Company Posts Record Single Quarter
Revenue and Earnings
Norwegian Cruise Line Holdings Ltd. (Nasdaq:NCLH) (together with
NCL Corporation Ltd., “Norwegian Cruise Line Holdings”, “Norwegian”
or the “Company,”) today reported financial results for the third
quarter ended September 30, 2016, and provided guidance for the
fourth quarter and full year 2016.
Highlights
- The Company generated GAAP net income of $342.4 million or EPS
of $1.50 compared to $251.8 million or $1.09 in the prior
year. Adjusted Net Income was $369.3 million or Adjusted EPS
of $1.62 compared to $311.1 million or $1.35 in the prior
year.
- Total revenue increased 15.6% to $1.5 billion. Gross Yield
increased 1.5%. Adjusted Net Yield increased 3.4% on a
Constant Currency basis.
- The Company expects to generate record earnings with full year
2016 Adjusted EPS to be in the range of $3.38 to $3.42.
"In 1966, the M/S Sunward departed on her first
voyage from Miami to the Caribbean, marking not just the launch of
Norwegian Cruise Line, but the modern cruise industry as we know it
today," said Frank Del Rio, president and chief executive officer
of Norwegian Cruise Line Holdings Ltd. "Fast forward fifty
years, where we have reached yet another milestone, reporting the
highest single quarter revenue and earnings in our history,
bolstered by the addition of Norwegian Escape, Oceania Cruises'
Sirena and Seven Seas Explorer to our fleet," continued Del
Rio.
Third Quarter 2016 Results
GAAP net income was $342.4 million or EPS of
$1.50 compared to $251.8 million or $1.09 in the prior year.
The Company generated Adjusted Net Income of $369.3 million or
Adjusted EPS of $1.62 compared to $311.1 million or $1.35 in the
prior year.
Revenue increased 15.6% to $1.5 billion compared
to $1.3 billion in 2015. Adjusted Net Revenue in the period
increased 17.0% to $1.1 billion compared to $978.2 million in
2015. These increases were primarily attributed to the
addition of Norwegian Escape, Oceania Sirena, and Regent Seven Seas
Explorer to the fleet. Gross Yield increased 1.5% while
Adjusted Net Yield improved 3.4% on a Constant Currency basis and
2.8% on an as reported basis primarily due to improved pricing.
Gross Cruise Cost increased 10.5% in 2016
compared to 2015 due to an increase in total cruise operating
expense as a result of an increase in Capacity Days along with an
increase in marketing expense. Gross Cruise Costs per
Capacity Day decreased 3.0%. Adjusted Net Cruise Cost
Excluding Fuel per Capacity Day increased 1.7% on both a Constant
Currency and as reported basis primarily due an increase in
marketing expenses.
Fuel price per metric ton, net of hedges
decreased 11.5% to $500 from $565 in 2015. The Company
reported fuel expense of $86.3 million in the period. In
addition, a loss of $2.5 million was recorded in other expense in
2016 related to the ineffective portion of the Company’s fuel hedge
portfolio due to market volatility.
Interest expense, net increased to $60.7 million
in 2016 from $49.8 million in 2015 primarily due to an increase in
average debt balances outstanding primarily associated with the
delivery of Norwegian Escape in October 2015 and Seven Seas
Explorer in June 2016 as well as slightly higher interest rates due
to an increase in LIBOR rates.
Other expense was $5.3 million in 2016 compared
to $1.7 million in 2015. In 2016, the expense was primarily
related to unrealized and realized losses on fuel swap derivative
hedge contracts and foreign exchange derivative hedge contracts and
foreign currency transaction losses.
Sale of Hawaii Land-based Operations
In the first quarter of 2016, the Company
executed an agreement to divest its interest in a certain
land-based operation in Hawaii. The amount of the transaction is
considered immaterial to the Company’s consolidated financial
statements. The agreement is subject to customary closing
conditions, including receipt of all required regulatory approvals
which are still pending; therefore, the Company no longer
anticipates the transaction will close in 2016. The Company’s
third quarter financial results include the results from this
operation. For purposes of comparison to the guidance
provided by the Company in its prior release, key operational
metrics excluding the results of this operation are as follows:
- Gross Yield growth would have been 1.5%. Adjusted Net
Yield growth would have been 3.5% on a Constant Currency basis or
2.9% on an as reported basis (excluding the results of the
aforementioned operation).
- Gross Cruise Costs per Capacity Day would have decreased
2.9%. Adjusted Net Cruise Costs Excluding Fuel per Capacity
Day growth would have been 1.9% on both a Constant Currency and as
reported basis (excluding the results of the aforementioned
operation).
Company Outlook
“We are on track to deliver robust double-digit
growth in Adjusted EPS in 2016, despite headwinds from geopolitical
events earlier in the year which dampened demand for Mediterranean
sailings,” said Wendy Beck, executive vice president and chief
financial officer of Norwegian Cruise Line Holdings Ltd. “Looking
to the first half of 2017, where deployment is weighted to
Caribbean sailings, advanced bookings are ahead of prior year's
record levels at higher prices, while an early look at the full
year shows occupancy commensurate with prior year at this same time
at slightly lower prices. Recent significant weakening of
certain foreign currencies, primarily the British Pound, against
the U.S. dollar, combined with an increase in fuel prices have
placed pressure on expectations for the coming year. Despite
these headwinds, we still anticipate delivering double-digit growth
in Adjusted EPS in 2017.”
2016 Guidance and
Sensitivities
In addition to announcing the results for the
third quarter, the Company also provided guidance for the fourth
quarter and full year 2016, along with accompanying sensitivities.
The Company does not provide guidance 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
2016 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.
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Fourth Quarter 2016 |
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Full Year 2016 |
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As Reported |
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Constant
Currency |
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As
Reported |
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Constant
Currency |
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Adjusted Net Yield |
Approx. (2.75%) |
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Approx. (2.25%) |
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Approx. 1.0% |
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Approx. 1.75% |
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Adjusted Net Cruise Cost Excluding Fuel per
Capacity Day |
Approx. (2.0%) |
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Approx. (2.0%) |
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Approx. 1.25% |
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Approx. 1.25% |
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Adjusted EPS |
$0.53 to $0.57 |
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$3.38 to $3.42 |
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Adjusted Depreciation and Amortization (1) |
$109 to $113
million |
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$410 to $414
million |
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Adjusted Interest Expense, net (2) |
Approx. $60
million |
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Approx. $238
million |
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Effect on Adjusted EPS of
a 1% change in Adjusted Net Yield (3) |
$ |
0.04 |
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$ |
0.04 |
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(1) Excludes $5.3 million and $21.1 million of amortization of
intangible assets related to the Acquisition of Prestige in the
fourth quarter and full year 2016, respectively.(2) Excludes $11.4
million for the write-off of deferred financing fees in the full
year 2016.(3) Based on midpoint of guidance.
The following reflects the Company’s
expectations regarding fuel consumption and pricing, along with
accompanying sensitivities.
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Fourth Quarter 2016 |
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Full Year 2016 |
Fuel consumption in metric tons |
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182,000 |
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713,000 |
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Fuel price per metric ton, net of hedges |
$ |
453 |
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$ |
480 |
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Effect on Adjusted EPS of a 10% change in fuel
prices, net of hedges |
$ |
0.01 |
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$ |
0.01 |
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As of September 30, 2016, the Company had hedged
approximately 90%, 79%, 57%, 48% and 5% of its total projected
metric tons of fuel consumption for the remainder of 2016 and full
year 2017, 2018, 2019 and 2020, respectively. The following
table provides amounts hedged and price per barrel of heavy fuel
oil (“HFO”) and marine gas oil (“MGO”) which are hedged utilizing
U.S. Gulf Coast 3% (“USGC”) and Brent,
respectively.
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Q4 2016 |
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2017 |
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2018 |
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2019 |
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2020 |
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% of HFO Consumption Hedged |
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91 |
% |
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81 |
% |
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68 |
% |
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56 |
% |
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6 |
% |
Average
USGC Price / Barrel |
$ |
63.47 |
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$ |
59.69 |
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$ |
54.90 |
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$ |
47.82 |
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$ |
44.35 |
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% of MGO Consumption Hedged |
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87 |
% |
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75 |
% |
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22 |
% |
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21 |
% |
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0 |
% |
Average Brent Price / Barrel |
$ |
35.01 |
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$ |
41.11 |
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$ |
46.50 |
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$ |
49.25 |
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- |
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The following reflects the foreign currency
exchange rates the Company used in its guidance.
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Current
Guidance |
Prior Guidance |
Euro |
$ |
1.10 |
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$ |
1.11 |
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British pound |
$ |
1.22 |
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$ |
1.30 |
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Australian Dollar |
$ |
0.76 |
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$ |
0.75 |
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Canadian Dollar |
$ |
0.76 |
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$ |
0.77 |
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Future capital commitments consist of contracted
commitments, including ship construction contracts, and future
expected capital expenditures necessary for operations. As of
September 30, 2016, anticipated capital expenditures were $0.2
billion for the remainder of 2016 and $1.3 billion for each of the
years ending December 31, 2017 and 2018, of which the Company has
export credit financing in place for the expenditures related to
ship construction contracts of $0.8 billion for 2017 and $0.7
billion for 2018.
Company Updates and Other Business
Highlights
Designed for Alaska Cruising, Norwegian Bliss to
Debut in 2018
The Company recently announced that the third
ship in the line’s Breakaway Plus Class Ships, Norwegian Bliss,
will be the first cruise ship custom-built with features and
amenities for the ultimate Alaska cruise experience. Norwegian
Bliss will pioneer a new era of Alaska cruising beginning June 2018
and will cruise to America’s Last Frontier from Seattle. She
will also be the first Norwegian Cruise Line ship to make its debut
in the Emerald City. Norwegian Bliss will be approximately
167,800 gross tons and accommodate 4,000 guests. The ship is
scheduled for delivery in spring 2018.
Continuing Norwegian’s tradition of decorating
each ship’s hull with signature art, the Company has also announced
that the world’s premier marine life artist, Wyland, has been
commissioned to design the hull artwork for Norwegian Bliss.
Known for his iconic whale murals, marine life paintings and
sculptures, Wyland has inspired generations to be passionate about
the importance of marine life conservation. In addition to
the reveal of her spectacular hull artwork, the first piece of
steel was cut at MEYER WERFT in Papenburg, Germany on October 28th,
symbolizing the start of the ship’s construction.
Norwegian Joy Culinary Offerings and Upscale
Shopping Venue Unveiled
The Company recently announced the culinary
offerings planned for the Company’s first cruise ship custom built
for the Chinese market, Norwegian Joy. The ship will feature
the most extensive range of restaurants ever offered on a cruise
ship, which have been tailor-made for local palates. Additionally,
the Company recently unveiled that the upscale shopping venue on
board Norwegian Joy will be the largest in Norwegian’s fleet,
complete with everything from exceptional duty-free shops to
high-end international brands. Prestigious retail brands already
confirmed to be on board include Cartier, Omega, Bvlgari, Salvatore
Ferragamo, and Versace, among many.
Norwegian Jewel, Pearl and Gem Retrofitted with
Exhaust Gas Scrubber Technology
As part of the Company’s continued commitment to
the environment, Norwegian Jewel, Norwegian Pearl and Norwegian Gem
were each successfully retrofitted with a new exhaust gas scrubber
system this quarter. These scrubbers aim to significantly
reduce air emissions, thus reducing the fleet’s environmental
footprint. The ships’ new lightweight in-line scrubbers are a
hybrid technology developed by Yara Marine Technologies that are
able to operate in dry mode, open loop and closed loop. Five
scrubbers were installed, one per engine, covering the whole
propulsion system. Collectively, they are capable of reducing
the emission of sulfur into the air by up to 99 percent and also
reducing 85 percent of particulate emission into the air.
The Company currently has five ships outfitted
with exhaust gas scrubber technology with Norwegian Pearl and Gem
joining Norwegian Jewel, Escape and Pride of America.
Norwegian Jade and Norwegian Sun are scheduled for
retrofitting in the first and second quarter of 2017,
respectively. In addition, all remaining ships on order for
the Norwegian Cruise Line brand will also be outfitted with similar
technology.
Norwegian Cruise Line Honored at World Travel
Awards
Norwegian Cruise Line has been named “North
America’s Leading Cruise Line” for the first time, along with being
honored as the “Caribbean’s Leading Cruise Line” for the fourth
consecutive year at the 2016 World Travel Awards. Norwegian also
received awards for “Europe’s Leading Cruise Line” for the ninth
consecutive year, “Europe’s Responsible Tourism Award” for the
second consecutive year and the award for “World’s Best Cruise Spa”
for the Mandara Spa® on board Norwegian Cruise Line.
Norwegian Cruise Line Expands Partnership with
Margaritaville®
Building on its success and popularity on board
Norwegian’s newest ship, Norwegian Escape, the Company recently
announced the expansion of its exclusive partnership with
Margaritaville®. Norwegian will introduce new Margaritaville® at
Sea restaurants on board Norwegian Getaway and Norwegian Breakaway
this fall. Margaritaville® at Sea will bring to life nostalgic
island moments with a tropical menu that features signature items
like the Cheeseburger in Paradise and Who's to Blame Margarita,
available à la carte, in an open air-eatery offering stunning ocean
views.
Conference Call
The Company has scheduled a conference call for
Wednesday, November 9, 2016 at 10:00 a.m. Eastern Time to discuss
third quarter results. A link to the live webcast can be
found on the Company’s Investor Relations website at
www.nclhltdinvestor.com. 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.
(Nasdaq: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 24 ships with
approximately 46,500 berths, these brands offer itineraries to more
than 510 destinations worldwide. The Company will introduce four
additional ships through 2020.
Norwegian Cruise Line is an innovator in cruise
travel with a history of breaking the boundaries of traditional
cruising, most notably with the introduction of "Freestyle
Cruising," which revolutionized the industry by giving guests more
freedom and flexibility. Norwegian Cruise Line offers The Haven by
Norwegian, a luxury enclave with suites, private pools and dining,
concierge service and personal butlers. Oceania Cruises offers an
unrivaled vacation experience renowned for the finest cuisine at
sea and destination-rich itineraries that span the globe. Expertly
crafted voyages aboard designer-inspired, intimate ships call on
ports across Europe, Asia, Africa, Australia, New Zealand, the
South Pacific and the Americas. Regent Seven Seas Cruises offers
the industry’s most inclusive luxury experience aboard its
all-suite fleet. Accompanying the unprecedented personalized
service, gourmet cuisine and world-class entertainment, a voyage
with Regent Seven Seas Cruises also includes round-trip air
transportation to the port of origin with business class air
provided for any intercontinental flights, fine wines and spirits
throughout the ship, unlimited free internet access, ground
transfers, pre-paid gratuities and complimentary sightseeing
excursions at every destination visited.
Terminology
Acquisition of Prestige. In November 2014,
pursuant to the Merger Agreement, we acquired Prestige.
Adjusted Depreciation and Amortization.
Depreciation and amortization adjusted to exclude amortization of
intangible assets related to the Acquisition of Prestige.
Adjusted EBITDA. EBITDA adjusted for other
income (expense) and other supplemental adjustments.
Adjusted EPS. Adjusted Net Income divided by the
number of diluted weighted-average shares outstanding.
Adjusted Free Cash Flow. Free Cash Flow adjusted
for proceeds from ship construction financing facilities and other
supplemental adjustments.
Adjusted Net Cruise Cost Excluding Fuel. Net
Cruise Cost less fuel expense adjusted for supplemental
adjustments.
Adjusted Net Income. Net income
adjusted for supplemental adjustments.
Adjusted Net Revenue. Net Revenue adjusted for
supplemental adjustments.
Adjusted Net Yield. Net Yield adjusted for
supplemental adjustments.
Adjusted Interest Expense. Interest
expense adjusted to exclude write-offs of deferred financing fees
related to the refinancing of certain of our credit facilities.
Berths. Double occupancy capacity per
cabin (single occupancy per studio cabin) even though many cabins
can accommodate three or more passengers.
Breakaway Class Ships. Norwegian Breakaway and Norwegian
Getaway.
Breakaway Plus Class Ships. The next generation of ships which
are similar in design and innovation to Breakaway Class Ships.
Capacity Days. Available Berths multiplied
by the number of cruise days for the period.
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 per share.
Explorer Class Ships. Regent’s Seven Seas
Explorer and a second ship on order.
Free Cash Flow. Net cash provided by operating
activities less capital expenditures for ship construction,
business enhancements and other.
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.
Gross Tons. A unit of enclosed passenger space
on a cruise ship, such that one gross ton = 100 cubic feet or 2.831
cubic meters.
Gross Yield. Total revenue per Capacity
Day.
Management NCL Corporation Units. NCL
Corporation, Ltd.’s (“NCLC”) previously outstanding profits
interests issued to management (or former management) of NCLC which
were converted into units in NCLC. All Management NCL
Corporation Units were exchanged for NCLH ordinary shares and
restricted shares in the fourth quarter of 2014.
Merger Agreement. Agreement and Plan of Merger, dated as of
September 2, 2014, by and among Prestige, NCLH, Portland Merger
Sub, Inc. and Apollo Management, L.P., as amended, for the
Acquisition of Prestige.
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 Revenue. Total revenue less commissions,
transportation and other expense and onboard and other expense.
Net Yield. Net Revenue per Capacity Day.
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.
Passenger Cruise Days. The number of
passengers carried for the period, multiplied by the number of days
in their respective cruises.
Secondary Equity Offering(s). Secondary public
offering(s) of NCLH’s ordinary shares in December 2015, August
2015, May 2015, March 2015, March 2014, December 2013 and August
2013.
Shipboard Retirement Plan. An unfunded defined
benefit pension plan for certain crew members which computes
benefits based on years of service, subject to certain
requirements.
Non-GAAP Financial Measures
We use certain non-GAAP financial measures, such
as Net Revenue, Adjusted Net Revenue, Net Yield, Adjusted Net
Yield, Net Cruise Cost, Adjusted Net Cruise Cost Excluding Fuel,
Adjusted EBITDA, Adjusted Net Income and Adjusted EPS, to enable us
to analyze our performance. See “Terminology” for the definitions
of these non-GAAP financial measures. We utilize Net Revenue and
Net Yield to manage our business on a day-to-day basis and believe
that they are the most relevant measures of our revenue performance
because they reflect the revenue earned by us net of significant
variable costs. In measuring our ability to control costs in a
manner that positively impacts net income, we believe changes in
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 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. Adjusted EBITDA is not a
defined term under GAAP. Adjusted EBITDA is not intended to be a
measure of liquidity or cash flows from operations or a measure
comparable to net income 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 Revenue and Adjusted
Net Yield, which exclude certain business combination accounting
entries, are non-GAAP financial measures that we believe are useful
as supplemental measures in evaluating the performance of our
operating business and provide greater transparency into our
results of operations. Adjusted Net Income and Adjusted EPS are
non-GAAP financial measures that exclude certain amounts and are
used to supplement GAAP net income and EPS. We use Adjusted Net
Income 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
Revenue, Adjusted Net Yield, Adjusted Net Income, and Adjusted EPS
may not be indicative of future adjustments or results. For
example, for the nine months ended September 30, 2016 we incurred
an $11.2 million write-off, primarily due to deferred financing
fees due to the refinancing of certain credit facilities. We
included the deferred financing fees as an adjustment in the
reconciliation of Adjusted Net Income since these amounts are not
representative of our day-to-day operations and we have included
other write-offs of deferred financing fees as adjustments in prior
periods.
Management believes Free Cash Flow provides
investors with a useful financial metric to assess our ability to
service and repay our debt and to pursue opportunities to enhance
our growth after making the capital investments required to support
ongoing business operations and long term value creation. Free Cash
Flow does not represent the residual cash flow available for
discretionary expenditures as it excludes certain mandatory
expenditures such as repayment of maturing debt. Management uses
Free Cash Flow as a measure to assess both business performance and
overall liquidity.
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 StatementsCertain statements in this
release constitute 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 in this release, including, without
limitation, those regarding our business strategy, financial
position, results of operations, plans, prospects and objectives of
management for future operations (including development plans and
objectives relating to our activities), 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 and related factors,
such as fluctuating or increasing levels of 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 risks and increased costs
associated with operating internationally; an impairment of our
tradenames or goodwill which could adversely affect our financial
condition and operating results; our efforts to expand our business
into new markets; adverse events impacting the security of travel,
such as terrorist acts, acts of piracy, armed conflict and threats
thereof and other international events; breaches in data security
or other disturbances to our information technology and other
networks; the spread of epidemics and viral outbreaks; adverse
incidents involving cruise ships; changes in fuel prices and/or
other cruise operating costs; our hedging strategies; our
inability to obtain adequate insurance coverage; our substantial
indebtedness, including the ability to raise additional capital to
fund our operations, and to generate the necessary amount of cash
to service our existing debt; restrictions in the agreements
governing our indebtedness that limit our flexibility in operating
our business; the significant portion of our assets pledged as
collateral under our existing debt agreements and the ability of
our creditors to accelerate the repayment of our indebtedness; our
ability to incur significantly more debt despite our substantial
existing indebtedness; 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; fluctuations in foreign currency exchange
rates; our inability to recruit or retain qualified personnel or
the loss of key personnel; future changes relating to how external
distribution channels sell and market our cruises; our reliance on
third parties to provide hotel management services to certain ships
and certain other services; delays in our shipbuilding program and
ship repairs, maintenance and refurbishments; future increases in
the price of, or major changes or reduction in, commercial airline
services; seasonal variations in passenger fare rates and occupancy
levels at different times of the year; our ability to keep pace
with developments in technology; amendments to our collective
bargaining agreements for crew members and other employee relation
issues; the continued availability of attractive port destinations;
pending or threatened litigation, investigations and enforcement
actions; changes involving the tax and environmental regulatory
regimes in which we operate; and other factors set forth under
"Risk Factors" in our most recently filed Annual Report on Form
10-K and Quarterly Report on Form 10-Q and subsequent filings by
the Company with the Securities and Exchange Commission. The above
examples are not exhaustive and new risks emerge from time to time.
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 will 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 contained herein 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NORWEGIAN CRUISE LINE HOLDINGS
LTD. |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Unaudited) |
(in thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
Passenger ticket |
$ |
1,071,815 |
|
|
$ |
948,059 |
|
|
$ |
2,630,405 |
|
|
$ |
2,406,533 |
|
|
Onboard and other |
|
412,921 |
|
|
|
336,851 |
|
|
|
1,118,798 |
|
|
|
901,992 |
|
|
|
|
|
Total
revenue |
|
1,484,736 |
|
|
|
1,284,910 |
|
|
|
3,749,203 |
|
|
|
3,308,525 |
|
Cruise operating expense |
|
|
|
|
|
|
|
|
Commissions, transportation and other |
|
249,519 |
|
|
|
225,586 |
|
|
|
618,492 |
|
|
|
589,851 |
|
|
Onboard and other |
|
90,661 |
|
|
|
84,171 |
|
|
|
230,416 |
|
|
|
210,701 |
|
|
Payroll and related |
|
193,122 |
|
|
|
170,694 |
|
|
|
554,741 |
|
|
|
490,253 |
|
|
Fuel |
|
|
|
|
86,250 |
|
|
|
88,829 |
|
|
|
248,529 |
|
|
|
267,784 |
|
|
Food |
|
|
|
|
50,902 |
|
|
|
46,419 |
|
|
|
151,674 |
|
|
|
131,969 |
|
|
Other |
|
|
|
114,280 |
|
|
|
102,023 |
|
|
|
351,263 |
|
|
|
307,143 |
|
|
|
|
|
Total
cruise operating expense |
|
784,734 |
|
|
|
717,722 |
|
|
|
2,155,115 |
|
|
|
1,997,701 |
|
Other operating expense |
|
|
|
|
|
|
|
|
Marketing, general and administrative |
|
174,813 |
|
|
|
150,558 |
|
|
|
504,694 |
|
|
|
411,879 |
|
|
Depreciation and amortization |
|
111,575 |
|
|
|
109,798 |
|
|
|
317,480 |
|
|
|
314,381 |
|
|
|
|
|
Total other
operating expense |
|
286,388 |
|
|
|
260,356 |
|
|
|
822,174 |
|
|
|
726,260 |
|
|
|
|
|
|
Operating
income |
|
413,614 |
|
|
|
306,832 |
|
|
|
771,914 |
|
|
|
584,564 |
|
Non-operating income (expense) |
|
|
|
|
|
|
|
|
Interest expense, net |
|
(60,662 |
) |
|
|
(49,784 |
) |
|
|
(188,836 |
) |
|
|
(153,219 |
) |
|
Other expense |
|
(5,333 |
) |
|
|
(1,733 |
) |
|
|
(13,281 |
) |
|
|
(35,589 |
) |
|
|
|
|
Total
non-operating income (expense) |
|
(65,995 |
) |
|
|
(51,517 |
) |
|
|
(202,117 |
) |
|
|
(188,808 |
) |
Net
income before income taxes |
|
347,619 |
|
|
|
255,315 |
|
|
|
569,797 |
|
|
|
395,756 |
|
Income tax expense |
|
(5,241 |
) |
|
|
(3,528 |
) |
|
|
(8,944 |
) |
|
|
(6,931 |
) |
Net
income |
$ |
342,378 |
|
|
$ |
251,787 |
|
|
$ |
560,853 |
|
|
$ |
388,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding |
|
|
|
|
|
Basic |
|
|
|
227,096,142 |
|
|
|
227,384,616 |
|
|
|
227,102,560 |
|
|
|
225,805,901 |
|
|
Diluted |
|
|
|
227,598,607 |
|
|
|
230,274,756 |
|
|
|
227,859,617 |
|
|
|
229,860,900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
|
Basic |
|
|
$ |
1.51 |
|
|
$ |
1.11 |
|
|
$ |
2.47 |
|
|
$ |
1.72 |
|
|
Diluted |
|
|
$ |
1.50 |
|
|
$ |
1.09 |
|
|
$ |
2.46 |
|
|
$ |
1.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NORWEGIAN CRUISE LINE HOLDINGS
LTD. |
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME |
|
(Unaudited) |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
|
|
September 30, |
|
|
September 30, |
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
342,378 |
|
|
$ |
251,787 |
|
|
|
$ |
560,853 |
|
|
$ |
388,825 |
|
|
|
Other
comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
Shipboard Retirement Plan |
|
|
107 |
|
|
|
119 |
|
|
|
|
323 |
|
|
|
358 |
|
|
|
Cash flow hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
Net
unrealized gain (loss) |
|
|
37,051 |
|
|
|
(105,227 |
) |
|
|
|
112,508 |
|
|
|
(138,501 |
) |
|
|
|
Amount
realized and reclassified into earnings |
|
|
18,327 |
|
|
|
13,132 |
|
|
|
|
76,658 |
|
|
|
61,582 |
|
|
|
|
Total
other comprehensive income (loss) |
|
|
55,485 |
|
|
|
(91,976 |
) |
|
|
|
189,489 |
|
|
|
(76,561 |
) |
|
|
Total
comprehensive income |
|
$ |
397,863 |
|
|
$ |
159,811 |
|
|
|
$ |
750,342 |
|
|
$ |
312,264 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NORWEGIAN CRUISE LINE HOLDINGS
LTD. |
|
CONSOLIDATED BALANCE
SHEETS |
(Unaudited) |
|
(in thousands, except share
data) |
|
|
|
September 30, |
|
|
December 31, |
|
|
|
|
2016 |
|
|
|
|
2015 |
|
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
155,431 |
|
|
|
$ |
115,937 |
|
|
Accounts
receivable, net |
|
|
55,838 |
|
|
|
|
44,996 |
|
|
Inventories |
|
|
65,983 |
|
|
|
|
58,173 |
|
|
Prepaid
expenses and other assets |
|
|
159,447 |
|
|
|
|
121,305 |
|
|
Total
current assets |
|
|
436,699 |
|
|
|
|
340,411 |
|
|
Property and equipment,
net |
|
|
10,054,220 |
|
|
|
|
9,458,805 |
|
|
Goodwill |
|
|
1,388,931 |
|
|
|
|
1,388,931 |
|
|
Tradenames |
|
|
817,525 |
|
|
|
|
817,525 |
|
|
Other long-term
assets |
|
|
245,965 |
|
|
|
|
259,085 |
|
|
Total
assets |
|
$ |
12,943,340 |
|
|
|
$ |
12,264,757 |
|
|
Liabilities and
shareholders' equity |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Current
portion of long-term debt |
|
$ |
566,911 |
|
|
|
$ |
629,840 |
|
|
Accounts
payable |
|
|
51,494 |
|
|
|
|
51,369 |
|
|
Accrued
expenses and other liabilities |
|
|
520,079 |
|
|
|
|
640,568 |
|
|
Due to
affiliate |
|
|
- |
|
|
|
|
20,769 |
|
|
Advance
ticket sales |
|
|
1,210,505 |
|
|
|
|
1,023,973 |
|
|
Total
current liabilities |
|
|
2,348,989 |
|
|
|
|
2,366,519 |
|
|
Long-term debt |
|
|
5,815,248 |
|
|
|
|
5,767,697 |
|
|
Other long-term
liabilities |
|
|
242,376 |
|
|
|
|
349,661 |
|
|
Total
liabilities |
|
|
8,406,613 |
|
|
|
|
8,483,877 |
|
|
Commitments and
contingencies |
|
|
|
|
|
|
Shareholders'
equity: |
|
|
|
|
|
|
Ordinary
shares, $.001 par value; 490,000,000 shares authorized; 232,467,409
shares issued |
|
|
|
|
|
|
and
227,155,448 shares outstanding at September 30, 2016 and
232,179,786 shares issued and |
|
|
|
|
|
|
227,815,301 shares outstanding at December 31, 2015 |
|
|
232 |
|
|
|
|
232 |
|
|
Additional paid-in capital |
|
|
3,870,040 |
|
|
|
|
3,814,536 |
|
|
Accumulated other comprehensive income (loss) |
|
|
(223,161 |
) |
|
|
|
(412,650 |
) |
|
Retained
earnings |
|
|
1,128,871 |
|
|
|
|
568,018 |
|
|
Treasury
shares (5,311,961 and 4,364,485 ordinary shares at September 30,
2016 and December 31, 2015, |
|
|
|
|
|
|
|
|
respectively, at cost) |
|
|
(239,255 |
) |
|
|
|
(189,256 |
) |
|
Total
shareholders' equity |
|
|
4,536,727 |
|
|
|
|
3,780,880 |
|
|
Total
liabilities and shareholders' equity |
|
$ |
12,943,340 |
|
|
|
$ |
12,264,757 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NORWEGIAN CRUISE LINE HOLDINGS
LTD. |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
|
|
|
|
September 30, |
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
Cash flows from operating activities |
|
|
|
|
Net
income |
|
$ |
560,853 |
|
|
$ |
388,825 |
|
Adjustments
to reconcile net income to |
|
|
|
|
net cash provided by operating activities: |
|
|
|
|
|
Depreciation and amortization expense |
|
|
327,366 |
|
|
|
327,861 |
|
|
Loss on derivatives |
|
|
1,007 |
|
|
|
21,893 |
|
|
Deferred income taxes, net |
|
|
707 |
|
|
|
858 |
|
|
Gain on contingent consideration |
|
|
- |
|
|
|
(43,400 |
) |
|
Write-off of deferred financing fees |
|
|
11,537 |
|
|
|
195 |
|
|
Provision for bad debts and inventory |
|
|
1,767 |
|
|
|
- |
|
|
Share-based compensation expense |
|
|
48,289 |
|
|
|
27,857 |
|
Changes in
operating assets and liabilities: |
|
|
|
|
|
Accounts receivable, net |
|
|
(11,286 |
) |
|
|
(9,563 |
) |
|
Inventories |
|
|
(9,133 |
) |
|
|
1,609 |
|
|
Prepaid expenses and other assets |
|
|
(16,197 |
) |
|
|
(599 |
) |
|
Accounts payable |
|
|
2,551 |
|
|
|
(57,837 |
) |
|
Accrued expenses and other liabilities |
|
|
(9,149 |
) |
|
|
6,996 |
|
|
Advance ticket sales |
|
|
180,447 |
|
|
|
308,691 |
|
|
Net cash provided by operating activities |
|
|
1,088,759 |
|
|
|
973,386 |
|
Cash flows from investing activities |
|
|
|
|
Additions
to property and equipment, net |
|
|
(915,936 |
) |
|
|
(330,808 |
) |
Settlement
of derivatives |
|
|
(34,300 |
) |
|
|
1,090 |
|
Investment
in trademark |
|
|
- |
|
|
|
(750 |
) |
|
Net cash used in investing activities |
|
|
(950,236 |
) |
|
|
(330,468 |
) |
Cash flows from financing activities |
|
|
|
|
Repayments
of long-term debt |
|
|
(2,687,621 |
) |
|
|
(908,677 |
) |
Repayments
to Affiliate |
|
|
(18,522 |
) |
|
|
(18,521 |
) |
Proceeds
from long-term debt |
|
|
2,687,355 |
|
|
|
375,751 |
|
Proceeds
from the exercise of share options |
|
|
4,784 |
|
|
|
66,527 |
|
Proceeds
from employee share purchase plan |
|
|
2,431 |
|
|
|
858 |
|
Purchases
of treasury shares |
|
|
(49,999 |
) |
|
|
(7,425 |
) |
Deferred
financing fees and other |
|
|
(37,457 |
) |
|
|
(6,075 |
) |
|
Net cash used in financing activities |
|
|
(99,029 |
) |
|
|
(497,562 |
) |
|
Net increase in cash and cash equivalents |
|
|
39,494 |
|
|
|
145,356 |
|
Cash and
cash equivalents at beginning of the period |
|
|
115,937 |
|
|
|
84,824 |
|
Cash and
cash equivalents at end of the period |
|
$ |
155,431 |
|
|
$ |
230,180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NORWEGIAN CRUISE LINE HOLDINGS
LTD. |
|
NON-GAAP RECONCILING INFORMATION |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
sets forth selected statistical information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passengers carried |
|
|
|
635,654 |
|
|
|
574,011 |
|
|
|
1,761,967 |
|
|
|
1,615,213 |
|
|
|
|
|
Passenger Cruise
Days |
|
|
|
4,674,286 |
|
|
|
4,208,605 |
|
|
|
13,196,600 |
|
|
|
11,925,493 |
|
|
|
|
|
Capacity Days |
|
|
|
4,209,562 |
|
|
|
3,696,549 |
|
|
|
12,175,012 |
|
|
|
10,887,160 |
|
|
|
|
|
Occupancy
Percentage |
|
|
|
111.0 |
% |
|
|
113.9 |
% |
|
|
108.4 |
% |
|
|
109.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Revenue, Adjusted Net Revenue, Gross Yield, Net Yield and Adjusted
Net Yield were calculated as follows (in thousands, except Capacity
Days and Yield data): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
|
|
|
2016 |
|
|
|
|
|
|
|
2016 |
|
|
|
|
|
|
|
|
Constant |
|
|
|
|
|
Constant |
|
|
|
|
|
|
2016 |
|
|
Currency |
|
|
2015 |
|
|
|
2016 |
|
|
Currency |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger ticket
revenue |
$ |
1,071,815 |
|
|
$ |
1,080,784 |
|
|
$ |
948,059 |
|
|
$ |
2,630,405 |
|
|
$ |
2,655,815 |
|
|
$ |
2,406,533 |
|
|
|
Onboard and other
revenue |
|
412,921 |
|
|
|
412,921 |
|
|
|
336,851 |
|
|
|
1,118,798 |
|
|
|
1,118,798 |
|
|
|
901,992 |
|
|
|
Total
revenue |
|
1,484,736 |
|
|
|
1,493,705 |
|
|
|
1,284,910 |
|
|
|
3,749,203 |
|
|
|
3,774,613 |
|
|
|
3,308,525 |
|
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions,
transportation |
|
|
|
|
|
|
|
|
|
|
|
|
|
and other expense |
|
249,519 |
|
|
|
251,488 |
|
|
|
225,586 |
|
|
|
618,492 |
|
|
|
624,775 |
|
|
|
589,851 |
|
|
|
Onboard and other
expense |
|
90,661 |
|
|
|
90,661 |
|
|
|
84,171 |
|
|
|
230,416 |
|
|
|
230,416 |
|
|
|
210,701 |
|
|
|
Net
Revenue |
|
1,144,556 |
|
|
|
1,151,556 |
|
|
|
975,153 |
|
|
|
2,900,295 |
|
|
|
2,919,422 |
|
|
|
2,507,973 |
|
|
|
Non-GAAP
Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
revenue (1) |
|
300 |
|
|
|
300 |
|
|
|
3,026 |
|
|
|
1,057 |
|
|
|
1,057 |
|
|
|
31,514 |
|
|
|
Adjusted
Net Revenue |
$ |
1,144,856 |
|
|
$ |
1,151,856 |
|
|
$ |
978,179 |
|
|
$ |
2,901,352 |
|
|
$ |
2,920,479 |
|
|
$ |
2,539,487 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capacity Days |
|
4,209,562 |
|
|
|
4,209,562 |
|
|
|
3,696,549 |
|
|
|
12,175,012 |
|
|
|
12,175,012 |
|
|
|
10,887,160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Yield |
$ |
352.71 |
|
|
$ |
354.84 |
|
|
$ |
347.60 |
|
|
$ |
307.94 |
|
|
$ |
310.03 |
|
|
$ |
303.89 |
|
|
|
Net Yield |
$ |
271.89 |
|
|
$ |
273.56 |
|
|
$ |
263.80 |
|
|
$ |
238.22 |
|
|
$ |
239.79 |
|
|
$ |
230.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Yield |
$ |
271.97 |
|
|
$ |
273.63 |
|
|
$ |
264.62 |
|
|
$ |
238.30 |
|
|
$ |
239.87 |
|
|
$ |
233.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Reflects deferred revenue fair value adjustments related to the
Acquisition of Prestige that were made pursuant to business
combination accounting rules. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
Nine Months Ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
|
|
|
2016 |
|
|
|
|
|
|
|
2016 |
|
|
|
|
|
|
|
|
Constant |
|
|
|
|
|
Constant |
|
|
|
|
|
|
2016 |
|
|
Currency |
|
|
2015 |
|
|
|
2016 |
|
|
Currency |
|
|
2015 |
|
|
|
Total cruise operating
expense |
$ |
784,734 |
|
|
$ |
786,209 |
|
|
$ |
717,722 |
|
|
$ |
2,155,115 |
|
|
$ |
2,162,546 |
|
|
$ |
1,997,701 |
|
|
|
Marketing, general
and |
|
|
|
|
|
|
|
|
|
|
|
|
|
administrative expense |
|
174,813 |
|
|
|
175,353 |
|
|
|
150,558 |
|
|
|
504,694 |
|
|
|
505,957 |
|
|
|
411,879 |
|
|
|
Gross
Cruise Cost |
|
959,547 |
|
|
|
961,562 |
|
|
|
868,280 |
|
|
|
2,659,809 |
|
|
|
2,668,503 |
|
|
|
2,409,580 |
|
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions,
transportation |
|
|
|
|
|
|
|
|
|
|
|
|
|
and other expense |
|
249,519 |
|
|
|
251,488 |
|
|
|
225,586 |
|
|
|
618,492 |
|
|
|
624,775 |
|
|
|
589,851 |
|
|
|
Onboard and other
expense |
|
90,661 |
|
|
|
90,661 |
|
|
|
84,171 |
|
|
|
230,416 |
|
|
|
230,416 |
|
|
|
210,701 |
|
|
|
Net
Cruise Cost |
|
619,367 |
|
|
|
619,413 |
|
|
|
558,523 |
|
|
|
1,810,901 |
|
|
|
1,813,312 |
|
|
|
1,609,028 |
|
|
|
Less: Fuel expense |
|
86,250 |
|
|
|
86,250 |
|
|
|
88,829 |
|
|
|
248,529 |
|
|
|
248,529 |
|
|
|
267,784 |
|
|
|
Net
Cruise Cost Excluding Fuel |
|
533,117 |
|
|
|
533,163 |
|
|
|
469,694 |
|
|
|
1,562,372 |
|
|
|
1,564,783 |
|
|
|
1,341,244 |
|
|
|
Less Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash
deferred compensation (1) |
|
792 |
|
|
|
792 |
|
|
|
3,277 |
|
|
|
2,375 |
|
|
|
2,375 |
|
|
|
5,759 |
|
|
|
Non-cash
share-based compensation (2) |
|
16,840 |
|
|
|
16,840 |
|
|
|
13,691 |
|
|
|
48,289 |
|
|
|
48,289 |
|
|
|
27,857 |
|
|
|
Secondary
Equity Offering expenses (3) |
|
- |
|
|
|
- |
|
|
|
362 |
|
|
|
- |
|
|
|
- |
|
|
|
1,384 |
|
|
|
Severance
payments and other fees (4) |
|
2,587 |
|
|
|
2,587 |
|
|
|
1,369 |
|
|
|
5,486 |
|
|
|
5,486 |
|
|
|
15,045 |
|
|
|
Management NCL Corporation Units exchange expenses (5) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
624 |
|
|
|
Acquisition of Prestige expenses (6) |
|
1,696 |
|
|
|
1,696 |
|
|
|
6,098 |
|
|
|
4,710 |
|
|
|
4,710 |
|
|
|
17,389 |
|
|
|
Contingent consideration adjustment (7) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(43,400 |
) |
|
|
Contract
termination expenses (8) |
|
- |
|
|
|
- |
|
|
|
3,319 |
|
|
|
- |
|
|
|
- |
|
|
|
3,319 |
|
|
|
Adjusted Net Cruise
Cost Excluding Fuel |
$ |
511,202 |
|
|
$ |
511,248 |
|
|
$ |
441,578 |
|
|
$ |
1,501,512 |
|
|
$ |
1,503,923 |
|
|
$ |
1,313,267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capacity Days |
|
4,209,562 |
|
|
|
4,209,562 |
|
|
|
3,696,549 |
|
|
|
12,175,012 |
|
|
|
12,175,012 |
|
|
|
10,887,160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Cruise Cost per
Capacity Day |
$ |
227.94 |
|
|
$ |
228.42 |
|
|
$ |
234.89 |
|
|
$ |
218.46 |
|
|
$ |
219.18 |
|
|
$ |
221.32 |
|
|
|
Net Cruise Cost per
Capacity Day |
$ |
147.13 |
|
|
$ |
147.14 |
|
|
$ |
151.09 |
|
|
$ |
148.74 |
|
|
$ |
148.94 |
|
|
$ |
147.79 |
|
|
|
Net Cruise Cost
Excluding Fuel per Capacity Day |
$ |
126.64 |
|
|
$ |
126.66 |
|
|
$ |
127.06 |
|
|
$ |
128.33 |
|
|
$ |
128.52 |
|
|
$ |
123.20 |
|
|
|
Adjusted Net Cruise
Cost Excluding Fuel per Capacity Day |
$ |
121.44 |
|
|
$ |
121.45 |
|
|
$ |
119.46 |
|
|
$ |
123.33 |
|
|
$ |
123.53 |
|
|
$ |
120.63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 Secondary Equity Offerings, which are
included in marketing, general and administrative expense. |
|
|
(4)
Severance payments and other expenses related to restructuring
costs and other severance arrangements, which are included in
marketing, general and administrative expense. |
|
|
(5)
Expenses related to the exchange of Management NCL Corporation
Units for ordinary shares, which are included in marketing, general
and administrative expense. |
|
|
(6)
Expenses related to the Acquisition of Prestige, which are included
in marketing, general and administrative expense. |
|
|
(7)
Contingent consideration fair value adjustment related to the
Acquisition of Prestige, which is included in marketing, general
and administrative expense. |
|
|
(8)
Contract termination expenses related to the Acquisition of
Prestige, which are included in other cruise operating
expense. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NORWEGIAN CRUISE LINE HOLDINGS
LTD. |
|
|
|
NON-GAAP RECONCILING INFORMATION |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Net Income and Adjusted EPS were calculated as follows (in
thousands, except share and per share data): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
342,378 |
|
|
$ |
251,787 |
|
|
$ |
560,853 |
|
|
$ |
388,825 |
|
|
|
|
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Non-cash
deferred compensation (1) |
|
792 |
|
|
|
3,277 |
|
|
|
2,375 |
|
|
|
5,759 |
|
|
|
|
Non-cash
share-based compensation (2) |
|
16,840 |
|
|
|
13,691 |
|
|
|
48,289 |
|
|
|
28,030 |
|
|
|
|
Secondary
Equity Offering Expenses (3) |
|
- |
|
|
|
362 |
|
|
|
- |
|
|
|
1,384 |
|
|
|
|
Severance
payments and other fees (4) |
|
2,587 |
|
|
|
1,369 |
|
|
|
5,486 |
|
|
|
15,045 |
|
|
|
|
Management NCL Corporation Units exchange expenses (5) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
624 |
|
|
|
|
Acquisition of Prestige expenses (6) |
|
1,696 |
|
|
|
6,098 |
|
|
|
4,710 |
|
|
|
17,389 |
|
|
|
|
Deferred
revenue (7) |
|
300 |
|
|
|
3,026 |
|
|
|
1,057 |
|
|
|
31,514 |
|
|
|
|
Amortization of intangible assets (8) |
|
5,267 |
|
|
|
20,914 |
|
|
|
15,802 |
|
|
|
59,973 |
|
|
|
|
Contingent consideration adjustment (9) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(43,400 |
) |
|
|
|
Derivative adjustment (10) |
|
- |
|
|
|
3,767 |
|
|
|
(1,185 |
) |
|
|
33,370 |
|
|
|
|
Contract
termination expenses (11) |
|
- |
|
|
|
6,848 |
|
|
|
- |
|
|
|
6,848 |
|
|
|
|
Deferred
financing fees and other (12) |
|
(558 |
) |
|
|
- |
|
|
|
11,156 |
|
|
|
- |
|
|
|
|
Adjusted Net
Income |
$ |
369,302 |
|
|
$ |
311,139 |
|
|
$ |
648,543 |
|
|
$ |
545,361 |
|
|
|
|
Diluted
weighted-average shares outstanding |
|
227,598,607 |
|
|
|
230,274,756 |
|
|
|
227,859,617 |
|
|
|
229,860,900 |
|
|
|
|
Diluted earnings per
share |
$ |
1.50 |
|
|
$ |
1.09 |
|
|
$ |
2.46 |
|
|
$ |
1.69 |
|
|
|
|
Adjusted
EPS |
$ |
1.62 |
|
|
$ |
1.35 |
|
|
$ |
2.85 |
|
|
$ |
2.37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 Secondary Equity Offerings, which are
included in marketing, general and administrative expense. |
|
|
|
(4)
Severance payments and other expenses related to restructuring
costs and other severance arrangements, which are included in
marketing, general and administrative expense. |
|
|
|
(5)
Expenses related to the exchange of Management NCL Corporation
Units for ordinary shares, which are included in marketing, general
and administrative expense. |
|
|
|
(6)
Expenses related to the Acquisition of Prestige, which are included
in marketing, general and administrative expense. |
|
|
|
(7)
Deferred revenue fair value adjustments related to the Acquisition
of Prestige that were made pursuant to business combination
accounting rules, which are primarily included in Net Revenue. |
|
|
|
(8)
Amortization of intangible assets related to the Acquisition of
Prestige, which are included in depreciation and amortization
expense. |
|
|
|
(9)
Contingent consideration fair value adjustment related to the
Acquisition of Prestige, which is included in marketing, general
and administrative expense. |
|
|
|
(10)
Losses and net gains for the fair value adjustment of a foreign
exchange collar which did not receive hedge accounting and losses
due to the dedesignation of certain fuels swaps. These adjustments
are included in other expense. |
|
|
|
(11)
Contract termination expenses related to the Acquisition of
Prestige, which are included in other cruise operating expense and
depreciation and amortization expense. |
|
|
|
(12) For
the nine months ended September 30, 2016, primarily reflects the
write-off of deferred financing fees related to the refinancing of
certain credit facilities, which is included in interest expense,
net. For the three months ended September 30, 2016, reflects a tax
benefit adjustment. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NORWEGIAN CRUISE LINE HOLDINGS
LTD. |
|
|
|
NON-GAAP RECONCILING INFORMATION |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA and Adjusted
EBITDA were calculated as follows (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
342,378 |
|
|
$ |
251,787 |
|
|
$ |
560,853 |
|
|
$ |
388,825 |
|
|
|
|
Interest expense,
net |
|
60,662 |
|
|
|
49,784 |
|
|
|
188,836 |
|
|
|
153,219 |
|
|
|
|
Income tax expense |
|
5,241 |
|
|
|
3,528 |
|
|
|
8,944 |
|
|
|
6,931 |
|
|
|
|
Depreciation and
amortization expense |
|
111,575 |
|
|
|
109,798 |
|
|
|
317,480 |
|
|
|
314,381 |
|
|
|
|
EBITDA |
|
519,856 |
|
|
|
414,897 |
|
|
|
1,076,113 |
|
|
|
863,356 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense (1) |
|
5,333 |
|
|
|
1,733 |
|
|
|
13,281 |
|
|
|
35,589 |
|
|
|
|
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Non-cash
deferred compensation (2) |
|
792 |
|
|
|
3,277 |
|
|
|
2,375 |
|
|
|
5,759 |
|
|
|
|
Non-cash
share-based compensation (3) |
|
16,840 |
|
|
|
13,691 |
|
|
|
48,289 |
|
|
|
27,857 |
|
|
|
|
Secondary
Equity Offering expenses (4) |
|
- |
|
|
|
362 |
|
|
|
- |
|
|
|
1,384 |
|
|
|
|
Severance
payments and other fees (5) |
|
2,587 |
|
|
|
1,369 |
|
|
|
5,486 |
|
|
|
15,045 |
|
|
|
|
Management NCL Corporation Units exchange expenses (6) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
624 |
|
|
|
|
Acquisition of Prestige expenses (7) |
|
1,696 |
|
|
|
6,098 |
|
|
|
4,710 |
|
|
|
17,389 |
|
|
|
|
Deferred
revenue (8) |
|
300 |
|
|
|
3,026 |
|
|
|
1,057 |
|
|
|
31,514 |
|
|
|
|
Contingent consideration adjustment (9) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(43,400 |
) |
|
|
|
Contract
termination expenses (10) |
|
- |
|
|
|
3,319 |
|
|
|
- |
|
|
|
3,319 |
|
|
|
|
Adjusted EBITDA |
$ |
547,404 |
|
|
$ |
447,772 |
|
|
$ |
1,151,311 |
|
|
$ |
958,436 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Primarily consists of gains and losses, net for derivative
contracts and forward currency exchanges. |
|
|
|
(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. |
|
|
|
(4)
Expenses related to the Secondary Equity Offerings, which are
included in marketing, general and administrative expense. |
|
|
|
(5)
Severance payments and other expenses related to restructuring
costs and other severance arrangements, which are included in
marketing, general and administrative expense. |
|
|
|
(6)
Expenses related to the exchange of Management NCL Corporation
Units for ordinary shares, which are included in marketing, general
and administrative expense. |
|
|
|
(7)
Expenses related to the Acquisition of Prestige, which are included
in marketing, general and administrative expense. |
|
|
|
(8)
Deferred revenue fair value adjustments related to the Acquisition
of Prestige that were made pursuant to business combination
accounting rules, which are primarily included in Net Revenue. |
|
|
|
(9)
Contingent consideration fair value adjustment related to the
Acquisition of Prestige, which is included in marketing general and
administrative expense. |
|
|
|
(10)
Contract termination expenses related to the Acquisition of
Prestige, which are included in other cruise operating
expense. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NORWEGIAN CRUISE LINE HOLDINGS
LTD. |
NON-GAAP RECONCILING INFORMATION |
(Unaudited) |
|
|
|
|
Free Cash Flow was
calculated as follows (in thousands): |
|
|
|
|
|
|
|
|
Nine Months Ended |
|
September 30, |
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
Net cash provided by
operating activities |
$ |
1,088,759 |
|
|
$ |
973,386 |
|
Less: Capital
expenditures for ship construction |
|
(590,781 |
) |
|
|
(181,999 |
) |
Less: Capital
expenditures for business enhancements and other |
|
(325,155 |
) |
|
|
(148,809 |
) |
Free Cash
Flow |
|
172,823 |
|
|
|
642,578 |
|
Proceeds from ship
construction financing facilities |
|
439,438 |
|
|
|
71,706 |
|
Adjusted
free cash flow |
$ |
612,261 |
|
|
$ |
714,284 |
|
|
|
|
|
Investor Relations Contact
Andrea DeMarco
(305) 468-2339
InvestorRelations@nclcorp.com
Media Contacts
Vanessa Picariello
(305) 436-4713
PublicRelations@ncl.com
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