What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-02 compared with 2025-02-27 · 142 added, 135 removed, 302 unchanged (48% of the section changed)

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Passenger ticket revenue primarily consists of revenue for accommodations, meals in certain restaurants on the ship, certain onboard entertainment, government taxes, fees and port expenses and includes revenue for service charges and air and land transportation to and from the ship to the extent guests purchase these items from us.

Onboard and other revenue primarily consists of revenue from casino, beverage sales, shore excursions, specialty dining, retail sales, spa services and Wi-Fi services.

Onboard and other revenue primarily consists of revenue from casinos, beverage sales, shore excursions, specialty dining, retail sales, spa services and Wi-Fi services.

Our onboard revenue is derived from onboard activities we perform directly or that are performed by independent concessionaires, from which we receive a share of their revenue.

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These costs include travel advisor commissions, air and land transportation expenses, related credit card fees, certain government taxes, fees and port expenses and the costs associated with shore excursions and hotel accommodations included as part of the overall cruise purchase price.

● Onboard and other primarily consists of direct costs incurred in connection with onboard and other revenue, including casino, beverage sales and shore excursions.

● Onboard and other primarily consists of direct costs incurred in connection with onboard and other revenue, including casinos, beverage sales and shore excursions.

● Payroll and related consists of the cost of wages, benefits and logistics for shipboard employees and costs of certain inventory items, including food, for a third party that provides crew and other hotel services for certain ships.

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Assets are grouped and evaluated at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets.

For ship impairment analyses, the lowest level for which identifiable cash flows are largely independent of other assets and liabilities is each individual ship.

For ship impairment analyses, the lowest level for which identifiable cash flows are largely independent of other assets and liabilities is generally each individual ship.

We consider historical performance and future estimated results in our evaluation of potential impairment and then compare the carrying amount of the asset to the estimated undiscounted future cash flows expected to result from the use of the asset.

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We also utilize Net Cruise Cost and Adjusted Net Cruise Cost Excluding Fuel to manage our business on a day-to-day basis.

In measuring our ability to control costs in a manner that

positively impacts our net income, we believe changes in Adjusted Gross Margin, Net Yield, Net Cruise Cost and Adjusted Net Cruise Cost Excluding Fuel to be the most relevant indicators of our performance.

In measuring our ability to control costs in a manner that positively impacts our net income, we believe changes in Adjusted Gross Margin, Net Yield, Net Cruise Cost and Adjusted Net Cruise Cost Excluding Fuel to be the most relevant indicators of our performance.

We believe that Adjusted EBITDA is appropriate as a supplemental financial measure as it is used by management to assess operating performance.

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accordingly, our presentation of Adjusted Net Income and Adjusted EPS may not be indicative of future adjustments or results.

For example, for the year ended December 31, 2024, we had a benefit of $161.9 million related to the reversal of the majority of our U.S.

deferred tax asset valuation allowance.

We included this as an adjustment in the reconciliation of Adjusted Net Income since the benefit is not representative of our day-to-day operations, and this adjustment did not occur and is not included in the comparative period presented within this Annual Report.

For example, for the year ended December 31, 2025, we had a loss of $95.1 million related to the write-off of certain information technology assets.

We included this as an adjustment in the reconciliation of Adjusted Net Income since the loss is not representative of our day-to-day operations, and this adjustment did not occur and is not included in the comparative period presented within this Annual Report.

In 2025, drew down on euro-denominated debt for two newbuilds that is primarily unhedged, and we expect to take delivery of ships that have euro-denominated debt in the future.

Due to the significant increase in our euro-denominated debt in 2025 and the fact that a substantial portion of our debt is in dollars, we have included the related net foreign currency remeasurement losses as a supplemental adjustment in our calculation of Adjusted Net Income and Adjusted EPS.

To ensure comparability, we have retrospectively applied this adjustment to the corresponding periods in 2024, using a consistent methodology.

The quantitative impact of these adjustments is presented in the accompanying reconciliation tables within this Annual Report.

Non-GAAP diluted weighted-average shares are calculated using the treasury stock method to calculate the effect of restricted share units and options and the if-converted method to calculate the effect of convertible instruments.

This is the same methodology that is used when calculating GAAP diluted weighted-average shares.

However, the determination of whether the shares are dilutive or anti-dilutive is made independently on a GAAP and non-GAAP net income basis, and therefore, the number of diluted weighted-average shares outstanding for GAAP and non-GAAP may be different.

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.

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Please see a historical reconciliation of these measures to the most comparable GAAP measure presented in our consolidated financial statements below in the “Results of Operations” section.

Financing Transactions and Newbuild Orders

In February 2024, NCLC and the Commitment Parties entered into the third amended commitment letter, which became effective in March 2024.

Pursuant to the third amended commitment letter, the Commitment Parties have agreed to purchase from NCLC an aggregate principal amount of $650 million of senior unsecured notes due five years after the issue date at NCLC’s option, which option is available through March 2025 and we do not expect to extend.

In connection with the execution of the third amended commitment letter, NCLC agreed to repurchase all of the outstanding $250 million aggregate principal amount of 9.75% senior secured notes due 2028 at a negotiated premium plus accrued and unpaid interest thereon.

See Note 9 – “Long-Term Debt” for more information.

In April 2024, we obtained export credit financing for 80% of the contract price of two new Regent Seven Seas Cruises ship orders and two new Oceania Cruises ship orders as well as related premiums.

Contemporaneously, the ship orders became effective.

The Norwegian brand also placed a four-ship order, for which the shipbuilding contracts were finalized in February 2025 and financing is still being finalized.

We refer you to “—Liquidity and Capital Resources— Future Capital Commitments” and “—Liquidity and Capital Resources— Material Cash Requirements” for details regarding our newbuild orders.

Additionally, in April 2024, a €200 million commitment became available that can be used for future newbuild payments.

See Note 9 – “Long-Term Debt” for more information.

In September 2024, NCLC issued $315.0 million aggregate principal amount of 6.250% senior unsecured notes due 2030.

The net proceeds, together with cash on hand, were used to redeem $315.0 million aggregate principal amount of the 3.625% senior unsecured notes due 2024, including to pay any accrued and unpaid interest thereon.

See Note 9 – “Long-Term Debt” for more information.

In January 2025, the full amount of outstanding borrowings under the Breakaway one loan, Breakaway two loan, Marina newbuild loan and Riviera newbuild loan, plus any accrued and unpaid interest thereon, was repaid with funds drawn from the Revolving Loan Facility.

Financing Transactions

NCLC also issued $1.8 billion aggregate principal amount of 6.750% senior unsecured notes due 2032.

The net proceeds, together with cash on hand, were used to redeem $600.0 million aggregate principal amount of 8.375% senior secured notes due 2028 and $1.2 billion aggregate principal amount of 5.875% senior unsecured notes due 2026, together with any accrued and unpaid interest thereon, and to pay any related transaction premiums, fees and expenses.

Concurrently, the Revolving Loan Facility was increased from $1.2 billion to $1.7 billion with the maturity date extended to 2030 and the collateral of the Revolving Loan Facility and the 8.125% senior secured notes due 2029 were modified.

thereon, and to pay any related transaction premiums, fees and expenses.

Concurrently, the Revolving Loan Facility was increased from $1.2 billion to $1.7 billion with the maturity date extended to 2030.

In April 2025, certain holders exchanged $353.9 million of 2025 Exchangeable Notes for 2030 0.875% Exchangeable Notes and an aggregate Cash Payment of $64.0 million, plus accrued and unpaid interest on the 2025 Exchangeable Notes that were exchanged to, but excluding, the closing date of the Exchange.

Additionally, in April 2025, the Company completed April Equity Offerings of 3,358,098 ordinary shares to those holders at a price of $19.06 per share.

The Company used the net proceeds from the April Equity Offerings, together with cash on hand, to make the Cash Payment.

In June 2025, NCLC amended the Seventh ARCA to increase the aggregate amount of the lenders’ commitments under the Revolving Loan Facility from $1.7 billion to approximately $2.5 billion.

In September 2025, NCLC issued approximately $1.4 billion of 2030 0.750% Exchangeable Notes, $1.2 billion of 2031 Notes, and $850.0 million of 2033 Notes.

Additionally, in September 2025, the Company completed the September Equity Offering with certain institutional investors of 3,313,868 ordinary shares at a price of $24.53 per share.

The net proceeds from these transactions, together with cash on hand, were used to (i) complete the Repurchases of a portion of the 2027 1.125% Exchangeable Notes and 2027 2.50% Exchangeable Notes, (ii) complete the Tender Offer or redeem all of the 2026 Notes, 2027 Notes and 2029 Notes and (iii) pay related accrued and unpaid interest, transaction premiums, fees and expenses.

The collateral of the Revolving Loan Facility was also modified.

See Note 9 – “Long-Term Debt” for more information.

Update on Bookings

The Company continues to experience strong consumer demand for its offerings across itineraries and brands throughout 2025 and into 2026.

As a result, the Company remains at the upper range of its optimal booked position on a 12-month forward basis.

Margin Enhancement Initiative

During 2024, we continued to see improvements in operating costs from our ongoing margin enhancement initiative.

The Company continues to prioritize identifying and evaluating a variety of initiatives to improve its cost structure and margin profile, while preserving its brand equity and optimal guest satisfaction levels.

However, global macroeconomic events have created volatility and disruptions in the past that have adversely impacted our costs and they may do so again in the future.

Furthermore, we are exposed to fluctuations in the euro exchange rate for certain portions of ship construction contracts and various exchange rates for customer deposits that have not been hedged.

The Company enters 2026 against a pressured backdrop as it is slightly below the optimal booking range following certain execution missteps in aligning our commercial strategy with our deployment.

First-quarter performance reflects the absorption of a material increase in capacity in the Caribbean, while longer-term demand trends remain constructive.

The Company’s deployment shift is resulting in higher load factors.

Demand has been particularly strong across the Company’s luxury brands which benefit from longer booking curves.

Strategic Destination Investment

We announced a second phase of expansion plans for Great Stirrup Cay, the Company’s private island destination in The Bahamas, including a nearly six-acre Great Tides Waterpark expected to open in the summer of 2026.

The addition of the nearly six-acre, 19-slide, Great Tides Waterpark which includes a 800-foot dynamic river and a 9,000-square-foot kids’ splash zone, along with other new amenities, will further enhance the guest experience at one of our most popular destinations.

This is in addition to the previously announced pier, pool, family splash pad, welcome center and tram, which opened in 2025.

The second side of the pier is also expected to open in the summer of 2026.

Strategic Cost Optimization and Macroeconomic Trends

Our strategic cost optimization efforts are driving a disciplined, company-wide focus on identifying efficiencies and optimizing costs across the organization.

These initiatives are designed to deliver sustainable savings without compromising the guest experience or the quality of our offerings.

Beyond the financial impact, this effort represents an evolution in our culture, embedding cost awareness, accountability, and continuous improvement into the way we operate.

While macroeconomic headwinds or misalignment between our commercial strategy and deployment have and may put pressures on revenue, we believe these impacts may be at least partially offset through the continued execution of our cost optimization efforts.

Our focus remains on managing the business for the long term, balancing disciplined pricing and cost control with guest experience and strategic investments for the future.

Furthermore, we are exposed to fluctuations in the euro exchange rate for certain portions of ship construction contracts, euro-denominated debt and

various exchange rates for customer deposits that have not been hedged.

See “Item 1A—Risk Factors” in our Annual Report for additional information.

Climate Change

We believe the increasing focus on climate change, including the Company’s targets for greenhouse gas reductions, and evolving regulatory requirements will materially impact our future capital expenditures and results of operations.

We have set interim targets to guide us on our path to net zero and provide more details about them in our annual Sail & Sustain Report (which does not constitute a part of, and shall not be deemed incorporated by reference into, this Report).

We expect to incur significant expenses related to these regulatory requirements and commitments, which have and will include expenses related to GHG emissions reduction initiatives, including modifications to our ships, and have and will include the purchase of emissions allowances, among other things.

We believe the increasing focus on climate change, including the Company’s targets for greenhouse gas (“GHG”) reductions, and evolving regulatory requirements will materially impact our future capital expenditures and results of operations.

We have set interim targets to guide us on our path to net zero GHG emissions and provide more details about such targets in our annual Sail & Sustain Report (which does not constitute a part of, and shall not be deemed incorporated by reference into, this report).

During 2025, we spent $36.1 million on capital expenditures for projects that are intended to reduce carbon emissions from our existing fleet.

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We are also evaluating the effects of global climate change-related requirements, which are still evolving, including our ability to mitigate certain future expenses through initiatives to reduce GHG emissions;

consequently, the full impact to the Company is not yet known.

consequently, the impact to the Company is not known.

During 2025, we recognized $34.2 million of expense related to compliance with the E.U.

ETS, a portion of which was collected directly from passengers through revenue.

ETS, the majority of which was collected directly from passengers through revenue.

Additionally, our ships, port facilities, corporate offices and island destinations have in the past and may again be adversely affected by an increase in the frequency and intensity of adverse weather conditions caused by climate change.

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Refer to “Impacts related to climate change may adversely affect our business, financial condition and results of operations” in “Item 1A—Risk Factors” for further information.

Deferred Tax Asset Valuation Allowance and Income Tax Expense

The Company continues to maintain a full valuation allowance against the net deferred tax assets in the Bermuda jurisdiction, which has a balance of $547.8 million as of December 31, 2024, primarily related to a 3-year cumulative loss.

Although the Pillar 2 rules became effective in Bermuda as of January 1, 2025, the Company does not expect to have a material change in its income tax expense for 2025.

Additionally, the Company previously provided a full valuation allowance against the net deferred tax assets in the U.S.

jurisdiction.

As discussed in Note 12 – “Income Taxes” to our financial statements, during the fourth quarter of 2024, the Company released $161.9 million of the valuation allowance related to its U.S.

net deferred tax assets, resulting in a non-cash benefit to income tax expense.

In determining the need for a valuation allowance, the Company considers both the positive and negative evidence including its ability to forecast future operating results, historical tax losses and its ability to utilize deferred tax assets within the requisite carryforward periods.

After weighing all of the evidence, the Company determined that the positive evidence outweighed the negative evidence and concluded that it is more likely than not that the majority of the U.S.

net deferred tax assets will be realized.

The positive evidence considered by the Company includes continuous improvement in its operating results and profitability, implementation of certain tax planning actions, its projections showing sufficient utilization of tax attributes within their requisite carryforward periods, the non recurring nature of the losses tied to the suspension of sailings due to COVID-19 and not having a history of expiration of tax attributes.

The negative evidence considered includes that the Company has been in a three-year cumulative book loss position for the past four years.

The Company continues to maintain a valuation allowance against the deferred tax assets for which it concluded it is more likely than not they will not be realized.

The Company will continue to evaluate all relevant positive and negative evidence in monitoring the realizability of its deferred tax assets and determining the appropriate timing for the recognition of any additional valuation allowance reversal.

The ultimate realization of the Company’s deferred tax assets is dependent upon a number of uncertainties including future taxable income of the appropriate character during the requisite carryforward periods.

Executive Overview

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For the year ended December 31, 2024, we had net income and diluted EPS of $910.3 million and $1.89, respectively.

Operating income increased to $1.5 billion for the year ended December 31, 2024 from $930.9 million for the year ended December 31, 2023.

We had Adjusted Net Income and Adjusted EPS of $937.5 million and $1.82, respectively, for the year ended December 31, 2024, including $(36.0) million of adjustments primarily consisting of the reversal of a valuation allowance partially offset by share-based compensation, compared to Adjusted Net Income and Adjusted EPS of $298.0 million and $0.70, respectively, for the year ended December 31, 2023.

Operating income increased to $1.6 billion for the year ended December 31, 2025 from $1.5 billion for the year ended December 31, 2024.

We had Adjusted Net Income and Adjusted EPS of $1.0 billion and $2.11, respectively, for the year ended December 31, 2025, including $607.6 million of adjustments primarily related to certain euro foreign currency remeasurements and losses on extinguishment and modification of debt, compared to Adjusted Net Income and Adjusted EPS of $911.7 million and $1.77, respectively, for the year ended December 31, 2024.

Adjusted EBITDA increased 11.4% to $2.7 billion for the year ended December 31, 2025 from $2.5 billion for the year ended December 31, 2024.

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Securities and Exchange Commission on February 27, 2025.

We reported total revenue, total cruise operating expense, operating income and net income as follows (in thousands, except per share data):

We reported total revenue, total cruise operating expense, operating income, net income and EPS as follows (in thousands, except per share data):

Year Ended December 31,

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Net income before income taxes

Income tax benefit

Income tax benefit (expense)

The following table sets forth selected statistical information:

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deferred tax asset valuation allowance (4)

Information technology write-off (5)

Net foreign currency adjustments on euro-denominated debt (6)

Effect of dilutive securities - exchangeable notes (7)

Adjusted Net Income

Diluted weighted-average shares outstanding - Net income and Adjusted Net Income

Diluted weighted-average shares outstanding - Net income

Diluted weighted-average shares outstanding - Adjusted Net Income (7)

Non-cash deferred compensation expenses related to the crew pension plan are included in payroll and related expense and other income (expense), net.

Non-cash share-based compensation expenses related to equity awards are included in marketing, general and administrative expense and payroll and related expense.

Losses on extinguishments and modifications of debt are primarily included in interest expense, net.

Non-cash income tax benefit related to the reversal of a valuation allowance on our U.S.

deferred tax assets.

The deferred tax assets accumulated during the COVID-19 pandemic and a portion of the valuation allowance was released related to the deferred tax assets that more likely than not will be realized in the future.

We consider this adjustment to be non-recurring as it originated as a result of losses incurred during the pandemic.

Future income tax expense is not expected to change materially as a result of the reversal.

Losses on extinguishments and modifications of debt are included in interest expense, net.

Non-cash income tax benefit related to the reversal of valuation allowances on our U.S.

federal and state deferred tax assets.

The deferred tax assets primarily represent an accumulation of net operating losses during the COVID-19 pandemic and a portion of the valuation allowances were released related to the deferred tax assets that more likely than not will be realized in the future.

We consider these adjustments to be non-recurring as they originated as a result of losses incurred during the pandemic for each jurisdiction.

Future income tax expense is not expected to change materially as a result of the reversals.

Losses related to the write-off of an internal use-software project, which are included in depreciation and amortization expense.

Net gains and losses for foreign currency remeasurements of our euro-denominated debt principal included in other income (expense), net, which is primarily not hedged.

The impact of the above non-GAAP adjustments results in an anti-dilutive effect on Adjusted EPS related to our exchangeable notes for which we are adjusting the impact from GAAP net income and dilutive weighted average shares.

EBITDA and Adjusted EBITDA were calculated as follows (in thousands):

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Interest expense, net

Income tax benefit

Income tax (benefit) expense

Depreciation and amortization expense

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Total revenue increased 3.7% to $9.8 billion in 2025 compared to $9.5 billion in 2024 primarily due to an increase in Capacity Days and an increase in passenger ticket pricing and onboard spending.

The increase in Capacity Days was primarily related to the delivery of three new ships in 2023 partially offset by increased Dry-dock days in 2024.

Total cruise operating expense increased 4.0% in 2024 compared to 2023 primarily related to the delivery of three new ships in 2023 partially offset by a reduction in air costs largely due to changes in itinerary mix.

Total other operating expense increased 8.1% in 2024 compared to 2023 primarily related to an increase in depreciation expense from the delivery of three new ships in 2023 and variable compensation due to strong financial performance of the business.

The increase in Capacity Days was primarily related to the delivery of Norwegian Aqua in March 2025 and Oceania Allura in July 2025 partially offset by increased number of Berths in Dry-dock as larger ships were in Dry-dock.

Total cruise operating expense decreased 0.9% in 2025 compared to 2024 primarily related to a reduction in air costs largely due to changes in itinerary mix and fuel cost offset by delivery of Norwegian Aqua in March 2025 and Oceania Allura in July 2025.

Total other operating expense increased 13.0% in 2025 compared to 2024 primarily related to an increase in depreciation and amortization expense from the delivery of the two ships, ship improvements and write-off of an internal use-software project.

Additionally, the increase in other operating expense includes an increase in marketing, general and administrative expense from higher advertising and promotions.

Interest expense, net was $953.5 million in 2025 compared to $747.2 million in 2024.

The increase in 2024 primarily reflects higher losses from extinguishment of debt and debt modification costs, which were $29.2 million in 2024 and $8.8 million in 2023.

Other income (expense), net was income of $54.2 million in 2024 compared to expense of $40.2 million in 2023 primarily related to net gains and losses on foreign currency remeasurements.

Income tax benefit was $137.4 million in 2024 compared to $3.0 million in 2023.

The increase in the benefit was due to the reversal of the majority of our valuation allowance for the U.S.

deferred tax assets in 2024.

The change in interest expense reflects higher losses in 2025 from extinguishment of debt and debt modification costs, which were $272.5 million in 2025 compared to $29.2 million in 2024.

Excluding these losses, interest expense decreased primarily as a result of lower average rates, partially offset by higher debt outstanding in connection with the delivery of ships.

Other income (expense), net was expense of $178.6 million in 2025 compared to income of $54.2 million in 2024 primarily related to net gains and losses on foreign currency remeasurements.

Income tax benefit (expense) was an expense of $5.5 million in 2025 compared to a benefit of $137.4 million in 2024.

The decrease in the benefit was due to the reversal of the majority of our valuation allowance for the U.S.

federal deferred tax assets in 2024.

Liquidity and Capital Resources

As of December 31, 2024, our liquidity of approximately $2.0 billion consisted of cash and cash equivalents of $190.8 million, borrowings available of $955.0 million under our Revolving Loan Facility, a €200 million commitment that can be used for future newbuild payments and a $650 million undrawn commitment less related fees.

As of December 31, 2025, our liquidity of approximately $1.6 billion consisted of cash and cash equivalents of $209.9 million and borrowings available of $1.4 billion under our Revolving Loan Facility.

Our primary ongoing liquidity requirements are to finance working capital, capital expenditures and debt service.

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Our business model, along with our liquidity and undrawn export-credit backed facilities , allows us to operate with a working capital deficit and still meet our operating, investing and financing needs.

In February 2024, NCLC and the Commitment Parties entered into the third amended commitment letter, which became effective in March 2024.

Additionally, in April 2024, a €200 million commitment became available that can be used for future newbuild payments.

In September 2024, NCLC issued $315.0 million aggregate principal amount of 6.250% senior unsecured notes due 2030.

NCLC also issued $1.8 billion aggregate principal amount of 6.750% senior unsecured notes due 2032.

Concurrently, the Revolving Loan Facility was increased from $1.2 billion to $1.7 billion with the maturity date extended to 2030, and the collateral of the Revolving Loan Facility and the 8.125% senior secured notes due 2029 were modified.

Concurrently, the Revolving Loan Facility was increased from $1.2 billion to $1.7 billion with the maturity date extended to 2030.

Additionally, in April 2025, the Company completed April Equity Offerings of 3,358,098 ordinary shares to those holders at a price of $19.06 per share.

The Company used the net proceeds from the April Equity Offerings, together with cash on hand, to make the Cash Payment.

In June 2025, NCLC amended the Seventh ARCA to increase the aggregate amount of the lenders’ commitments under the Revolving Loan Facility from $1.7 billion to approximately $2.5 billion.

In September 2025, NCLC issued approximately $1.4 billion of 2030 0.750% Exchangeable Notes, $1.2 billion of 2031 Notes, and $850.0 million of 2033 Notes.

Additionally, in September 2025, the Company completed the September Equity Offering with certain institutional investors of 3,313,868 ordinary shares at a price of $24.53 per share.

The collateral of the Revolving Loan Facility was also modified.

Refer to Note 9 – “Long-Term Debt” for further details about the above financing transactions.

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There can be no assurance that the accuracy of the assumptions used to estimate our liquidity requirements will be correct, and our ability to be predictive is uncertain due to the dynamic nature of the current operating environment, including any current macroeconomic events and conditions such as inflation, rising fuel prices and higher interest rates.

Within the next twelve months, we may pursue additional refinancings in order to reduce interest expense and/or extend debt maturities.

We expect the holders of the 2025 Exchangeable Notes maturing in August 2025 will exchange their 2025 Exchangeable Notes for NCLH ordinary shares if not refinanced prior to maturity.

Within the next twelve months, we may pursue additional refinancings in order to reduce interest expense and/or extend debt maturities or pursue other balance sheet optimization transactions.

There is no assurance that cash flows from operations and additional financings will be available in the future to fund our future obligations.

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Generally, if an event of default under any debt agreement occurs, then pursuant to cross default and/or cross acceleration clauses, substantially all of our outstanding debt and derivative contract payables could become due, and all debt and derivative contracts could be terminated, which would have a material adverse impact to our operations and liquidity.

Our Moody’s long-term issuer rating is B1, our senior secured rating is Ba3 and our senior unsecured rating is B3.

Our S&P Global issuer credit rating is B+, our issue-level rating on our $1.7 billion Revolving Loan Facility and $790 million 8.125% senior secured notes due 2029 is BB, our issue-level rating on our other senior secured notes is BB- and our senior unsecured rating is B+.

Our Moody’s long-term issuer rating is B1 and our senior unsecured rating is B3.

Our S&P Global issuer credit rating is B+, our issue-level rating on our Revolving Loan Facility is BB and our senior unsecured rating is B+.

If our credit ratings were to be downgraded as has occurred in the past, or general market conditions were to ascribe higher risk to our rating levels, our industry, or us, our access to capital and the cost of any debt or equity financing will be negatively impacted.

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However, there is no guarantee that debt or equity financings will be available in the future to fund our obligations, or that they will be available on terms consistent with our expectations.

As of December 31, 2024, we had advance ticket sales of $3.2 billion, including the long-term portion.

We also have agreements with our credit card processors that, as of December 31, 2024, governed approximately $2.8 billion in advance ticket sales that had been received by the Company relating to future voyages.

These agreements allow the credit card processors to require under certain circumstances, including the existence of a material adverse change, excessive chargebacks and other triggering events, that the Company maintain a reserve which would be satisfied by posting collateral.

The Company also has agreements with its credit card processors that govern the vast majority of advance ticket sales that are received by the Company relating to future voyages.

These agreements allow the credit card processors to require, under certain circumstances, that the Company maintain a reserve which would be satisfied by posting collateral.

Although the agreements vary, these requirements may generally be satisfied either through a percentage of customer payments withheld or providing cash funds directly to the card processor.

Any cash reserve or collateral requested could be increased or decreased.

As of December 31, 2024, we had cash collateral reserves of approximately $0.8 million with credit card processors recognized in accounts receivable, net.

The $31.5 million previously recognized in other long-term assets was returned to the Company during the year ended December 31, 2024.

We may be required to pledge additional collateral and/or post additional cash reserves or take other actions in the future that may adversely affect our liquidity.

As of December 31, 2025, the Company was not required to maintain any reserve funds.

Sources and Uses of Cash

In this section, references to 2024 refer to the year ended December 31, 2024, references to 2023 refer to the year ended December 31, 2023.

Net cash provided by operating activities was $2.0 billion in 2024 and 2023.

In this section, references to 2025 refer to the year ended December 31, 2025 and references to 2024 refer to the year ended December 31, 2024.

Net cash provided by operating activities was $2.1 billion in 2025 and $2.0 billion in 2024.

Net cash provided by operating activities included net income and the timing differences in cash receipts and payments relating to operating assets and liabilities.

The net cash provided by operating activities in 2024 included net income of $910.3 million and an increase in advance ticket sales of $35.7 million.

The net cash provided by operating activities in 2023 included net income of $166.2 million, the return of $500 million cash collateral from one credit card processor and an increase in advance ticket sales of $503.7 million.

Net cash used in investing activities was $3.3 billion in 2025, primarily related to the delivery of Norwegian Aqua and Oceania Allura in 2025.

Net cash used in investing activities was $1.2 billion in 2024, primarily related to newbuild payments and ship improvements.

Net cash used in investing activities was $2.9 billion in 2023, primarily related to three new ship deliveries and newbuild payments.

Net cash used in financing activities was $1.0 billion in 2024, primarily due to repayments of newbuild loans, our 2028 Secured Notes and the 3.625% senior notes due 2024 partially offset by the proceeds from newbuild loan facilities and the 2030 Notes.

Net cash provided by financing activities was $346.9 million in 2023, primarily due to newbuild loans and $1.6 billion from our various note offerings, partially offset by debt repayments and a net decrease in our Revolving Loan Facility balance.

Net cash provided by financing activities was $1.2 billion in 2025, primarily due to newbuild loans related to the delivery of Norwegian Aqua and Oceania Allura and draws of our Revolving Loan Facility partially offset by payments on other newbuild loan facilities.

Net cash used in financing activities was $1.0 billion in 2024, primarily due to repayments of newbuild loans, our 9.75% senior secured notes due 2028 and the 3.625% senior unsecured notes due 2024 partially offset by the proceeds from newbuild loan facilities and the 6.25% senior unsecured notes due 2030.

For the Company’s cash flow activities for the fiscal year ended December 31, 2023, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s annual report on Form 10-K for the year ended December 31, 2024, which was filed with the U.S.

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Future capital commitments consist of contracted commitments, including ship construction contracts.

Anticipated expenditures related to ship construction contracts and growth are $2.5 billion, $2.4 billion and $2.4 billion for the years ending December 31, 2025, 2026 and 2027, respectively.

We have export-credit backed financing in place for the anticipated expenditures related to ship construction contracts of $1.5 billion, $1.5 billion and $1.8 billion for the years ending December 31, 2025, 2026 and 2027, respectively.

Anticipated expenditures related to ship construction contracts and growth, which includes private island developments and enhancements and other strategic growth initiatives, are $2.9 billion, $2.9 billion and $1.8 billion for the years ending December 31, 2026, 2027 and 2028, respectively.

We have export-credit backed financing in place for the anticipated expenditures related to ship construction contracts of $1.6 billion, $2.0 billion and $1.4 billion for the years ending

December 31, 2026, 2027 and 2028, respectively.

Anticipated other non-newbuild capital expenditures are $0.5 billion for the year ending December 31, 2026.

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The following chart discloses details about our newbuild program.

The impacts of initiatives to improve environmental sustainability and modifications the Company plans to make to its newbuilds and/or other macroeconomic conditions and events have resulted in delays in expected ship deliveries.

The impacts of initiatives to improve environmental sustainability and modifications that NCLH plans to make to its newbuilds to improve their profitability and better space out the newbuilds, along with shipyard availability, have resulted in us resetting delivery dates for certain expected ship deliveries.

These and other impacts could result in additional delays in ship deliveries in the future, which may be prolonged.

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Norwegian Cruise Line

Norwegian Aqua

Contract effective / financed (4)

Oceania Cruises

Contract effective / financed (4)

Norwegian Cruise Line

Prima Class 4

Norwegian Luna

Contract effective / financed (3)

Regent Seven Seas

Regent Seven Seas Cruises

Prestige Class 1

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Next Gen "Methanol-Ready (2) " Prima Class 5

Norwegian Aura

Contract effective / financed (3)

Oceania Cruises

Sonata Class 1

Oceania Sonata

Contract effective / financed (3)

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Contract effective / financed (3)

Expected 2029 (3)

Oceania Cruises

Sonata Class 2

Oceania Arietta

Contract effective / financed (3)

Regent Seven Seas

Norwegian Cruise Line

Contract effective / financed (3)

Regent Seven Seas Cruises

Prestige Class 2

Contract effective / financed (3)

Norwegian Cruise Line

Contract effective / financing is being negotiated.

Oceania Cruises

Contract effective, but not financed.

Option to cancel.

Oceania Cruises

Contract effective, but not financed.

Option to cancel.

Sonata Class 3

Contract effective, but not yet financed

Norwegian Cruise Line

Contract effective / financing is being negotiated.

Contract effective / financed (3)

Regent Seven Seas Cruises

Prestige Class 3

Contract will be effective upon financing

Norwegian Cruise Line

Contract effective / financing is being negotiated

Oceania Cruises

Sonata Class 4

Contract effective, but not yet financed

Norwegian Cruise Line

Contract effective / financing is being negotiated

Regent Seven Seas Cruises

Prestige Class 4

Contract will be effective upon financing

Oceania Cruises

Sonata Class 5

Contract will be effective upon financing

Norwegian Cruise Line

Contract will be effective upon financing

Berths and gross tons are preliminary and subject to change as we approach delivery.

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Additional modifications will be needed to fully enable the use of green methanol.

Delivery for the second Oceania Cruises ship is contractually scheduled for the fourth quarter of 2028, but may be delayed to 2029, which would result in additional fees.

We have obtained export-credit backed financing which is expected to fund approximately 80% of the contract price of each ship as well as related financing premiums, subject to certain conditions.

We have the option to cancel the effective two-ship order for Oceania Cruises.

Delivery dates may be delayed at the option of the builder, which would result in additional fees.

As of December 31, 2024, the combined contract prices, including amendments and change orders, of the 13 ships on order for delivery (which excludes the two ships on order for Oceania Cruises, which are currently scheduled for delivery in 2030 and 2031, that we have the option to cancel) was approximately €17.5 billion, or $18.1 billion based on the euro/U.S.

We have obtained export-credit financing which is expected to fund approximately 80% of the contract price of each ship as well as related financing premiums, subject to certain conditions.

As of December 31, 2025, the combined contract prices, including amendments and change orders, of the 13 ships on order for delivery that are effective was approximately €18.3 billion, or $21.5 billion based on the euro/U.S.

dollar exchange rate as of December 31, 2025.

If the two ships on order for Oceania Cruises are cancelled, there will be incremental corresponding adjustments to the purchase price of other applicable newbuilds not to exceed €51 million.

We do not anticipate any contractual breaches or cancellations to occur, except as noted above.

We do not anticipate any contractual breaches or cancellations to occur.

However, if any such events were to occur, it could result in, among other things, the forfeiture of prior deposits or payments made by us and potential claims and impairment losses which may materially impact our business, financial condition and results of operations.

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(1) Includes principal as well as estimated interest payments with Term Secured Overnight Financing Rate (“SOFR”) held constant as of December 31, 2025.

Includes exchangeable notes which can be settled in NCLH ordinary shares.

Excludes the impact of any future possible refinancings and undrawn export-credit backed facilities.

Subsequent to December 31, 2024, we completed various financing transactions, including the repayment of outstanding borrowings under the Breakaway one loan, Breakaway two loan, Marina newbuild loan and Riviera newbuild loan, plus any accrued and unpaid interest thereon using funds from our Revolving Loan Facility and NCLC redeemed $600.0 million aggregate principal amount of 8.375% senior secured notes due 2028 and $1.2 billion aggregate principal amount of 5.875% senior unsecured notes due 2026, together with any accrued and unpaid interest thereon from the net proceeds of $1.8 billion aggregate principal amount of 6.750% senior unsecured notes due 2032, together with cash on hand.

See Note 9 – “Long-Term Debt” for further information.

(2) Ship construction contracts are for our 13 non-cancelable newbuild ships based on the euro/U.S.

dollar exchange rate as of December 31, 2025.

As of December 31, 2024, we have committed undrawn export-credit backed facilities of $8.6 billion which funds approximately 80% of our ship construction contracts, with the exception of the two ships on order for Oceania Cruises that we have the option to cancel and the four additional ships on order for Norwegian Cruise Line with currently scheduled delivery from 2030 to 2036.

The above presentation reflects the current delivery dates;

however, certain delivery dates may be delayed at the option of the builder.

As of December 31, 2025, we have committed undrawn export-credit backed facilities of $12.2 billion which funds approximately 80% of our effective ship construction contracts, with the exception of the two Sonata Class Ships on order for Oceania Cruises with currently scheduled delivery in 2032 and 2035 and the two additional ships on order for Norwegian Cruise Line with currently scheduled delivery in 2034 and 2036.

For other operational commitments for lease and port obligations, we refer you to Note 6 – “Leases” and Note 13 – “Commitments and Contingencies,” respectively, for further information.

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Certain of our debt agreements contain covenants that, among other things, require us to maintain a minimum level of liquidity, as well as limit our net funded debt-to-capital ratio and maintain certain other ratios.

Approximately $15.6 billion of our assets were pledged as collateral for certain of our debt as of December 31, 2024.

Approximately $14 billion of the net book value of our assets were pledged as collateral for certain of our debt as of December 31, 2025.

We believe we were in compliance with our covenants as of December 31, 2025.

For additional information regarding certain ratios included in such covenants, see “Item 1A—Risk Factors” in this Annual Report.

In addition, our existing debt agreements restrict, and any of our future debt arrangements may restrict, among other things, the ability of our subsidiaries, including NCLC, to make distributions and/or pay dividends to NCLH and NCLH’s ability to pay cash dividends to its shareholders.

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However, we do not believe that these restrictions have had or are expected to have an impact on our ability to meet any cash obligations.

We believe our cash on hand, borrowings available under our Revolving Loan Facility, expected future operating cash inflows and our ability to issue debt securities or additional equity securities, will be sufficient to fund operations, debt payment requirements, capital expenditures and maintain compliance with covenants under our debt agreements over the next 12-month period.

payment requirements, capital expenditures and maintain compliance with covenants under our debt agreements over the next 12-month period.

Refer to “—Liquidity and Capital Resources—General” for further information regarding liquidity.

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If any of these transactions were to occur, they may be financed through the incurrence of additional permitted indebtedness, through cash flows from operations, or through the issuance of debt, equity or equity-related securities.

Additionally, we similarly consider opportunities for the sale of ships and long-term charters with purchase options.

For example, we are currently contemplating a long-term charter for residences at sea with a purchase option for a nominal value at the end of the lease period.

Additionally, we consider opportunities for the sale of ships and long-term charters with purchase options.

For example, the Company executed long-term charter agreements, each inclusive of purchase options, for Norwegian Sky beginning in 2026 and Norwegian Sun beginning in 2027.

We are currently contemplating additional ships sales or long-term charters with a purchase option at the end of the lease period.

We are currently negotiating a bareboat charter with a purchase option for Seven Seas Navigator, which is expected to be completed before the end of the first quarter of 2026.

These types of agreements are being pursued as part of our ship disposal strategy for certain older vessels in our fleet.

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 7. Management’s Discussion and Analysis