What changed in this filing

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Item 1A. Risk Factors

2026-03-02 compared with 2025-02-27 · 113 added, 103 removed, 290 unchanged (43% of the section changed)

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Debt/Liquidity Related Risk Factors

If our results of operations and financial performance do not recover as planned, we may not be in compliance with maintenance covenants in certain of our debt facilities.

If our results of operations and financial performance do not perform as planned, we may not be in compliance with maintenance covenants in certain of our debt facilities.

Certain of our debt facilities include maintenance and financial covenants.

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Financial covenants include free liquidity of no less than $250,000,000 at all times, an EBITDA to consolidated debt service ratio of at least 1.25 to 1.00 at the end of each fiscal quarter unless free liquidity is greater than or equal to $300,000,000 at that time and a total net funded debt to total capitalization ratio.

If we expect to not be in compliance, we would expect to seek waivers from the lenders under these facilities or renegotiate these facilities prior to any covenant violation.

If we expect not to be in compliance, we would expect to seek waivers from the lenders under these facilities or renegotiate these facilities prior to any covenant violation.

Any covenant waiver or renegotiation of any of our debt facilities has led, and may in the future lead, to increased costs, increased interest rates, additional restrictive covenants and other available lender protections that would be applicable to us under these debt facilities, and such increased costs, restrictions and modifications may vary among debt facilities.

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There can be no assurance that we would be able to obtain waivers or renegotiate these facilities in a timely manner, on acceptable terms or at all.

If we were not able to obtain a covenant waiver under any one or more of these debt facilities or renegotiate such facilities, we would be in default of such agreements, which could result in cross defaults to our other debt agreements.

As a consequence, we would need to refinance or repay the applicable debt facility or facilities, and would be required to raise additional debt or equity capital, or divest assets, to refinance or repay such facility or facilities.

If we were to be unable to obtain a covenant waiver under any one or more of these debt facilities or renegotiate these facilities, there can be no assurance that we would be able to raise sufficient debt or equity capital, or divest assets, to refinance or repay such facility or facilities.

With respect to each of these debt facilities, if we were unable to or did not obtain a waiver, renegotiate or refinance or repay such debt facilities, it would lead to an event of default under such facilities, which could lead to an acceleration of the indebtedness under such debt facilities.

In turn, this would lead to an event of default and potential acceleration of amounts due under all of our outstanding debt and derivative contract payables.

If we were not able to obtain a covenant waiver under any one or more of these debt facilities or renegotiate or repay such facilities, we would be in default of such agreements, which could result in cross defaults to our other debt agreements and an acceleration of the indebtedness under such debt facilities.

As a consequence, we would need to refinance or repay the applicable debt facility or facilities and would be required to raise additional debt or equity capital, or divest assets, to refinance or repay such facility or facilities, and there can be no assurance that we would be successful in doing so.

In addition, in such events, our credit card processors could hold back payments to create a reserve.

We cannot provide assurances that we would have sufficient liquidity to repay, or the ability to refinance, our debt and derivative contract payables if such amounts were accelerated upon an event of default.

If we were unable to repay those amounts, the holders of our secured indebtedness could proceed against the collateral granted to them to secure that indebtedness, which includes a significant portion of our assets, including our ships.

Any such action would have an adverse impact on our business, financial condition and results of operations.

As a result, the failure to obtain the covenant waivers or renegotiate our facilities as described above would have a material adverse effect on us and our ability to service our debt obligations.

As a result, the failure to obtain the covenant waivers or renegotiate or repay our facilities as described above would have a material adverse effect on us and our ability to service our debt obligations.

We anticipate that we will need additional financing in the future, which may not be available on favorable terms, or at all, and our outstanding exchangeable notes and any future financing may be dilutive to existing shareholders.

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The ability to raise additional financing depends on numerous factors that are outside of our control, including general economic and market conditions, the health of financial institutions, our credit ratings and investors’ and lenders’ assessments of our prospects and the prospects of the cruise industry in general.

If we raise additional funds by issuing debt, we may be subject to limitations on our operations due to restrictive covenants, which may be more restrictive than the covenants in our existing debt agreements, and we may be required to further encumber our assets.

further encumber our assets.

We may not have sufficient available collateral to pledge to support additional financing.

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Such disruptions could cause counterparties under our credit facilities, derivatives, contingent obligations, insurance contracts and new ship progress payment guarantees to be unable to perform their obligations or to breach their obligations to us under our contracts with them, which could include failures of financial institutions to fund required borrowings under our loan agreements and to pay us amounts that may become due under our derivative contracts and other agreements.

Also, we may be limited in obtaining funds to pay amounts due to our counterparties

under our derivative contracts and to pay amounts that may become due under other agreements.

If we were to elect to replace any counterparty for their failure to perform their obligations under such instruments, we would likely incur significant costs to replace the counterparty.

Also, we may be limited in obtaining funds to pay amounts due to our counterparties under our derivative contracts and to pay amounts that may become due under other agreements.

If we were to elect to replace any counterparty for their failure to perform their obligations under such instruments, we would likely incur

significant costs to replace the counterparty.

Any failure to replace any counterparties under these circumstances may result in additional costs to us or an ineffective instrument.

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We evaluate trade names and goodwill for impairment on an annual basis, or more frequently when circumstances indicate that the carrying value of a reporting unit may not be recoverable.

Several factors including a challenging operating environment impacts affecting consumer demand or spending, the deterioration of general macroeconomic conditions, or other factors could result in a change to the future cash flows we expect to derive from our operations.

Several factors including a challenging operating environment impacting consumer demand or spending, the deterioration of general macroeconomic conditions, or other factors could result in a change to the future cash flows we expect to derive from our operations.

Reductions of the cash flows used in the impairment analyses may result in the recording of an impairment charge to a reporting unit’s trade name or goodwill.

For example, we recognized significant impairment losses during 2020 related to the COVID-19 pandemic.

For example, we recognized significant impairment losses during 2020 related to a pandemic.

We believe that we have made reasonable estimates and judgments.

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We believe that attractive port destinations are a major reason why guests choose to go on a particular cruise or on a cruise vacation.

The availability of ports is affected by a number of factors, including, but not limited to, health, safety, and environmental concerns, existing capacity constraints, security, adverse weather conditions and natural disasters such as hurricanes, floods, typhoons and earthquakes, financial limitations on port development, political instability, armed conflicts, exclusivity arrangements that ports may have with our competitors, governmental regulations, including sanctions, and fees, local community concerns about port development and tourism.

For example, currently and in the past, regulatory changes, disease outbreaks resulting in a global pandemic, armed conflicts and damages to ports from hurricanes have prohibited our cruise voyages from visiting certain regions.

The availability of ports is affected by a number of factors, including, but not limited to, health, safety, and environmental concerns, existing capacity constraints, security, adverse weather conditions and natural disasters, financial limitations on port development, political instability, armed conflicts, exclusivity arrangements that ports may have with our competitors, governmental regulations, including sanctions and fees, and local community concerns about port development and tourism.

For example, currently and in the past, regulatory changes, global pandemics, armed conflicts and damages to ports from hurricanes have prohibited our cruise voyages from visiting certain regions.

Certain ports have also significantly increased fees related to cruise visits, affecting the profitability of visiting those destinations.

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We rely on scheduled commercial airline services for passenger and crew connections.

Increases in the price of, or major changes, significant delays and disruptions, or reduction in, commercial airline services has, and could in the future, disrupt our operations.

A number of our passengers and crew depend on scheduled commercial airline services to transport them to ports of embarkation for our cruises.

Increases in the price of airfare due to increases in fuel prices, fuel surcharges, changes in commercial airline services as a result of health and safety events, strikes or other staffing shortages, weather or other events, or the lack of availability due to schedule changes or a high level of airline bookings has and could adversely affect our ability to transport guests and crew to or from our ships and thereby increase our cruise operating expenses which, in turn, has an adverse effect on our financial condition and results of operations.

For example, many commercial airlines reduced services, experienced staffing shortages and suffered other disruptions due to the COVID-19 pandemic and other macroeconomic conditions.

COVID-19-related regulations also prevented us from using commercial airline services to transport our crew members to and from our ships, which resulted in increased costs to our Company.

Global events and conditions, including terrorist acts, armed conflicts, acts of piracy, and other international events impacting the security of travel or the global economy, or threats thereof, could adversely affect our business.

Global events and conditions, including the threat or possibility of future terrorist acts, outbreaks of hostilities or armed conflict, political unrest and instability, the issuance of government travel advisories or elevated threat warnings, increases in the activity of pirates, and other geo-political uncertainties, or the possibility or fear of such events, have had in the past and may again in the future have an adverse impact on our business.

Any of these events or conditions may adversely affect demand for, and by extension pricing of, our cruises.

Increases in the price of, or major changes, significant delays and disruptions, or reductions in, commercial airline services has, and could in the future, disrupt our operations.

Many of our passengers and crew depend on scheduled commercial airline services to transport them to ports of embarkation for our cruises.

Increases in the price of airfare due to increases in fuel prices, fuel surcharges, changes in commercial airline services as a result of health and safety events, strikes, airspace congestion or air traffic control and other airline- or airport-related staffing shortages, weather or other events, or the lack of availability due to schedule changes or increased airline bookings, have and could adversely affect our ability to transport guests and crew and thereby increase our cruise operating expenses which, in turn, have had and could have an adverse effect on our financial condition and results of operations.

For example, many commercial airlines reduced services, experienced staffing shortages and suffered other disruptions due to a pandemic and other macroeconomic conditions.

Pandemic-related regulations also prevented us from using commercial airline services to transport our crew members to and from our ships, which resulted in increased costs to our Company.

Global events and conditions, including terrorist acts, geopolitical conflict, armed conflicts, acts of piracy, and other international events impacting the security of travel or the global economy, or threats thereof, could adversely affect our business.

Global events and conditions, including the threat or possibility of future terrorist acts, geopolitical conflict, outbreaks of hostilities or armed conflict, political unrest and instability, government shutdowns, the issuance of government travel advisories or elevated threat warnings, increases in the activity of pirates, and other geo-political uncertainties, or the possibility or fear of such events, have had in the past and may again in the future have an adverse impact on our business.

Any of these events or conditions may adversely affect demand for, and pricing of, our cruises.

Such events or conditions may also have downstream effects on the global economic environment, including increased fuel and commodity pricing, supply chain shortages, labor shortages, volatility in the global capital markets, contraction of the global economy leading to decreased consumer discretionary spending, and other effects impossible to predict at this time.

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Our business, financial condition and results of operations may be materially and adversely affected by any negative impact on the global economy, capital markets or commodity fuel prices resulting from armed conflicts and other geopolitical tensions.

Additionally, we have been, and may continue to be, impacted by heightened regulations around customs and border control, travel bans to and from certain geographical areas, voluntary changes to our itineraries in light of geopolitical events, government policies increasing the difficulty of travel and limitations on issuing international travel visas.

Public health crises have had, and may in the future have, a significant impact on our financial condition, results, operations, outlook, plans, goals, growth, reputation, cash flows, liquidity, demand for voyages and share price.

Public health crises have, in the past, and could in the future, have significant negative impacts on all aspects of our business.

Public health crises have in the past, and could have in the future, significant negative impacts on all aspects of our business.

We have been, and may in the future be, subject to heightened governmental regulations, travel advisories, travel bans and restrictions that have and could significantly impact our global guest sourcing and our access to various ports of call around the globe.

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For example, in March 2020, we implemented a voluntary suspension of all cruise voyages across our three brands due to the COVID-19 pandemic.

We began resuming cruise voyages in July 2021 in a phased manner and completed the phased relaunch of our entire fleet in early May 2022.

This caused significant costs and lost revenue as a result of, among other things, the suspension of cruise voyages, implementation of additional health and safety measures, reduced demand for cruise vacations, guest compensation, itinerary modifications, redeployments and cancellations, travel restrictions and advisories, the unavailability of ports and/or destinations and protected commissions.

This caused significant costs and lost revenue as a result of, among other things, the suspension of cruise voyages, implementation of additional health and safety measures, increased concern related to illness when traveling to, from, and on our ships, reduced demand for cruise vacations, guest compensation, itinerary modifications, redeployments and cancellations, travel restrictions and advisories, the unavailability of ports and/or destinations and protected commissions.

We were also negatively impacted by adverse impacts to our travel agencies and suppliers due to COVID-19, and we may experience similar impacts in the event of a future pandemic or other public health crises.

Adverse incidents involving cruise ships may adversely affect our business, financial condition and results of operations.

The operation of cruise ships carries an inherent risk of loss caused by adverse weather conditions and maritime disasters, including, but not limited to, oil spills and other environmental mishaps, extreme weather conditions such as hurricanes, floods and typhoons, fire, mechanical failure, collisions, human error, war, terrorism, piracy, political action, civil unrest and insurrection in various countries and other circumstances or events.

mechanical failures, collisions, human error, war, terrorism, piracy, political action, civil unrest and insurrections in various countries and other circumstances or events.

Any such event may result in loss of life or property, loss of revenue or increased costs and the frequency and severity of natural disasters may increase due to climate change.

The operation of cruise ships also involves the risk of other incidents at sea or while in port, including

missing guests, inappropriate crew or passenger behavior and onboard crimes, which may bring into question passenger safety, may adversely affect future industry performance and may lead to litigation against us.

The operation of cruise ships also involves the risk of other incidents at sea, while in port or during shore excursions operated and/or offered by us and third parties, including missing guests, inappropriate crew or passenger behavior and onboard crimes, which may bring into question passenger safety, may adversely affect future industry performance and may lead to litigation against us.

We have experienced accidents and other incidents involving our cruise ships in the past and there can be no assurance that similar events will not occur in the future.

It is possible that we could be forced to cancel a cruise or a series of cruises due to these factors or incur increased port-related and other costs resulting from such adverse events.

It is possible that we could be forced to cancel cruises due to these factors or incur increased port-related and other costs resulting from such adverse events.

Any such event involving our cruise ships or other passenger cruise ships may adversely affect guests’ perceptions of safety or result in increased governmental or other regulatory oversight.

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The expanded use of social media has increased the speed that negative publicity spreads and makes it more difficult to mitigate reputational damage.

Anything that damages our reputation (whether or not justified), could have an adverse impact on demand, which could adversely affect our business, financial condition and results of operations.

Geopolitical conflicts, including ongoing conflicts, may affect itineraries, destination access, fuel availability and costs, and consumer demand, and may heighten cyber and operational risks.

Anything that damages our reputation (whether or not justified), could also have an adverse impact on demand, which could adversely affect our business, financial condition and results of operations.

If there is a significant accident, mechanical failure or similar problem involving a ship, we may have to place a ship in an extended Dry-dock period for repairs.

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Our name and brand image are integral to the growth of our business, as well as to the implementation of our strategies for expanding our business.

Our ability to execute our marketing and growth strategy depends on many factors, including the perceived quality of our services, the impact of our communication activities, including advertising, social media, and public relations, and our management of the customer experience, including direct interfaces through customer service.

Maintaining, promoting, and positioning our brand are important to expanding our customer base and will depend largely on the success of our marketing efforts and our ability to provide consistent, high-quality customer experiences.

We have used, and expect to continue to use, corporate partnerships, brand ambassadors, traditional, digital, and social media to promote our business.

Our ability to execute our marketing and growth strategy depends on many factors, including the perceived quality of our services, our communication activities, including advertising, social media, and public relations, and our management of the customer experience, including through customer service.

We have used, and expect to continue to use, corporate partnerships, brand ambassadors and traditional, digital and social media to promote our business.

Marketing campaigns can be expensive and may not result in the cost-effective acquisition of customers.

Ineffective marketing, ongoing and sustained promotional activities, negative publicity, unfair labor practices, and failure to protect the intellectual property rights in our brand are some of the potential threats to the strength of our brand, and those and other factors could rapidly and severely diminish customer confidence in us.

Ineffective marketing and promotional activities, negative publicity, unfair labor practices, and failure to protect the intellectual property rights in our brand are some of the potential threats to the strength of our brand, and those and other factors could rapidly and severely diminish customer confidence in us.

Furthermore, actions taken by individuals that we partner with, such as brand ambassadors, influencers or our associates, that fail to represent our brand in a manner consistent with our brand image, whether through our social media platforms or their own, could also harm our brand reputation and materially impact our business.

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A failure to keep pace with developments in technology could impair our operations or competitive position.

Our business continues to demand the use of sophisticated systems and technology.

Our business continues to demand the use of sophisticated systems and technology, including the adoption and use of artificial intelligence (“AI”).

These systems and technologies must be refined, updated and replaced with more advanced systems on a regular basis in order for us to meet our customers’ demands and expectations.

If we are unable to do so on a timely basis or within reasonable cost parameters, or if we are unable to appropriately and timely train our employees to operate any of these new systems, our business could suffer.

We also may not achieve the benefits that we anticipate from any new system or technology, such as fuel abatement technologies, and a failure to do so could result in higher than anticipated costs or could impair our operating results.

In the past, we have not always achieved the anticipated benefits from the implementation of new systems or technologies, and we may not achieve the benefits that we anticipate from any new system or technology, such as fuel abatement technologies or reservation systems, in the future and a failure to do so could result in higher than anticipated costs or could impair our operating results.

The adverse impact of general economic and related 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 can decrease the level of disposable income of consumers or consumer confidence.

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The demand for cruises is affected by international, national, local and other macroeconomic conditions.

Adverse changes in the perceived or actual economic climate in North America or globally, such as the volatility of fuel prices, higher interest rates, stock and real estate market declines and/or volatility, more restrictive credit markets, higher

unemployment or underemployment rates, inflation, higher taxes, changes in governmental policies and political developments impacting international trade, trade disputes, increased tariffs or customers’ willingness to travel with us, could reduce the level of discretionary income or consumer confidence in the countries from which we source our guests.

Consequently, this may negatively affect demand for cruise vacations in these countries, which are a discretionary purchase.

Adverse changes in the perceived or actual economic climate in North America or globally, such as the volatility of fuel prices, elevated interest rates, which have risen significantly in recent years and may remain at elevated levels or fluctuate, stock and real estate market declines and/or volatility, more restrictive credit markets, higher unemployment or underemployment rates, inflation, which has moderated from recent historical highs but may persist or re-accelerate, higher taxes, changes in governmental policies and political developments impacting international trade, trade disputes, increased tariffs or customers’ willingness to travel with us, could reduce the level of discretionary income or consumer confidence in the countries from which we source our guests.

Economic conditions remain uncertain, and the potential for an economic slowdown or recession could materially reduce consumer discretionary spending, including spending on cruise vacations.

Even absent a recession, sustained elevated interest rates and lingering effects of prior inflationary periods may continue to constrain consumer spending patterns.

Consequently, this may negatively affect demand for cruise vacations.

Decreases in demand for cruise vacations could result in price discounting or lower Occupancy Percentages, which, in turn, could reduce the profitability of our business.

In addition, these conditions could also impact our suppliers, which could result in disruptions in our suppliers’ services and financial losses for us.

Our revenues are also sensitive to the activities of other cruise lines in many areas including pricing, itineraries, capacity and promotions, which can have a material adverse impact not only on our revenues, but also on overall industry revenues.

Breaches in data security or other disturbances to our information systems and other networks or our actual or perceived failure to comply with requirements regarding data privacy and protection could impair our operations, subject us to significant fines, penalties and damages, and have a material adverse impact on our business, financial condition and results of operations.

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We carry limited business interruption insurance for certain shoreside operations, subject to limitations, exclusions and deductibles.

As part of our ordinary business operations, we and certain of our third-party service providers collect, process, transmit and store a large volume of personally identifiable information.

As part of our ordinary business operations, we and certain of our third-party service providers collect, process, transmit and store a large volume of personally identifiable information, including sensitive information.

The security of the systems and networks where we and our service providers store this data is a critical element of our business.

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Cybersecurity threats can include computer viruses, malware, worms, hackers and other malicious software programs or other attacks, including physical and electronic break-ins, router disruption, sabotage or espionage, disruptions from unauthorized access and tampering (including through social engineering such as phishing attacks), impersonation of authorized users and coordinated denial-of-service attacks.

Threat actors are increasingly leveraging AI to enhance the sophistication, speed, and effectiveness of cyberattacks.

The proliferation of AI tools may lower barriers for threat actors and increase the frequency and severity of attacks we face, and our security measures may not keep pace with these evolving capabilities.

There can be no assurance that a breach or incident will not have a material impact on our operations and financial results in the future.

In addition, we may not be in a position to promptly address security breaches, unauthorized access or other cybersecurity incidents or to implement adequate preventative measures if we are unable to immediately detect such incidents.

In addition, we may not be in a position to promptly address security breaches, unauthorized access or other cybersecurity incidents or to implement adequate preventative measures if we are unable to

immediately detect such incidents.

Our failure to successfully prevent, mitigate or timely respond to such incidents could impair our ability to conduct business and damage our reputation.

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In the event of a data security breach of our systems and/or third-party systems or a cybersecurity incident, we may incur costs associated with the following:

credit card reissuance or replacement, data restoration, regulatory fines and penalties, vendor fines and penalties, legal fees, damages and settlements.

response, notification, forensics, regulatory investigations, public relations, consultants, credit identity monitoring, credit freezes, fraud alert, credit identity restoration, credit card cancellation, credit card reissuance or replacement, data restoration, regulatory fines and penalties, vendor fines and penalties, legal fees, damages and settlements.

In addition, a data security breach or cybersecurity incident may cause business interruption, information system disruption, disruptions as a result of regulatory investigation or litigation, digital asset loss related to corrupted or destroyed data, loss of company assets, damage to our reputation, damages to intangible property and other intangible damages, such as loss of consumer confidence, all of which could impair our operations and have an adverse impact on our financial results.

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Fuel expense is a significant cost for our Company.

We have implemented a strategy to contract with fuel providers at most ports, with a market-driven pricing structure to support our itineraries.

Increases in fuel costs are predicted for the upcoming years as new regulatory requirements become effective, causing demand for alternative fuels to grow at a faster pace than the supply infrastructure development.

We are actively exploring alternative fuel solutions as regulatory requirements develop to facilitate compliance while working on fuel cost increase protection tools for additional spend mitigation, but we may not be successful in these efforts.

We are also required to use alternate fuel sources as regulations aimed at reducing carbon intensity have been introduced and we may choose to use alternative fuels in order to achieve any emissions reduction targets we have and may in the future adopt.

For example, the IMO adopted two requirements that went into effect in 2023, the Carbon Intensity Indicator and Energy Efficiency Ship Index, which each regulate carbon emissions for ships.

has included the maritime shipping sector in the scope of its Emissions Trading System, which regulates GHG emissions through a “cap and trade” principle, since January 2024.

Increases in fuel costs are expected as regulatory requirements take effect and alternative fuel demand outpaces infrastructure deployment, and our strategies may not fully offset these pressures.

We are required to use alternate fuel sources as regulations aimed at reducing carbon intensity have been introduced, and we may choose to use alternative fuels in order to achieve any emissions reduction targets we have and may in the future adopt.

For example, the E.U.

included the maritime shipping sector in the scope of its Emissions Trading System, which regulates GHG emissions through a “cap and trade” principle, since January 2024.

In addition, as of January 1, 2025, the FuelEU Maritime regulation is designed to promote the use of renewable, low-carbon fuels and clean energy technologies for ships, and mandates ships calling at E.U.

ports gradually reduce the GHG intensity of their fuel usage.

Under the FuelEU Maritime regulation, ships that have a higher GHG intensity than the requirement must pay a penalty.

The penalty is progressively increased if the ship has a compliance deficit for two or more consecutive reporting periods.

We could also experience increases in other cruise operating costs due to market forces and economic or political instability resulting from increases or volatility in fuel expense.

Under the FuelEU Maritime regulation, ships that have a higher GHG intensity than the requirement must pay a penalty that is progressively increased if the ship has a compliance deficit for two or more consecutive reporting periods.

We could also experience increases in other cruise operating costs due to market forces, global inflationary pressures and economic or political instability resulting from increases or volatility in fuel expense.

Our hedging program may not be successful in mitigating higher fuel costs, and any price protection provided may be limited due to market conditions, including choice of hedging instruments, breakdown of correlation between hedging instrument and market price of fuel and failure of hedge counterparties.

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Delays or mechanical faults may result in cancellation of cruises and/or necessitate unscheduled Dry-docks and repairs of ships.

In addition, availability, work stoppages, insolvency or financial problems in the shipyards’ construction, refurbishment or repair of our ships, other “force majeure” events that are beyond our control and the control of shipyards or subcontractors, or changes to technical specifications due to regulatory changes, sustainability initiatives or other

strategic initiatives could also delay or prevent the newbuild delivery, refurbishment and repair and maintenance of our ships.

Any termination or breach of contract following such an event may result in, among other things, the forfeiture of prior deposits or payments made by us, potential claims and impairment of losses.

A significant delay in the delivery of a new ship, or a significant performance deficiency or mechanical failure of a new ship could also have an adverse effect on our business.

The impacts of global events including armed or geopolitical conflicts and pandemics, a lack of viable Dry-dock facilities, modifications the Company plans to make to its newbuilds, including initiatives to improve environmental sustainability, and other macroeconomic events have resulted in some delays in expected ship deliveries, and may result in additional delays in ship deliveries in the future, which may be prolonged.

The impacts of global events including armed or geopolitical conflicts and pandemics, a lack of viable Dry-dock facilities, modifications to our newbuilds, including potential initiatives to improve environmental sustainability, and other macroeconomic events have resulted in some delays in expected ship deliveries, and may result in additional delays in ship deliveries in the future, which may be prolonged.

The consolidation of the control of certain European cruise shipyards could result in higher prices for the construction of new ships and refurbishments and could limit the availability of qualified shipyards to construct new ships.

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Our failure or inability to recruit or retain qualified personnel or the loss of key personnel or employee relations issues may materially adversely affect our business, financial condition and results of operations.

We must continue to recruit, retain and motivate management and other employees in order to maintain our current business and support our projected growth.

We must continue to recruit, retain and motivate management and other employees to maintain our current business and support our projected growth.

We need to hire and train a considerable number of qualified crew members to staff the ships that will be joining our fleet in the coming years.

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Negative perceptions about the cruise industry, carbon intensity, sustainability or otherwise may make it increasingly difficult to retain and hire additional crew members to staff our fleet and to recruit new employees generally.

Shareholder activism could adversely affect our business, financial condition, results of operations and share price.

Actions by activist shareholders that target our company and our business may not align with our business strategies or the best interests of all of our shareholders.

Responding to activist shareholders can be costly and time-consuming, diverting the attention of our Board of Directors and management from the pursuit of our business strategies.

We have incurred, and may in the future incur, significant expenses related to such matters, including legal, financial, advisory and proxy solicitation costs.

Shareholder activism could also give rise to perceived uncertainties as to our future direction, make it more difficult to attract and retain qualified personnel, and cause our share price to fluctuate based on speculative market perceptions that do not reflect our underlying business fundamentals, which could adversely affect our business, financial condition, results of operations and share price.

Impacts related to climate change may adversely affect our business, financial condition and results of operations.

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For example, certain ports have become temporarily unavailable to us due to hurricane damage and other destinations have either considered or implemented restrictions on cruise operations due to environmental concerns.

We expect to make significant investments in technology, equipment and alternative fuels in order to achieve any climate-related targets we may set and to comply with climate-related regulations, and our profitability and operations may be adversely impacted by such investments.

We expect to make significant investments in technology, equipment and alternative fuels in order to comply with climate-related regulations and achieve any climate-related targets we may set, and our profitability and operations may be adversely impacted by such investments.

These investments may have costs beyond our expectations and may not ultimately benefit us as expected.

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Our ability to achieve our sustainability commitments and goals will depend on a number of variable factors, some of which are outside of our control.

We may fall short of any sustainability goals we set, including those disclosed in this report, which may result in negative impacts to our reputation, financial condition and results of operations.

We may fall short of any sustainability goals we set, including those disclosed publicly, which may result in negative impacts to our reputation, financial condition and results of operations.

Conversely, backlash against our sustainability initiatives and commitments may harm our reputation among other stakeholders and expose us to related liabilities.

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Such events could lead to an adverse impact on our financial condition or results of operations.

As a result of any ship-related or other incidents, litigation claims, enforcement actions and regulatory actions and investigations, including, but not limited to, those arising from personal injury, loss of life, loss of or damage to personal property, business interruption losses or environmental damage to any affected coastal waters and the surrounding area, may be asserted or brought against various parties, including us and/or our cruise brands.

The time and attention of our management may also be diverted in defending such claims, actions and investigations.

Subject to applicable insurance

coverage, we may also incur costs both in defending against any claims, actions and investigations and for any judgments, fines, civil or criminal penalties if such claims, actions or investigations are adversely determined.

Subject to applicable insurance coverage, we may also incur costs both in defending against any claims, actions and investigations and for any judgments, fines, civil or criminal penalties if such claims, actions or investigations are adversely determined.

We rely on third parties to provide hotel management services for certain ships and certain other services, and we are exposed to risks facing such providers.

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We earn revenues, pay expenses, purchase and own assets and incur liabilities in currencies other than the U.S.

most significantly a portion of our revenue and expenses are denominated in foreign currencies, particularly British pound, Canadian dollar, euro and Australian dollar.

most significantly, a portion of our revenue and expenses are denominated in foreign currencies, particularly British pounds, Canadian dollars, euros and Australian dollars.

Because our consolidated financial statements are presented in U.S.

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dollar amount received upon conversion of these currencies into U.S.

We have historically and may in the future enter into ship construction contracts denominated in euros or other foreign currencies.

While we have entered into foreign currency derivatives to manage a portion of the currency risk associated with such contracts, we are exposed to fluctuations in the euro exchange rate for the portions of the ship construction contracts that have not been hedged.

We currently have certain ship construction contracts and newbuild-related debt denominated in euros.

We are exposed to fluctuations in the euro exchange rate for the portions of the ship construction contracts and euro-denominated debt

that have not been hedged with foreign currency derivatives.

A weakening of the U.S.

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Additionally, if a shipyard is unable to perform under the related ship construction contract, any associated foreign currency hedges that were entered into to manage the currency risk would need to be terminated.

Our expansion into new markets and investments in new markets and land-based destination projects may not be successful.

Our expansion into new markets and investments in new markets, businesses and land-based destination projects may not be successful.

We believe there remains significant opportunity to expand our passenger sourcing into major markets in the future, such as Europe and Australia, as well as into emerging markets and to expand our itineraries in new markets.

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There can be no assurance that these markets will develop as anticipated or that we will have success in these markets, and if we do not, we may be unable to recover our investment spent to expand our business into these markets and may forgo opportunities in more lucrative markets, which could adversely impact our business, financial condition and results of operations.

From time to time, we pursue acquisitions and may pursue acquisitions in the future, which are subject to, among other factors, our ability to identify attractive business opportunities and to negotiate favorable terms for such opportunities.

Accordingly, we cannot make any assurances that potential acquisitions will be completed timely or at all, or that if completed, we would realize the anticipated benefits of such acquisitions.

We have also made, and plan to continue to make, investments in land-based projects including port facilities and destination projects that are susceptible to impacts from, among other things, weather events, regulatory restrictions, labor risks, shortages of goods and materials and resistance from local populations.

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These increases in capacity in the cruise industry globally and potential overcapacity in certain key markets may cause us to lower pricing, which would reduce profitability and adversely affect our results of operations.

Additionally, older ships in our fleet may not be as competitive as new ships enter the market and we may not be able to sell such older ships at optimal prices.

Our use of artificial intelligence (“AI”) technologies may present business, compliance, and reputational risks.

Additionally, older ships in our fleet may not be as competitive as new ships enter the market, and we may not be able to effectively sell or charter such older ships at optimal prices.

Our use of AI technologies may present business, compliance, and reputational risks.

We use AI technologies in some of our business processes, including some consumer-facing features.

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We may also fail to adopt AI technologies at an appropriate pace, which could put us at a competitive disadvantage.

We operate in a highly competitive vacation market, which could adversely affect our results.

We compete in a broad and highly competitive vacation market in which cruising is one of many leisure options available to consumers.

We face competition not only from other cruise lines, but also from a wide range of alternative vacation offerings, including hotels, resorts, short-term lodging providers, theme parks and packaged travel experiences.

Competition within the cruise industry is driven by factors such as pricing, itinerary and destination offerings, ship features, service levels, marketing and travel advisor relationships.

Competitive actions, including changes in pricing, capacity, deployment and promotional activity, may adversely affect our revenues, margins and operating results.

Risks Related to the Regulatory Environment in Which We Operate

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and various state and foreign government and regulatory agencies have enacted or are considering new environmental regulations and policies aimed at restricting or taxing emissions, including those of greenhouse gases, requiring the use of low-sulfur fuels, requiring the use of shore power while in port, increasing fuel efficiency requirements, reducing the threat of invasive species in ballast water, and improving sewage and greywater-handling capabilities.

For example, in 2021, the IMO adopted two requirements that went into effect in 2023, the Carbon Intensity Indicator (the “CII”) and Energy Efficiency Ship Index (the “EEXI”), which each regulate carbon emissions for ships.

The CII is an operational metric designed to measure how efficiently a ship transports goods or passengers by looking at carbon dioxide emissions per nautical mile.

Ships are given an annual rating from A to E with a C or better required for compliance.

For ships that receive a D rating for three consecutive years, or an E rating for one year, a corrective action plan will need to be developed and approved.

Beginning in 2023, ships are now required to reduce carbon intensity by 5% from a 2019 baseline, with 2% incremental improvements each year thereafter until 2030.

The EEXI is a design re-certification requirement that updates energy efficiency requirements for existing ships and regulates carbon dioxide emissions related to installed engine power, transport capacity and ship speed.

The maritime shipping sector has been included in the E.U.’s Emissions Trading System since the beginning of 2024.

For example, the maritime shipping sector has been included in the E.U.’s Emissions Trading System since the beginning of 2024.

Under the directive ships over 5,000 Gross Tons that transport passengers or cargo to or from E.U.

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The requirements are being phased in from 2024 to 2026.

Beginning in 2024, covered entities are required to procure and surrender allowances equivalent to 40% of their carbon emissions, with the amount increasing to 70% of carbon emissions in 2025 and 100% of GHG emissions in 2026.

Compliance with such laws and regulations have resulted in increased costs to our Company and are expected to entail significant expenses for a combination of:

Beginning in 2024, covered entities were required to procure and surrender allowances equivalent to 40% of their carbon emissions, with the amount increasing to 70% of carbon emissions in 2025 and 100% of GHG emissions in 2026.

The IMO has also implemented and considered additional requirements for the shipping industry that promote the reduction of GHG emissions.

Compliance with such laws and regulations has resulted in increased costs to our Company and is expected to entail significant expenses for a combination of:

ship modifications, purchases of emissions allowances, alternative fuels and higher-cost compliant newbuilds.

Compliance is also expected to result in changes to our operating procedures, including limitations on our ability to operate in certain locations and slowing the speed of our ships and may render some ships obsolete, which would adversely impact our operations.

These issues are, and we believe will continue to be,

areas of focus by the relevant authorities throughout the world.

These issues are, and we believe will continue to be, areas of focus by the relevant authorities throughout the world.

This could result in the enactment of more stringent regulation of cruise ships that would subject us to increasing compliance costs in the future.

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Some environmental groups continue to lobby for more extensive oversight of cruise ships and have generated negative publicity about the cruise industry and its environmental impact.

Additionally, in the past, states have implemented taxes that impact the cruise industry.

Additionally, currently and in the past, states have implemented taxes and fees that impact the cruise industry.

It is possible that other states, countries or ports of call that our ships regularly visit may also decide to assess new taxes or fees or change existing taxes or fees specifically applicable to the cruise industry and its employees and/or guests, which could increase our operating costs and/or could decrease the demand for cruises.

Changes in tax laws, or challenges to our tax positions, could adversely affect our results of operations and financial condition.

We believe and have taken the position that our income that is considered to be derived from the international operation of ships as well as certain income that is considered to be incidental to such income (“shipping income”) is exempt from U.S.

federal income taxes under Section 883, based upon certain assumptions as to shareholdings and other information as more fully described in “Item 1—Business—Taxation.” The provisions of Section 883 are subject to change at any time, possibly with retroactive effect.

We believe and have taken the position that substantially all of our income derived from the international operation of ships is properly categorized as shipping income and that we do not have a material amount of non-qualifying income.

It is possible, however, that a much larger percentage of our income does not qualify (or will not qualify) as shipping income.

We believe and have taken the position that substantially all of our income that is considered to be derived from the international operation of ships, as well as certain income that is considered to be incidental to such income (“shipping income”), is exempt from U.S.

federal income taxes under Section 883, based upon certain assumptions as to shareholdings and other information as more fully described in “Item 1—Business—Taxation.”

The provisions of Section 883 are subject to change at any time, possibly with retroactive effect.

Moreover, the exemption for shipping income is only available for years in which NCLH will satisfy complex stock ownership tests or the publicly-traded test under Section 883 as described in “Item 1—Business—Taxation—Exemption of International Shipping Income under Section 883 of the Code.” There are factual circumstances beyond our control, including changes in the direct and indirect owners of NCLH’s ordinary shares, which could cause us or our subsidiaries to lose the benefit of this tax exemption.

Finally, any changes in our operations could significantly increase our exposure to either the Net Tax Regime or the 4% Regime (each as defined in “Item 1—Business—Taxation”), and we can give no assurances on this matter.

If we or any of our subsidiaries were not to qualify for the exemption under Section 883, our or such subsidiary’s U.S.-source income would be subject to either the Net Tax Regime or the 4% Regime (each as defined in “Item 1—Business—Taxation”).

As of the date of this filing, we believe that NCLH and its subsidiaries will satisfy the publicly-traded test imposed under Section 883 and therefore believe that NCLH will qualify for the exemption under Section 883.

However, as discussed above, there are factual circumstances beyond our control that could cause NCLH to not meet the stock ownership or publicly-traded tests.

Therefore, we can give no assurances on this matter.

We refer you to “Item 1—Business—Taxation.”

Accordingly, there can be no assurance that we will continue to be exempt from U.S.

income tax on U.S.

source shipping income in the future.

If we were not entitled to the benefit of Section 883, we and our subsidiaries would be subject to U.S.

taxation on a portion of the income derived from or incidental to the international operation of our ships, which would reduce our net income.

We may be subject to state, local and non-U.S.

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For example, the OECD and numerous jurisdictions have had an increased focus on issues concerning the taxation of multinational businesses and have adopted several related reforms, including the implementation of a global minimum tax rate of at least 15% for large multinational businesses that was effective January 1, 2024 or later, which could have a material adverse effect on our aggregate tax liability and effective tax rate.

During the fourth quarter of 2023, in response to the OECD’s BEPS 2.0 Pillar 2 global tax reform, the Company restructured its organizational structure by realigning many of its operations across its three different brands into a single jurisdiction, Bermuda.

In late 2023, in response to the OECD’s BEPS 2.0 Pillar 2 global tax reform, the Company restructured its organizational structure by realigning many of its operations across its three different brands into a single jurisdiction, Bermuda.

In connection with the reorganization, among other steps, certain NCLH subsidiaries were redomiciled to Bermuda.

If our assumptions and interpretations regarding the global minimum tax rules or our efforts to reorganize prove to be incorrect for any reason,

our business, financial condition and results of operations could be materially adversely affected.

We expect global tax reform will continue to evolve over the coming years and will continue to monitor these developments.

If our assumptions and interpretations regarding the global minimum tax rules or our efforts to reorganize prove to be incorrect for any reason, our business, financial condition and results of operations could be materially adversely affected.

We expect global tax reform will continue to evolve over the coming years and will continue to monitor these developments and plan accordingly.

The global minimum tax rules include three Pillar 2 taxing mechanisms to ensure large multinational businesses pay a minimum effective tax rate of 15% on their profits worldwide.

The primary taxing mechanism is the Qualified Domestic Minimum Top-up Tax (“QDMTT”).

No other taxing mechanisms apply to constituent entities (i.e., NCLH’s group companies) that are tax residents in a jurisdiction that has enacted a QDMTT.

Since Bermuda has not implemented a QDMTT, the other two taxing mechanisms could apply such as the Income Inclusion Rule (“IIR”) or the Undertaxed Profits Rule (“UTPR”).

Even though NCLH and its subsidiaries became subject to the UTPR effective January 1, 2025, the Company does not expect to have a material impact from the UTPR mechanism.

The primary reason for this result is that a large portion of the Company’s shipping income is exempt under the Pillar 2 shipping income exemption rule discussed below.

Additionally, previously we obtained an assurance from the Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act 1966 that, in the event that any legislation is enacted in Bermuda imposing any tax, including tax on profits or income among others, such tax shall not be applicable to them until March 31, 2035.

Such assurances were superseded by the passage of new legislation as described below.

On December 27, 2023, the Bermuda Act was enacted in Bermuda.

On December 27, 2023, the Bermuda Corporate Income Tax Act 2023 (“Bermuda Act”) was enacted in Bermuda.

Under the Bermuda Act, the corporate income tax will be determined based on a statutory tax rate of 15% effective for fiscal years beginning on or after January 1, 2025.

The corporate income tax will apply only to Bermuda tax resident businesses that are part of multinational enterprise groups with €750 million or more in annual revenues in at least two of the four fiscal years immediately preceding the year in question.

Although the Government of Bermuda has released limited guidance with respect to specific provisions of the Bermuda Act, it is anticipated that further administrative guidance as well as regulatory guidance will be released over the course of the 2025 calendar year and beyond.

The corporate income tax will apply only to Bermuda tax resident businesses that are part of multinational enterprise groups with €750 million or more in annual revenues, pursuant to the consolidated financial statements of the ultimate parent entity, in at least two of the four fiscal years immediately preceding the year in question.

As enacted, the Bermuda Act makes it clear that any corporate income tax liability is due regardless of the above assurances under the Exempted Undertakings Protection Act 1966.

Therefore, we expect to be subject to the Bermuda corporate income tax with effect from January 1, 2025.

The Bermuda Act provides for an international shipping income exclusion.

Therefore, we are subject to the Bermuda corporate income tax as of January 1, 2025.

Similar to Pillar 2, and as described above, the Bermuda Act provides for an

international shipping income exclusion.

In order for a Bermuda entity’s international shipping income to qualify for the exclusion, the entity must demonstrate that the strategic or commercial management of all ships concerned is effectively carried on from or within Bermuda.

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We have in the past and may in the future be subject to increased costs and our management team may be required to devote significant time to satisfying economic substance requirements in certain of these jurisdictions.

If such entities cannot demonstrate compliance with these requirements, we may be liable to pay penalties and fines in the

applicable jurisdictions and/or may take the decision to re-domicile such entities to different jurisdictions that may have tax regimes and other regulatory regimes which may be less favorable.

If such entities cannot demonstrate compliance with these requirements, we may be liable to pay penalties and fines in the applicable jurisdictions and/or may take the decision to re-domicile such entities to different jurisdictions that may have tax regimes and other regulatory regimes which may be less favorable.

We continued to take what we believe were the necessary steps to meet Bermuda’s economic substance requirements during 2025.

Risks Related to NCLH’s Ordinary Shares

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We are not legally or contractually required to pay dividends.

In addition, NCLH is a holding company and would depend upon its subsidiaries for their ability to pay distributions to NCLH to finance any dividend or pay any other obligations of NCLH.

In addition, NCLH is a holding company and would depend upon its subsidiaries for their abilities to pay distributions to NCLH to finance any dividend or pay any other obligations of NCLH.

Investors seeking dividends should not purchase NCLH’s ordinary shares.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors