.5 billion, approximately $167
million higher than the prior quarter and approximately 56% higher
than the second quarter of 2019. Onboard revenue generation remains
robust with broad-based strength across all revenue streams. The
Company continues to focus on increasing its pre-sold revenue from
guests prior to sailing, as this typically results in higher
overall spend throughout the cruise journey as well as earlier and
more predictable cash inflow.
Total revenue was up
33% in the second quarter versus 2019 with total revenue per
Passenger Cruise Day up approximately 15% as reported and in
constant currency. Gross margin per Capacity Day was approximately
$116 in the quarter. Net Yield growth of approximately 2.9% versus
2019 on a constant currency basis was in line with guidance. The
Company remains on track to achieve its healthy pricing guidance of
Net Per Diem growth in the range of 9.0 to 10.5% and Net Yield
growth in the range of 5.0 to 6.5% for the full year, both on a
constant currency basis and compared to 2019.
The Company continues
to focus on efforts to maximize revenue opportunities and rightsize
its cost base to strengthen the foundation for sustained,
profitable growth. Gross Cruise Costs per Capacity Day was
approximately $315 in the quarter, compared to $298 last quarter.
Adjusted Net Cruise Costs excluding Fuel per Capacity Day in
constant currency in the second quarter of 2023 was approximately
$156, an improvement versus the first quarter and guidance of $159
as certain cost savings initiatives continued to be realized.
Looking forward to the third quarter, the Company expects this
metric to show further modest sequential improvement to
approximately $152, or approximately $155
excluding certain non-recurring benefits expected in the
quarter. The Company will continue to identify and evaluate a
variety of initiatives to improve its cost structure and margin
profile.
Liquidity and
Financial Recovery Plan
The Company continues
to prioritize efforts to optimize its balance sheet and reduce
leverage. As of June 30, 2023, the Company had a total debt
position of $13.1 billion. The Company continues to expect to
refinance its Operating Credit Facility by year-end. As of June 30,
2023, total Net Debt was $12.2 billion and the Company expects
continued improvement in its Net Leverage.
The Company’s
liquidity was approximately $2.4 billion, consisting of
approximately $900 million of cash and cash equivalents, $875
million of availability under its Revolving Loan Facility and a
$650 million undrawn backstop commitment. The increase in liquidity
versus prior quarter reflects the full return of approximately $500
million of cash collateral which was previously held in reserve by
a credit card processor. The Company also has an incremental $300
million unsecured and undrawn commitment through January 2, 2024,
which enhances future liquidity as it becomes available to draw on
October 4, 2023. The Company continues to believe that its ongoing
cash generation, fueled by its attractively financed newbuild
growth pipeline, provides a path to meet its near-term liquidity
needs, including its scheduled debt amortization payments and
capital expenditures.
“During the quarter,
we achieved a second consecutive quarter of sequential operating
cost improvement, demonstrating our commitment and relentless focus
on improving efficiencies, reducing costs and restoring our margins
in a strategic and data-driven manner while preserving the guest
experience and superior service levels our brands are known for,”
said Mark A. Kempa, executive vice president and chief financial
officer of Norwegian Cruise Line Holdings Ltd. “We were also
pleased to have received approximately $500 million of cash
collateral back from a credit card processor during the quarter,
which not only provided a meaningful boost to our liquidity,
bringing it to $2.4 billion at quarter-end, but is also a strong
signal from our external partners of their increased
confidence in our financial position and future outlook.”
Second Quarter
2023 Results
GAAP net income was $86.1 million or EPS of
$0.20 compared to net loss of $(509.3) million or EPS of $(1.22) in
the prior year. The Company reported Adjusted Net Income of $137
million or Adjusted EPS of $0.30 in the second quarter of 2023.
This compares to Adjusted Net Loss and Adjusted EPS of $(478.3)
million and $(1.14), respectively, in the second quarter of 2022.
Adjusted EBITDA in the second quarter was approximately $515
million, better than guidance driven primarily by lower Adjusted
Net Cruise Costs and lower fuel expense. This also marks the first
quarter where Adjusted EBITDA exceeded the same quarter in 2019, a
key milestone in the Company’s recovery efforts.
Gross Cruise Costs per Capacity Day was
approximately $315 in the quarter as reported and $316 in constant
currency. Adjusted Net Cruise Costs excluding Fuel per Capacity Day
in constant currency was approximately $156, reflecting a decrease
compared to the first quarter of 2023 as benefits from the
Company’s ongoing margin enhancement initiative continue to be
realized.
Fuel price per metric ton, net of hedges,
decreased to $715 from $836 in 2022. The Company reported fuel
expense of $164 million in the period.
Interest expense, net was $177.7 million in 2023
compared to $144.4 million in 2022. The increase in interest
expense is primarily the result of higher rates.
Other income (expense), net was expense of
$(8.0) million in 2023 compared to income of $31.0 million in 2022.
In 2023, the expense primarily related to losses on foreign
currency remeasurements.
Outlook and Guidance
In addition to
announcing the results for the second quarter of 2023, the Company
also provided guidance for the third quarter and full year 2023,
along with accompanying sensitivities. The Company does not provide
certain estimated future results on a GAAP basis because the
Company is unable to predict, with reasonable certainty, the future
movement of foreign exchange rates or the future impact of certain
gains and charges. These items are uncertain and will depend on
several factors, including industry conditions, and could be
material to the Company’s results computed in accordance with GAAP.
The Company has not provided reconciliations between the Company’s
2023 guidance and the most directly comparable GAAP measures
because it would be too difficult to prepare a reliable U.S. GAAP
quantitative reconciliation without unreasonable effort.
|
|
2023 Guidance |
|
|
Third Quarter 2023 |
Full Year 20231 |
|
|
As Reported |
Constant Currency |
As Reported |
Constant Currency |
Net Per Diem vs. 2019 |
|
6.50% to 7.50% |
7.00 to 8.00% |
8.50% to 10.00% |
9.00% to 10.50% |
Net Yield vs. 2019 |
|
1.75% to 2.75% |
2.25% to 3.25% |
4.50% to 6.00% |
5.00% to 6.50% |
Adjusted Net Cruise CostExcluding Fuel per Capacity Day |
|
Approx. $152.00 |
Approx. $155.50 |
Approx. $156.00 |
Capacity Days |
|
Approx. 5.85 million |
Approx. 22.7 million |
Occupancy |
|
Approx. 106.0% |
Approx. 103.5% |
Adjusted EBITDA |
|
Approx. $730 million |
$1.85 to $1.95 billion |
Adjusted EPS2 |
|
Approx. $0.70 |
Approx. $0.80 |
Diluted Weighted-Average Shares Outstanding3 |
|
Approx. 510 million4 |
Approx. 460 million4 |
Depreciation and Amortization |
|
Approx. $205 million |
Approx. $815 million |
Adjusted Interest Expense, net5 |
|
Approx. $185 million |
Approx. $720 million |
Effect of a 1% change in Net Yield on Adjusted EBITDA / Adjusted
EPS2 |
|
Approx. $18 millionApprox. $0.04 |
Approx. $33 millionApprox. $0.07 |
Effect of a $1 change in Adjusted Net Cruise Cost Excluding Fuel
per Capacity Day on Adjusted EBITDA / Adjusted EPS2 |
|
Approx. $6 millionApprox. $0.01 |
Approx. $12 millionApprox. $0.03 |
(1) |
Sensitivities for Adjusted EBITDA and Adjusted EPS are for the
remainder of 2023. |
(2) |
Based on midpoint of guidance and using diluted weighted-average
shares outstanding of approximately 510 million for the third
quarter of 2023 and 460 million for full year 2023 Adjusted EPS.
Adjusted EPS is calculated using the ”if-converted” method and
therefore excludes approximately $17 million of interest expense in
the third quarter of 2023 and approximately $18 million for full
year 2023 associated with the Company’s exchangeable notes. |
(3) |
Calculated using the “if-converted” method as consistent with the
FASB accounting standards. |
(4) |
Q3 2023 assumes all four of the Company’s exchangeable notes are
dilutive and therefore included in diluted weighted-average shares
outstanding. FY 2023 assumes only the 2027 1.125% Exchangeable
Notes are dilutive and included in the diluted weighted-average
shares outstanding. |
(5) |
Based on our June 30, 2023 outstanding variable rate debt balance,
a one percentage point increase in annual SOFR interest rates would
increase our annual interest expense by approximately $17 million
excluding the effects of capitalization of interest. |
|
|
The following reflects the foreign currency
exchange rates the Company used in its third quarter 2023
guidance.
|
|
Current Guidance |
|
|
Euro |
$1.09 |
|
|
British pound |
$1.27 |
|
|
Australian Dollar |
$0.67 |
|
|
Canadian Dollar |
$0.76 |
|
|
|
|
|
Fuel
The following reflects the Company’s
expectations regarding fuel consumption and pricing, along with
accompanying sensitivities.
|
|
|
Third Quarter 2023 |
|
Full Year 2023 |
|
Fuel consumption in metric tons1 |
|
|
|
240,000 |
|
980,000 |
|
Fuel price per metric ton, net of hedges2 |
|
|
$725 |
|
$735 |
|
Effect on Adjusted EPS of a 10% changein fuel prices, net of
hedges |
|
|
$0.01 |
|
$0.033 |
|
(1) Fuel consumption
for the full year 2023 is expected to be split approximately evenly
between heavy fuel oil and marine gas oil.(2) Fuel
prices are based on forward curves as of
7/21/23.(3) For the remaining quarters of
2023.
As of June 30, 2023, the Company had hedged
approximately 51% and 26% of its total projected metric tons of
fuel consumption for the remainder of 2023 and 2024, respectively.
The following table provides amounts hedged and price per metric
ton of heavy fuel oil (“HFO”) and marine gas oil
(“MGO”).
|
|
|
Remainder of 2023 |
|
2024 |
|
% of HFO Consumption Hedged1 |
|
|
|
28% |
|
|
13% |
|
Blended HFO Hedge Price / Metric Ton |
|
|
|
$571 |
|
|
$371 |
|
% of MGO Consumption Hedged |
|
|
|
73% |
|
|
37% |
|
Blended MGO Hedge Price / Metric Ton |
|
|
|
$703 |
|
|
$718 |
|
Total % of Consumption Hedged |
|
|
|
51% |
|
|
26% |
|
(1) Hedged
derivatives include accounting hedges as well as economic
hedges.
Capital Expenditures
Non-newbuild capital expenditures for the second
quarter of 2023 were $79 million. Anticipated non-newbuild capital
expenditures for full year 2023 are expected to be approximately
$425 million including approximately $90 million in the third
quarter.
Newbuild-related capital expenditures, net of
export credit financing, are expected to be approximately $0.5
billion, $0.2 billion and $0.5 billion for the full years ending
December 31, 2023, 2024 and 2025, respectively. Net
newbuild-related capital expenditures for the second quarter of
2023 were approximately $90 million and are expected to be
approximately $230 million for the third quarter of 2023 including
the delivery of Norwegian Viva in August.
Company Updates and Other Business
Highlights:
Environmental, Social and Governance
(“ESG”)
- Norwegian Cruise Line Holdings
published its 2022 Environmental, Social and Governance (ESG)
report and Sustainability Accounting Standards Board (SASB) index
as part of its global sustainability program, Sail & Sustain.
The report highlights the progress on NCLH’s ESG strategy and
goals, including its efforts across the five pillars of Sail &
Sustain. Learn more here.
- Norwegian Cruise Line announced the
20 winners of its fourth annual award-winning Giving Joy
recognition program, which provides deserving teachers with free
cruises and the chance to set sail on Norwegian Viva. The 2023
contest drew support for over 3,400 teachers across North America.
Learn more here.
- Norwegian Cruise Line in
partnership with Coca-Cola, was proud to honor over 40 Gold Star
Families as part of the 600 Miles of Remembrance on May 28, 2023 at
the Coca-Cola 600 at the Charlotte Motor Speedway. Taking place
over the Memorial Day holiday weekend, the Coca-Cola 600 honored
military service members and their families, including a special
brunch exclusively for Gold Star Families where each family was
presented with a free seven-day cruise. Learn more here.
Fleet and Brand Updates
- Norwegian Cruise Line announced
that GRAMMY® nominated, and five-time Latin GRAMMY® winning singer,
songwriter, musician and producer, Luis Fonsi, will serve as the
godfather of its newest groundbreaking ship, Norwegian Viva. Learn
more here.
- Oceania Cruises announced that Chef
Alexis Quaretti, Senior Culinary Director, has been inducted into
the prestigious echelons of the Maîtres Cuisiniers de France.
Quaretti joins Oceania Cruises’ Vice President of Culinary Eric
Barale, who served as Quaretti’s godfather into the program. As
such, Oceania Cruises is the only major cruise line to boast two
Master Chefs of France. Learn more here.
- Regent Seven Seas Cruises announced
that Sarah Fabergé, Founding Member of The Fabergé Heritage Council
and great-granddaughter of Peter Carl Fabergé, will serve as
Godmother to the Seven Seas Grandeur. Sarah will christen the ship
at an elegant and exclusive gala event in Miami, Florida on
December 10, 2023, which will also feature incredible entertainment
from Emmy and Tony Award-Winning actress and singer Kristin
Chenoweth. Learn more here.
- Norwegian Cruise Line announced
Norwegian Joy will undergo extensive enhancements in January 2024
to elevate the onboard guest experience with popular offerings,
including a new Thermal Suite in the Mandara Spa and Salon,
expanded Vibe Beach Club, 24 new staterooms, redesigned
Three-Bedroom The Haven Premier Owner’s Suites and more.
- Regent Seven Seas Cruises announced
a landmark partnership with Global Hotel Alliance (GHA), the
world’s largest alliance of independent hotel brands. This
exclusive agreement marks the first time a cruise line has
partnered with GHA, bringing together two leading luxury brands in
the travel sector. Learn more here.
- Oceania Cruises will offer its
guests simply MORE™ than ever before, with free roundtrip airfare,
free airport transfers, free shore excursions and a free beverage
package for all guests, for all new reservations beginning July 1,
2023, for sailings departing October 1, 2023, or later. Created to
elevate the guest experience, the newly unveiled value promise has
been designed to create long-lasting memories in enticing
destinations and provide access to exquisite indulgences. Learn
more here.
Other Highlights
- NCLH strengthened its executive
leadership team with addition of cruise industry veteran Patrik
Dahlgren as the Company’s new Executive Vice President, Vessel
Operations. Dahlgren will oversee marine and technical operations,
hotel operations, entertainment, cruise programs and security
across NCLH’s three brands. Dahlgren succeeds Robin Lindsay who
will serve as Executive Vice President, Newbuild and Refurbishment,
overseeing the Company’s robust newbuild program and refurbishment
projects. Learn more here.
Conference Call
The Company has scheduled a conference call for
Tuesday, August 1, 2023 at 10:00 a.m. Eastern Time to discuss
second quarter 2023 results and provide a business update. A link
to the live webcast along with a slide presentation can be found on
the Company’s Investor Relations website at
https://www.nclhltd.com/investors. A replay of the conference call
will also be available on the website for 30 days after the
call.
About
Norwegian Cruise Line Holdings Ltd.
Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH)
is a leading global cruise company which operates the Norwegian
Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands.
With a combined fleet of 30 ships with over 60,000 berths, these
brands offer itineraries to approximately 700 destinations
worldwide. NCLH has seven additional ships scheduled for delivery
through 2028, comprising over 19,000 berths.
Terminology
2027 1.125% Exchangeable Notes. On November 19,
2021, pursuant to an indenture among NCL Corporation Ltd., as
issuer, Norwegian Cruise Line Holdings Ltd., as guarantor, and U.S.
Bank National Association, as trustee, NCL Corporation Ltd. issued
$1,150.0 million aggregate principal amount of exchangeable senior
notes due 2027.
Adjusted EBITDA. EBITDA adjusted for other
income (expense), net and other supplemental adjustments.
Adjusted EPS. Adjusted Net Income (Loss) divided
by the number of diluted weighted-average shares outstanding.
Adjusted Gross Margin. Gross margin adjusted for
payroll and related, fuel, food, other and ship depreciation. Gross
margin is calculated pursuant to GAAP as total revenue less total
cruise operating expense and ship depreciation.
Adjusted Net Cruise Cost Excluding Fuel. Net
Cruise Cost less fuel expense adjusted for supplemental
adjustments.
Adjusted Net Income (Loss). Net income
(loss), adjusted for the effect of dilutive securities and other
supplemental adjustments.
Berths. Double occupancy capacity per cabin
(single occupancy per studio cabin) even though many cabins can
accommodate three or more passengers.
Capacity Days. Berths available for sale
multiplied by the number of cruise days for the period for ships in
service.
Constant Currency. A calculation whereby foreign
currency-denominated revenues and expenses in a period are
converted at the U.S. dollar exchange rate of a comparable period
in order to eliminate the effects of foreign exchange
fluctuations.
Dry-dock. A process whereby a ship is positioned
in a large basin where all of the fresh/sea water is pumped out in
order to carry out cleaning and repairs of those parts of a ship
which are below the water line.
EBITDA. Earnings before interest, taxes, and
depreciation and amortization.
EPS. Diluted earnings (loss) per share.
GAAP. Generally accepted accounting principles
in the U.S.
Gross Cruise Cost. The sum of total cruise
operating expense and marketing, general and administrative
expense.
Net Cruise Cost. Gross Cruise Cost less
commissions, transportation and other expense and onboard and other
expense.
Net Cruise Cost Excluding Fuel. Net Cruise Cost
less fuel expense.
Net Debt. Long-term debt, including current
portion, less cash and cash equivalents.
Net Leverage. Net Debt divided by Adjusted
EBITDA.
Net Per Diem. Adjusted Gross Margin divided by
Passenger Cruise Days.
Net Yield. Adjusted Gross Margin per Capacity
Day.
Occupancy, Occupancy Percentage or Load Factor.
The ratio of Passenger Cruise Days to Capacity Days. A percentage
in excess of 100% indicates that three or more passengers occupied
some cabins.
Operating Credit Facility. Consists of the $875
million senior secured revolving credit facility and the senior
secured term loan A facility having an outstanding principal amount
of $0.8 billion as of June 30, 2023.
Passenger Cruise Days. The number of passengers
carried for the period, multiplied by the number of days in their
respective cruises.
Non-GAAP Financial Measures
We use certain non-GAAP financial measures, such
as Adjusted Gross Margin, Net Yield, Net Cruise Cost, Adjusted Net
Cruise Cost Excluding Fuel, Adjusted EBITDA, Net Leverage, Net
Debt, Adjusted Net Income (Loss), Adjusted EPS and Net Per Diem, to
enable us to analyze our performance. See “Terminology” for the
definitions of these and other non-GAAP financial measures. We
utilize Adjusted Gross Margin, Net Yield, and Net Per Diem to
manage our business on a day-to-day basis and believe they are
relevant measures of our revenue performance because they reflect
revenue earned net of certain direct variable costs. We also
utilize Net Cruise Cost and Adjusted Net Cruise Cost Excluding Fuel
to manage our business on a day-to-day basis. In measuring our
ability to control costs in a manner that positively impacts net
income (loss), we believe changes in Adjusted Gross Margin, Net
Cruise Cost and Adjusted Net Cruise Cost Excluding Fuel to be the
most relevant indicators of our performance.
As our business includes the sourcing of
passengers and deployment of vessels outside of the U.S., a portion
of our revenue and expenses are denominated in foreign currencies,
particularly British pound, Canadian dollar, Euro and Australian
dollar which are subject to fluctuations in currency exchange rates
versus our reporting currency, the U.S. dollar. In order to monitor
results excluding these fluctuations, we calculate certain non-GAAP
measures on a Constant Currency basis, whereby current period
revenue and expenses denominated in foreign currencies are
converted to U.S. dollars using currency exchange rates of the
comparable period. We believe that presenting these non-GAAP
measures on both a reported and Constant Currency basis is useful
in providing a more comprehensive view of trends in our
business.
We believe that Adjusted EBITDA is appropriate
as a supplemental financial measure as it is used by management to
assess operating performance. We also believe that Adjusted EBITDA
is a useful measure in determining our performance as it reflects
certain operating drivers of our business, such as sales growth,
operating costs, marketing, general and administrative expense and
other operating income and expense. In addition, management uses
Adjusted EBITDA as a performance measure for our incentive
compensation. Adjusted EBITDA is not a defined term under GAAP nor
is it intended to be a measure of liquidity or cash flows from
operations or a measure comparable to net income (loss), as it does
not take into account certain requirements such as capital
expenditures and related depreciation, principal and interest
payments and tax payments and it includes other supplemental
adjustments.
In addition, Adjusted Net Income (Loss) and
Adjusted EPS are non-GAAP financial measures that exclude certain
amounts and are used to supplement GAAP net income (loss) and EPS.
We use Adjusted Net Income (Loss) and Adjusted EPS as key
performance measures of our earnings performance. We believe that
both management and investors benefit from referring to these
non-GAAP financial measures in assessing our performance and when
planning, forecasting and analyzing future periods. These non-GAAP
financial measures also facilitate management’s internal comparison
to our historical performance. In addition, management uses
Adjusted EPS as a performance measure for our incentive
compensation. The amounts excluded in the presentation of these
non-GAAP financial measures may vary from period to period;
accordingly, our presentation of Adjusted Net Income (Loss) and
Adjusted EPS may not be indicative of future adjustments or
results.
Net Leverage and Net Debt are performance
measures that we believe provide management and investors a more
complete understanding of our leverage position and borrowing
capacity after factoring in cash and cash equivalents. You are
encouraged to evaluate each adjustment used in calculating our
non-GAAP financial measures and the reasons we consider our
non-GAAP financial measures appropriate for supplemental analysis.
In evaluating our non-GAAP financial measures, you should be aware
that in the future we may incur expenses similar to the adjustments
in our presentation. Our non-GAAP financial measures have
limitations as analytical tools, and you should not consider these
measures in isolation or as a substitute for analysis of our
results as reported under GAAP. Our presentation of our non-GAAP
financial measures should not be construed as an inference that our
future results will be unaffected by unusual or non-recurring
items. Our non-GAAP financial measures may not be comparable to
other companies. Please see a historical reconciliation of these
measures to the most comparable GAAP measure presented in our
consolidated financial statements below.
Cautionary Statement Concerning
Forward-Looking Statements
Some of the statements, estimates or projections
contained in this release are “forward-looking statements” within
the meaning of the U.S. federal securities laws intended to qualify
for the safe harbor from liability established by the Private
Securities Litigation Reform Act of 1995. All statements other than
statements of historical facts contained, or incorporated by
reference, in this release, including, without limitation, those
regarding our business strategy, financial position, results of
operations, plans, prospects, actions taken or strategies being
considered with respect to our liquidity position, valuation and
appraisals of our assets and objectives of management for future
operations (including those regarding expected fleet additions, our
expectations regarding macroeconomic conditions, our expectations
regarding cruise voyage occupancy, the implementation of and
effectiveness of our health and safety protocols, operational
position, demand for voyages, plans or goals for our sustainability
program and decarbonization efforts, our expectations for future
cash flows and profitability, financing opportunities and
extensions, and future cost mitigation and cash conservation
efforts and efforts to reduce operating expenses and capital
expenditures) are forward-looking statements. Many, but not all, of
these statements can be found by looking for words like “expect,”
“anticipate,” “goal,” “project,” “plan,” “believe,” “seek,” “will,”
“may,” “forecast,” “estimate,” “intend,” “future” and similar
words. Forward-looking statements do not guarantee future
performance and may involve risks, uncertainties and other factors
which could cause our actual results, performance or achievements
to differ materially from the future results, performance or
achievements expressed or implied in those forward-looking
statements. Examples of these risks, uncertainties and other
factors include, but are not limited to the impact of: adverse
general economic factors, such as fluctuating or increasing levels
of interest rates, inflation, unemployment, underemployment and the
volatility of fuel prices, declines in the securities and real
estate markets, and perceptions of these conditions that decrease
the level of disposable income of consumers or consumer confidence;
the spread of epidemics, pandemics and viral outbreaks, including
the COVID-19 pandemic, and their effect on the ability or desire of
people to travel (including on cruises), which has adversely
impacted and may continue to adversely impact our results,
operations, outlook, plans, goals, growth, reputation, cash flows,
liquidity, demand for voyages and share price; implementing
precautions in coordination with regulators and global public
health authorities to protect the health, safety and security of
guests, crew and the communities we visit and to comply with
related regulatory restrictions; our indebtedness and restrictions
in the agreements governing our indebtedness that require us to
maintain minimum levels of liquidity and be in compliance with
maintenance covenants and otherwise limit our flexibility in
operating our business, including the significant portion of assets
that are collateral under these agreements; our ability to work
with lenders and others or otherwise pursue options to defer,
renegotiate, refinance or restructure our existing debt profile,
near-term debt amortization, newbuild related payments and other
obligations and to work with credit card processors to satisfy
current or potential future demands for collateral on cash advanced
from customers relating to future cruises; our need for additional
financing or financing to optimize our balance sheet, which may not
be available on favorable terms, or at all, and our outstanding
exchangeable notes and any future financing which may be dilutive
to existing shareholders; the unavailability of ports of call;
future increases in the price of, or major changes, disruptions or
reduction in, commercial airline services; changes involving the
tax and environmental regulatory regimes in which we operate,
including new regulations aimed at reducing greenhouse gas
emissions; the accuracy of any appraisals of our assets as a result
of the impact of the COVID-19 pandemic or otherwise; our success in
controlling operating expenses and capital expenditures; trends in,
or changes to, future bookings and our ability to take future
reservations and receive deposits related thereto; adverse events
impacting the security of travel, or customer perceptions of the
security of travel, such as terrorist acts, armed conflict, such as
Russia’s invasion of Ukraine, and threats thereof, acts of piracy,
and other international events; adverse incidents involving cruise
ships; breaches in data security or other disturbances to our
information technology and other networks or our actual or
perceived failure to comply with requirements regarding data
privacy and protection; changes in fuel prices and the type of fuel
we are permitted to use and/or other cruise operating costs;
mechanical malfunctions and repairs, delays in our shipbuilding
program, maintenance and refurbishments and the consolidation of
qualified shipyard facilities; the risks and increased costs
associated with operating internationally; our inability to recruit
or retain qualified personnel or the loss of key personnel or
employee relations issues; impacts related to climate change and
our ability to achieve our climate-related or other sustainability
goals; our inability to obtain adequate insurance coverage; pending
or threatened litigation, investigations and enforcement actions;
volatility and disruptions in the global credit and financial
markets, which may adversely affect our ability to borrow and could
increase our counterparty credit risks, including those under our
credit facilities, derivatives, contingent obligations, insurance
contracts and new ship progress payment guarantees; any further
impairment of our trademarks, trade names or goodwill; our reliance
on third parties to provide hotel management services for certain
ships and certain other services; fluctuations in foreign currency
exchange rates; our expansion into new markets and investments in
new markets and land-based destination projects; overcapacity in
key markets or globally; and other factors set forth under “Risk
Factors” in our most recently filed Annual Report on Form 10-K and
subsequent filings with the Securities and Exchange Commission. The
above examples are not exhaustive and new risks emerge from time to
time. There may be additional risks that we consider immaterial or
which are unknown. Such forward-looking statements are based on our
current beliefs, assumptions, expectations, estimates and
projections regarding our present and future business strategies
and the environment in which we expect to operate in the future.
These forward-looking statements speak only as of the date made. We
expressly disclaim any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statement
to reflect any change in our expectations with regard thereto or
any change of events, conditions or circumstances on which any such
statement was based, except as required by law.
Investor Relations & Media Contact |
|
Jessica John |
|
(305) 468-2339 |
|
InvestorRelations@nclcorp.com |
|
NORWEGIAN
CRUISE LINE HOLDINGS LTD. |
CONSOLIDATED
STATEMENTS OF OPERATIONS |
(Unaudited) |
(in
thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
|
|
|
|
|
June 30, |
|
June 30, |
|
|
|
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
Passenger ticket |
$ |
1,478,474 |
|
|
$ |
793,892 |
|
|
$ |
2,687,315 |
|
|
$ |
1,136,347 |
|
|
Onboard and other |
|
727,018 |
|
|
|
393,289 |
|
|
|
1,340,116 |
|
|
|
572,774 |
|
|
|
|
|
Total revenue |
|
2,205,492 |
|
|
|
1,187,181 |
|
|
|
4,027,431 |
|
|
|
1,709,121 |
|
Cruise operating expense |
|
|
|
|
|
|
|
|
Commissions, transportation and other |
|
506,855 |
|
|
|
256,190 |
|
|
|
916,539 |
|
|
|
344,148 |
|
|
Onboard and other |
|
161,880 |
|
|
|
96,155 |
|
|
|
281,577 |
|
|
|
128,705 |
|
|
Payroll and related |
|
308,220 |
|
|
|
262,580 |
|
|
|
612,375 |
|
|
|
503,307 |
|
|
Fuel |
|
|
|
|
164,242 |
|
|
|
181,189 |
|
|
|
359,110 |
|
|
|
316,698 |
|
|
Food |
|
|
|
87,770 |
|
|
|
61,157 |
|
|
|
183,736 |
|
|
|
100,673 |
|
|
Other |
|
|
|
154,643 |
|
|
|
216,045 |
|
|
|
310,691 |
|
|
|
415,198 |
|
|
|
|
|
Total cruise operating expense |
|
1,383,610 |
|
|
|
1,073,316 |
|
|
|
2,664,028 |
|
|
|
1,808,729 |
|
Other operating expense |
|
|
|
|
|
|
|
|
Marketing, general and administrative |
|
352,222 |
|
|
|
329,080 |
|
|
|
688,235 |
|
|
|
625,287 |
|
|
Depreciation and amortization |
|
197,115 |
|
|
|
181,587 |
|
|
|
391,905 |
|
|
|
360,663 |
|
|
|
|
|
Total other operating expense |
|
549,337 |
|
|
|
510,667 |
|
|
|
1,080,140 |
|
|
|
985,950 |
|
|
|
|
|
|
Operating income (loss) |
|
272,545 |
|
|
|
(396,802 |
) |
|
|
283,263 |
|
|
|
(1,085,558 |
) |
Non-operating income (expense) |
|
|
|
|
|
|
|
|
Interest expense, net |
|
(177,692 |
) |
|
|
(144,377 |
) |
|
|
(348,949 |
) |
|
|
(472,062 |
) |
|
Other income (expense), net |
|
(8,043 |
) |
|
|
30,991 |
|
|
|
(16,998 |
) |
|
|
69,111 |
|
|
|
|
|
Total non-operating income (expense) |
|
(185,735 |
) |
|
|
(113,386 |
) |
|
|
(365,947 |
) |
|
|
(402,951 |
) |
Net income (loss) before income taxes |
|
86,810 |
|
|
|
(510,188 |
) |
|
|
(82,684 |
) |
|
|
(1,488,509 |
) |
Income tax benefit (expense) |
|
(694 |
) |
|
|
867 |
|
|
|
9,479 |
|
|
|
(3,526 |
) |
Net income (loss) |
$ |
86,116 |
|
|
$ |
(509,321 |
) |
|
$ |
(73,205 |
) |
|
$ |
(1,492,035 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
|
|
424,178,775 |
|
|
|
419,107,330 |
|
|
|
423,421,203 |
|
|
|
418,424,753 |
|
|
Diluted |
|
|
461,075,240 |
|
|
|
419,107,330 |
|
|
|
423,421,203 |
|
|
|
418,424,753 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share |
|
|
|
|
|
|
|
|
Basic |
|
|
$ |
0.20 |
|
|
$ |
(1.22 |
) |
|
$ |
(0.17 |
) |
|
$ |
(3.57 |
) |
|
Diluted |
|
$ |
0.20 |
|
|
$ |
(1.22 |
) |
|
$ |
(0.17 |
) |
|
$ |
(3.57 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NORWEGIAN
CRUISE LINE HOLDINGS LTD. |
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) |
(Unaudited) |
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
|
June 30, |
|
June 30, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
86,116 |
|
|
$ |
(509,321 |
) |
|
$ |
(73,205 |
) |
|
$ |
(1,492,035 |
) |
Other comprehensive loss: |
|
|
|
|
|
|
|
|
Shipboard Retirement Plan |
|
|
64 |
|
|
|
94 |
|
|
|
128 |
|
|
|
2,570 |
|
Cash flow hedges: |
|
|
|
|
|
|
|
|
|
Net
unrealized loss |
|
|
(4,577 |
) |
|
|
(90,503 |
) |
|
|
(23,052 |
) |
|
|
(51,199 |
) |
|
Amount
realized and reclassified into earnings |
|
|
2,547 |
|
|
|
(36,075 |
) |
|
|
(7,327 |
) |
|
|
(43,577 |
) |
|
Total other
comprehensive loss |
|
|
(1,966 |
) |
|
|
(126,484 |
) |
|
|
(30,251 |
) |
|
|
(92,206 |
) |
Total comprehensive income (loss) |
|
$ |
84,150 |
|
|
$ |
(635,805 |
) |
|
$ |
(103,456 |
) |
|
$ |
(1,584,241 |
) |
|
|
|
|
|
|
|
|
|
|
NORWEGIAN
CRUISE LINE HOLDINGS LTD. |
CONSOLIDATED
BALANCE SHEETS |
(Unaudited) |
(in
thousands, except share data) |
|
|
June
30, |
|
|
December
31, |
|
|
|
2023 |
|
|
|
|
2022 |
|
Assets |
|
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
899,135 |
|
|
|
$ |
946,987 |
|
Accounts receivable, net |
|
|
219,116 |
|
|
|
|
326,272 |
|
Inventories |
|
|
153,850 |
|
|
|
|
148,717 |
|
Prepaid expenses and other assets |
|
|
576,478 |
|
|
|
|
450,893 |
|
Total current assets |
|
|
1,848,579 |
|
|
|
|
1,872,869 |
|
Property and
equipment, net |
|
|
15,054,710 |
|
|
|
|
14,516,366 |
|
Goodwill |
|
|
98,134 |
|
|
|
|
98,134 |
|
Trade
names |
|
|
500,525 |
|
|
|
|
500,525 |
|
Other
long-term assets |
|
|
1,146,264 |
|
|
|
|
1,569,800 |
|
Total assets |
|
$ |
18,648,212 |
|
|
|
$ |
18,557,694 |
|
Liabilities and shareholders’ equity |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Current portion of long-term debt |
|
$ |
1,125,754 |
|
|
|
$ |
991,128 |
|
Accounts payable |
|
|
148,328 |
|
|
|
|
228,742 |
|
Accrued expenses and other liabilities |
|
|
1,198,386 |
|
|
|
|
1,318,460 |
|
Advance ticket sales |
|
|
3,345,767 |
|
|
|
|
2,516,521 |
|
Total current liabilities |
|
|
5,818,235 |
|
|
|
|
5,054,851 |
|
Long-term
debt |
|
|
11,994,555 |
|
|
|
|
12,630,402 |
|
Other
long-term liabilities |
|
|
820,201 |
|
|
|
|
803,850 |
|
Total liabilities |
|
|
18,632,991 |
|
|
|
|
18,489,103 |
|
Commitments
and contingencies |
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
|
Ordinary shares, $0.001 par
value; 980,000,000 shares authorized; and 425,155,523 shares issued
and |
|
|
|
outstanding at June
30, 2023 and 421,413,565 shares issued and outstanding at
December 31, 2022 |
|
|
425 |
|
|
|
|
421 |
|
Additional paid-in capital |
|
|
7,661,646 |
|
|
|
|
7,611,564 |
|
Accumulated other comprehensive
income (loss) |
|
|
(507,330 |
) |
|
|
|
(477,079 |
) |
Accumulated deficit |
|
|
(7,139,520 |
) |
|
|
|
(7,066,315 |
) |
Total
shareholders’ equity |
|
|
15,221 |
|
|
|
|
68,591 |
|
Total
liabilities and shareholders’ equity |
|
$ |
18,648,212 |
|
|
|
$ |
18,557,694 |
|
|
|
|
|
|
|
NORWEGIAN
CRUISE LINE HOLDINGS LTD. |
CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(Unaudited) |
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended |
|
|
|
|
|
|
|
|
June 30, |
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
2022 |
|
Cash flows from operating activities |
|
|
|
|
Net loss |
|
|
$ |
(73,205 |
) |
|
$ |
(1,492,035 |
) |
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities: |
|
|
|
Depreciation and amortization expense |
|
|
425,288 |
|
|
|
391,320 |
|
|
Loss on derivatives |
|
|
9,423 |
|
|
|
47 |
|
|
Loss on extinguishment of debt |
|
|
2,801 |
|
|
|
188,433 |
|
|
Provision for bad debts and inventory obsolescence |
|
|
1,497 |
|
|
|
2,500 |
|
|
Gain on involuntary conversion of assets |
|
|
(4,583 |
) |
|
|
(1,880 |
) |
|
Share-based compensation expense |
|
|
72,691 |
|
|
|
62,840 |
|
|
Net foreign currency adjustments on euro-denominated
debt |
|
|
1,822 |
|
|
|
(12,063 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable, net |
|
|
106,709 |
|
|
|
566,265 |
|
|
Inventories |
|
|
(5,815 |
) |
|
|
(36,748 |
) |
|
Prepaid expenses and other assets |
|
|
321,120 |
|
|
|
(542,730 |
) |
|
Accounts payable |
|
|
(72,345 |
) |
|
|
(127,188 |
) |
|
Accrued expenses and other liabilities |
|
|
(75,009 |
) |
|
|
137,225 |
|
|
Advance ticket sales |
|
|
826,221 |
|
|
|
755,189 |
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
|
|
1,536,615 |
|
|
|
(108,825 |
) |
Cash flows from investing activities |
|
|
|
|
Additions to property and equipment, net |
|
|
(974,190 |
) |
|
|
(326,303 |
) |
Proceeds from maturities of short-term investments |
|
|
— |
|
|
|
240,000 |
|
Cash paid on settlement of derivatives |
|
|
(23,379 |
) |
|
|
— |
|
Other |
|
|
|
|
|
5,367 |
|
|
|
5,237 |
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(992,202 |
) |
|
|
(81,066 |
) |
Cash flows from financing activities |
|
|
|
|
Repayments of long-term debt |
|
|
(2,500,777 |
) |
|
|
(1,268,888 |
) |
Proceeds from long-term debt |
|
|
2,038,187 |
|
|
|
2,073,175 |
|
Proceeds from employee related plans |
|
|
2,618 |
|
|
|
2,557 |
|
Net share settlement of restricted share units |
|
|
(25,223 |
) |
|
|
(11,991 |
) |
Early redemption premium |
|
|
— |
|
|
|
(172,012 |
) |
Deferred financing fees |
|
|
(107,070 |
) |
|
|
(36,359 |
) |
|
|
|
|
|
Net cash provided by (used in) financing activities |
|
|
(592,265 |
) |
|
|
586,482 |
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
|
(47,852 |
) |
|
|
396,591 |
|
Cash and cash equivalents at beginning of the period |
|
|
946,987 |
|
|
|
1,506,647 |
|
Cash and cash equivalents at end of the period |
|
$ |
899,135 |
|
|
$ |
1,903,238 |
|
|
|
|
|
|
|
|
|
|
|
|
NORWEGIAN
CRUISE LINE HOLDINGS LTD. |
|
NON-GAAP
RECONCILING INFORMATION |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
sets forth selected statistical information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
|
|
|
|
June 30, |
|
June 30, |
|
|
|
|
|
|
|
2023 |
|
|
|
2019 |
|
|
|
2023 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passengers
carried |
|
|
|
|
|
693,085 |
|
|
|
682,935 |
|
|
|
1,326,995 |
|
|
|
1,327,987 |
|
|
Passenger
Cruise Days |
|
|
|
|
|
5,781,750 |
|
|
|
5,014,083 |
|
|
|
11,278,856 |
|
|
|
9,989,523 |
|
|
Capacity
Days |
|
|
|
|
|
5,513,288 |
|
|
|
4,626,871 |
|
|
|
10,928,835 |
|
|
|
9,343,800 |
|
|
Occupancy
Percentage |
|
|
|
|
|
104.9 |
% |
|
|
108.4 |
% |
|
|
103.2 |
% |
|
|
106.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NORWEGIAN
CRUISE LINE HOLDINGS LTD. |
|
NON-GAAP
RECONCILING INFORMATION |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Gross Margin,
Net Per Diem, and Net Yield were calculated as follows (in
thousands, except Passenger Cruise Days and per Passenger Cruise
Day data): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
June 30, |
|
June 30, |
|
|
|
|
2023 |
|
|
|
|
|
|
2023 |
|
|
|
|
|
|
|
Constant
Currency |
|
|
|
|
|
|
|
Constant
Currency |
|
|
|
|
|
|
2023 |
|
compared to 2019 |
|
|
2019 |
|
|
|
2023 |
|
|
compared to 2019 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue |
$ |
2,205,492 |
|
$ |
2,215,634 |
|
$ |
1,664,277 |
|
|
$ |
4,027,431 |
|
|
$ |
4,050,990 |
|
|
$ |
3,067,907 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
Total cruise
operating expense |
|
1,383,610 |
|
|
1,388,105 |
|
|
958,424 |
|
|
|
2,664,028 |
|
|
|
2,677,966 |
|
|
|
1,785,075 |
|
|
Ship
depreciation |
|
183,499 |
|
|
183,499 |
|
|
143,111 |
|
|
|
365,068 |
|
|
|
365,068 |
|
|
|
295,962 |
|
|
Gross margin |
|
638,383 |
|
|
644,030 |
|
|
562,742 |
|
|
|
998,335 |
|
|
|
1,007,956 |
|
|
|
986,870 |
|
|
Ship
depreciation |
|
183,499 |
|
|
183,499 |
|
|
143,111 |
|
|
|
365,068 |
|
|
|
365,068 |
|
|
|
295,962 |
|
|
Payroll and
related |
|
308,220 |
|
|
308,304 |
|
|
229,385 |
|
|
|
612,375 |
|
|
|
612,859 |
|
|
|
452,492 |
|
|
Fuel |
|
164,242 |
|
|
164,282 |
|
|
100,531 |
|
|
|
359,110 |
|
|
|
359,164 |
|
|
|
198,784 |
|
|
Food |
|
87,770 |
|
|
88,103 |
|
|
54,347 |
|
|
|
183,736 |
|
|
|
184,590 |
|
|
|
109,392 |
|
|
Other |
|
154,643 |
|
|
156,659 |
|
|
169,407 |
|
|
|
310,691 |
|
|
|
318,194 |
|
|
|
310,976 |
|
|
Adjusted Gross Margin |
$ |
1,536,757 |
|
$ |
1,544,877 |
|
$ |
1,259,523 |
|
|
$ |
2,829,315 |
|
|
$ |
2,847,830 |
|
|
$ |
2,354,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
Cruise Days |
|
5,781,750 |
- |
|
5,781,750 |
- |
|
5,014,083 |
|
|
|
11,278,856 |
|
- |
|
11,278,856 |
|
- |
|
9,989,523 |
|
|
Capacity
Days |
|
5,513,288 |
|
|
5,513,288 |
|
|
4,626,871 |
|
|
|
10,928,835 |
|
|
|
10,928,835 |
|
|
|
9,343,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue per Passenger Cruise Day |
$ |
381.46 |
|
$ |
383.21 |
|
$ |
331.92 |
|
|
$ |
357.08 |
|
|
$ |
359.17 |
|
|
$ |
307.11 |
|
|
Gross margin
per Passenger Cruise Day |
$ |
110.41 |
|
$ |
111.39 |
|
$ |
112.23 |
|
|
$ |
88.51 |
|
|
$ |
89.37 |
|
|
$ |
98.79 |
|
|
Net Per
Diem |
$ |
265.79 |
|
$ |
267.20 |
|
$ |
251.20 |
|
|
$ |
250.85 |
|
|
$ |
252.49 |
|
|
$ |
235.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
per Capacity Day |
$ |
115.79 |
|
$ |
116.81 |
|
$ |
121.62 |
|
|
$ |
91.35 |
|
|
$ |
92.23 |
|
|
$ |
105.62 |
|
|
Net
Yield |
$ |
278.74 |
|
$ |
280.21 |
|
$ |
272.22 |
|
|
$ |
258.89 |
|
|
$ |
260.58 |
|
|
$ |
251.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NORWEGIAN
CRUISE LINE HOLDINGS LTD. |
|
NON-GAAP
RECONCILING INFORMATION |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Cruise Cost, Net
Cruise Cost, Net Cruise Cost Excluding Fuel and Adjusted Net Cruise
Cost Excluding Fuel were calculated as follows (in thousands,
except Capacity Days and per Capacity Day data): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
June 30, |
|
June 30, |
|
|
|
|
2023 |
|
|
|
|
|
|
2023 |
|
|
|
|
|
|
|
Constant
Currency |
|
|
|
|
|
|
|
Constant
Currency |
|
|
|
|
|
|
|
2023 |
|
compared to 2019 |
|
|
2019 |
|
|
|
2023 |
|
|
compared to 2019 |
|
|
2019 |
|
|
Total cruise
operating expense |
$ |
1,383,610 |
|
$ |
1,388,105 |
|
$ |
958,424 |
|
|
$ |
2,664,028 |
|
|
$ |
2,677,966 |
|
|
$ |
1,785,075 |
|
|
Marketing,
general and |
|
|
|
|
|
|
|
|
|
|
|
|
administrative expense |
|
352,222 |
|
|
352,808 |
|
|
240,901 |
|
|
|
688,235 |
|
|
|
690,635 |
|
|
|
489,843 |
|
|
Gross Cruise
Cost |
|
1,735,832 |
|
|
1,740,913 |
|
|
1,199,325 |
|
|
|
3,352,263 |
|
|
|
3,368,601 |
|
|
|
2,274,918 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
Commissions,
transportation |
|
|
|
|
|
|
|
|
|
|
|
|
and other
expense |
|
506,855 |
|
|
508,877 |
|
|
297,691 |
|
|
|
916,539 |
|
|
|
921,583 |
|
|
|
526,955 |
|
|
Onboard and
other expense |
|
161,880 |
|
|
161,880 |
|
|
107,063 |
|
|
|
281,577 |
|
|
|
281,577 |
|
|
|
186,476 |
|
|
Net Cruise
Cost |
|
1,067,097 |
|
|
1,070,156 |
|
|
794,571 |
|
|
|
2,154,147 |
|
|
|
2,165,441 |
|
|
|
1,561,487 |
|
|
Less: Fuel
expense |
|
164,242 |
|
|
164,282 |
|
|
100,531 |
|
|
|
359,110 |
|
|
|
359,164 |
|
|
|
198,784 |
|
|
Net Cruise
Cost Excluding Fuel |
|
902,855 |
|
|
905,874 |
|
|
694,040 |
|
|
|
1,795,037 |
|
|
|
1,806,277 |
|
|
|
1,362,703 |
|
|
Less
Non-GAAP Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash
deferred compensation (1) |
|
578 |
|
|
578 |
|
|
534 |
|
|
|
1,156 |
|
|
|
1,156 |
|
|
|
1,068 |
|
|
Non-cash
share-based compensation (2) |
|
44,536 |
|
|
44,536 |
|
|
29,651 |
|
|
|
72,691 |
|
|
|
72,691 |
|
|
|
56,650 |
|
|
Redeployment
of Norwegian Joy (3) |
|
- |
|
|
- |
|
|
2,035 |
|
|
|
- |
|
|
|
- |
|
|
|
7,051 |
|
|
Adjusted Net
Cruise Cost Excluding Fuel |
$ |
857,741 |
|
$ |
860,760 |
|
$ |
661,820 |
|
|
$ |
1,721,190 |
|
|
$ |
1,732,430 |
|
|
$ |
1,297,934 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capacity
Days |
|
5,513,288 |
|
|
5,513,288 |
|
|
4,626,871 |
|
|
|
10,928,835 |
|
|
|
10,928,835 |
|
|
|
9,343,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Cruise
Cost per Capacity Day |
$ |
314.85 |
|
$ |
315.77 |
|
$ |
259.21 |
|
|
$ |
306.74 |
|
|
$ |
308.23 |
|
|
$ |
243.47 |
|
|
Net Cruise
Cost per Capacity Day |
$ |
193.55 |
|
$ |
194.10 |
|
$ |
171.73 |
|
|
$ |
197.11 |
|
|
$ |
198.14 |
|
|
$ |
167.11 |
|
|
Net Cruise
Cost Excluding Fuel per Capacity Day |
$ |
163.76 |
|
$ |
164.31 |
|
$ |
150.00 |
|
|
$ |
164.25 |
|
|
$ |
165.28 |
|
|
$ |
145.84 |
|
|
Adjusted Net
Cruise Cost Excluding Fuel per Capacity Day |
$ |
155.58 |
|
$ |
156.12 |
|
$ |
143.04 |
|
|
$ |
157.49 |
|
|
$ |
158.52 |
|
|
$ |
138.91 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Non-cash deferred
compensation expenses related to the crew pension plan and other
crew expenses, which are included in payroll and related
expense. |
|
(2) Non-cash
share-based compensation expenses related to equity awards, which
are included in marketing, general and administrative expense and
payroll and related expense. |
|
(3) Expenses related
to the redeployment of Norwegian Joy from Asia to the U.S. and the
closing of the Shanghai office, which are included in other cruise
operating expense and marketing, general and administrative
expense. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NORWEGIAN
CRUISE LINE HOLDINGS LTD. |
|
NON-GAAP
RECONCILING INFORMATION |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
(Loss) and Adjusted EPS were calculated as follows (in thousands,
except share and per share data): |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
$ |
86,116 |
|
$ |
(509,321 |
) |
|
$ |
(73,205 |
) |
|
$ |
(1,492,035 |
) |
|
Effect of
dilutive securities - exchangeable notes |
|
4,603 |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Net income
(loss) and assumed conversion of exchangeable notes |
|
90,719 |
|
|
(509,321 |
) |
|
|
(73,205 |
) |
|
|
(1,492,035 |
) |
|
Non-GAAP Adjustments: |
|
|
|
|
|
|
|
|
Non-cash deferred compensation (1) |
|
1,010 |
|
|
1,012 |
|
|
|
2,020 |
|
|
|
2,024 |
|
|
Non-cash share-based compensation (2) |
|
44,536 |
|
|
30,048 |
|
|
|
72,691 |
|
|
|
62,840 |
|
|
Extinguishment and modification of debt (3) |
|
719 |
|
|
- |
|
|
|
3,153 |
|
|
|
188,433 |
|
|
Adjusted Net Income (Loss) |
$ |
136,984 |
|
$ |
(478,261 |
) |
|
$ |
4,659 |
|
|
$ |
(1,238,738 |
) |
|
Diluted
weighted-average shares outstanding - Net income (loss) and assumed
conversion of exchangeable notes and Adjusted Net Income
(Loss) |
|
461,075,240 |
|
|
419,107,330 |
|
|
|
423,421,203 |
|
|
|
418,424,753 |
|
|
Diluted
EPS |
$ |
0.20 |
|
$ |
(1.22 |
) |
|
$ |
(0.17 |
) |
|
$ |
(3.57 |
) |
|
Adjusted EPS |
$ |
0.30 |
|
$ |
(1.14 |
) |
|
$ |
0.01 |
|
|
$ |
(2.96 |
) |
|
|
|
|
|
|
|
|
|
|
(1) Non-cash deferred
compensation expenses related to the crew pension plan and other
crew expenses, which are included in payroll and related expense
and other income (expense), net. |
|
|
(2) Non-cash
share-based compensation expenses related to equity awards, which
are included in marketing, general and administrative expense and
payroll and related expense. |
|
|
(3) Losses on
extinguishments of debt and modification of debt are included in
interest expense, net. |
|
|
|
|
|
|
|
NORWEGIAN
CRUISE LINE HOLDINGS LTD. |
|
NON-GAAP
RECONCILING INFORMATION |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
EBITDA and
Adjusted EBITDA were calculated as follows (in thousands): |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
$ |
86,116 |
|
$ |
(509,321 |
) |
|
$ |
(73,205 |
) |
|
$ |
(1,492,035 |
) |
|
Interest
expense, net |
|
177,692 |
|
|
144,377 |
|
|
|
348,949 |
|
|
|
472,062 |
|
|
Income tax
(benefit) expense |
|
694 |
|
|
(867 |
) |
|
|
(9,479 |
) |
|
|
3,526 |
|
|
Depreciation
and amortization expense |
|
197,115 |
|
|
181,587 |
|
|
|
391,905 |
|
|
|
360,663 |
|
|
EBITDA |
|
461,617 |
|
|
(184,224 |
) |
|
|
658,170 |
|
|
|
(655,784 |
) |
|
|
|
|
|
|
|
|
|
|
Other
(income) expense, net (1) |
|
8,043 |
|
|
(30,991 |
) |
|
|
16,998 |
|
|
|
(69,111 |
) |
|
Other Non-GAAP Adjustments: |
|
|
|
|
|
|
|
|
Non-cash deferred compensation (2) |
|
578 |
|
|
699 |
|
|
|
1,156 |
|
|
|
1,398 |
|
|
Non-cash share-based compensation (3) |
|
44,536 |
|
|
30,048 |
|
|
|
72,691 |
|
|
|
62,840 |
|
|
Adjusted EBITDA |
$ |
514,774 |
|
$ |
(184,468 |
) |
|
$ |
749,015 |
|
|
$ |
(660,657 |
) |
|
|
|
|
|
|
|
|
|
|
(1) Primarily consists
of gains and losses, net for foreign currency remeasurements. |
|
(2) Non-cash deferred
compensation expenses related to the crew pension plan and other
crew expenses, which are included in payroll and related
expense. |
|
|
(3) Non-cash
share-based compensation expenses related to equity awards, which
are included in marketing, general and administrative expense and
payroll and related expense. |
|
|
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