What changed in this filing

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Item 1. Financial Statements

2024-08-08 compared with 2024-05-07 · 174 added, 71 removed, 421 unchanged (37% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

Passenger ticket

25 unchanged sentences

Three Months Ended

Six Months Ended

Net income (loss)

31 unchanged sentences

980,000,000 shares authorized;

429,025,827 shares issued and outstanding at March 31, 2024 and 425,546,570 shares issued and outstanding at December 31, 2023

439,686,822 shares issued and outstanding at June 30, 2024 and 425,546,570 shares issued and outstanding at December 31, 2023

Additional paid-in capital

9 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities

17 unchanged sentences

Additions to property and equipment, net

Cash paid on settlement of derivatives

Acquisition, net of cash acquired

Net cash used in investing activities

15 unchanged sentences

(in thousands)

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Comprehensive

1 unchanged sentence

Income (Loss)

Equity (Deficit)

Balance, March 31, 2024

( 6,882,784 )

Share-based compensation

Common share issuance for NCLC exchangeable notes

Net share settlement of restricted share units

Other comprehensive loss, net

Balance, June 30, 2024

( 6,719,348 )

Six Months Ended June 30, 2024

Comprehensive

Shareholders’

Income (Loss)

Balance, December 31, 2023

2 unchanged sentences

Issuance of shares under employee related plans

Common share issuance for NCLC exchangeable notes

Net share settlement of restricted share units

Other comprehensive income, net

Balance, March 31, 2024

Balance, June 30, 2024

( 6,719,348 )

Three Months Ended March 31, 2023

The accompanying notes are an integral part of these consolidated financial statements.

Norwegian Cruise Line Holdings Ltd.

Consolidated Statements of Changes in Shareholders’ Equity (Deficit) - Continued

(in thousands)

Three Months Ended June 30, 2023

Comprehensive

2 unchanged sentences

Equity (Deficit)

Balance, March 31, 2023

( 7,225,636 )

Share-based compensation

Issuance of shares under employee related plans

Net share settlement of restricted share units

Other comprehensive loss, net

Balance, June 30, 2023

( 7,139,520 )

Six Months Ended June 30, 2023

Comprehensive

Shareholders’

Income (Loss)

Balance, December 31, 2022

4 unchanged sentences

Other comprehensive loss, net

Balance, March 31, 2023

Balance, June 30, 2023

( 7,139,520 )

9 unchanged sentences

We are a leading global cruise company which operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands.

As of March 31, 2024, we had 32 ships with approximately 66,400 Berths and had orders for five additional ships to be delivered through 2028.

As of March 31, 2024, we had four Prima Class Ships on order with currently scheduled delivery dates from 2025 through 2028, and we had one Allura Class Ship on order for delivery in 2025.

Subsequent to March 31, 2024, we announced anticipated additional newbuilds for our fleet.

As of June 30, 2024, we had 32 ships with approximately 66,400 Berths.

The Company expects to add thirteen additional ships to our fleet from 2025 through 2036.

We have four Prima Class Ships on order with currently scheduled delivery dates from 2025 through 2028.

We have one Allura Class Ship on order for delivery in 2025.

We also have orders for two new classes of ships:

four Oceania Cruises ships with deliveries scheduled from 2027 through 2031 and two Prestige Class Ships with deliveries scheduled in 2026 and 2029.

The orders for two of the new class of Oceania Cruises ships currently scheduled for delivery in 2030 and 2031 are expected to be cancelled and replaced with orders for four Norwegian Cruise Line ships of a new class with expected delivery dates from 2030 through 2036.

Summary of Significant Accounting Policies

As of March 31, 2024, we had liquidity of approximately $ 2.4 billion, including cash and cash equivalents of $ 559.8 million and borrowings available under our $ 1.2 billion undrawn Revolving Loan Facility and $ 650 million undrawn commitment of senior unsecured notes issuable by NCLC less related fees (see Note 6 – “Long-Term Debt”).

Additionally, in April 2024, a € 200 million commitment became available that can be used for future newbuild payments (see Note 6 – “Long-Term Debt”).

As of June 30, 2024, we had liquidity of approximately $ 2.7 billion, including cash and cash equivalents of $ 594.1 million, borrowings available under our $ 1.2 billion undrawn Revolving Loan Facility, a € 200 million commitment that can be used for future newbuild payments and a $ 650 million undrawn commitment of senior unsecured notes issuable by NCLC less related fees (see Note 8 – “Long-Term Debt” for further information regarding our commitments).

We believe that we have sufficient liquidity to fund our obligations and expect to remain in compliance with our financial covenants for at least the next twelve months from the issuance of these financial statements.

10 unchanged sentences

Three Months Ended

Six Months Ended

Net income (loss) - Basic EPS

Effect of dilutive securities - exchangeable notes

Net income (loss) and assumed conversion of exchangeable notes - Diluted EPS

Basic weighted-average shares outstanding

Dilutive effect of share awards

Dilutive effect of exchangeable notes

Diluted weighted-average shares outstanding

1 unchanged sentence

Only the interest expense and weighted average shares for exchangeable notes that are dilutive are included in the effect of dilutive securities above.

During the three months ended March 31, 2024 and 2023, each of the exchangeable notes was anti-dilutive.

During the three months ended June 30, 2023 and the six months ended June 30, 2024, the 2024 Exchangeable Notes, 2025 Exchangeable Notes and 2027 2.5% Exchangeable Notes were anti-dilutive.

During the six months ended June 30, 2023, each of the exchangeable notes was anti-dilutive.

Share awards are evaluated for a dilutive or anti-dilutive impact on EPS using the treasury stock method.

For the three months ended March 31, 2024 and 2023, a total of 91.1 million and 89.4 million shares, respectively, have been excluded from diluted weighted-average shares outstanding because the effect of including them would have been anti-dilutive.

For the three months ended June 30, 2024 and 2023, a total of 7.1 million and 55.7 million shares, respectively, and for the six months ended June 30, 2024 and 2023, a total of 53.3 million and 89.6 million shares, respectively, have been excluded from diluted weighted-average shares outstanding because the effect of including them would have been anti-dilutive.

Foreign Currency

2 unchanged sentences

The resulting gains or losses are recognized in our consolidated statements of operations within other income (expense), net.

We recognized a gain of $ 13.3 million and a loss of $ 8.7 million for the three months ended March 31, 2024 and 2023, respectively, related to remeasurement of assets and liabilities denominated in foreign currencies.

We recognized a gain of $ 2.3 million and a loss of $ 11.1 million for the three months ended June 30, 2024 and 2023, respectively, and a gain of $ 15.6 million and a loss of $ 19.8 million for the six months ended June 30, 2024 and 2023, respectively, related to remeasurement of assets and liabilities denominated in foreign currencies.

Remeasurements of foreign currency related to operating activities are recognized within changes in operating assets and liabilities in the consolidated statement of cash flows.

3 unchanged sentences

Accounts Receivable, Net

Accounts receivable, net included $ 19.8 million and $ 20.1 million due from credit card processors as of March 31, 2024 and December 31, 2023, respectively.

Accounts receivable, net included $ 12.4 million and $ 20.1 million due from credit card processors as of June 30, 2024 and December 31, 2023, respectively.

Recently Issued Accounting Guidance

4 unchanged sentences

These provisions are effective for fiscal years beginning after December 15, 2023 and interim periods after December 15, 2024.

ASU 2023-07 shall be applied retrospectively unless it

is impracticable to do so.

ASU 2023-07 shall be applied retrospectively unless it is impracticable to do so.

We are evaluating the impact of ASU 2023-07 on our notes to the consolidated financial statements.

4 unchanged sentences

We are evaluating the impact of ASU 2023-09 on our notes to the consolidated financial statements.

On April 25, 2024, Norwegian acquired 100 % of the voting equity interest of Independent Maritime Advisors Ltd.

(“IMA”), a consulting company specializing in project management for newbuilds and vessel conversions for $ 37.5 million, which consisted primarily of cash and also included deferred consideration and the settlement of a pre-existing relationship.

Norwegian acquired IMA to bring newbuild project management and supervision in-house and optimize the overall capital outflow for newbuild expenditures, which generates synergies that create goodwill.

The preliminary purchase price was allocated as follows (in thousands):

Assets, other than goodwill

Total consideration allocated, net of $ 4.7 million of cash acquired

As of June 30, 2024, the measurement period pertaining to the acquisition remains open and is subject to further adjustment.

The acquisition includes deferred consideration, which is currently considered probable of payment in full;

however, if new information arises, a change in consideration could impact our goodwill or liabilities.

The acquisition of IMA does not have a material impact on the Company’s consolidated statements of operations.

Revenue Recognition

3 unchanged sentences

Three Months Ended

Six Months Ended

North America

4 unchanged sentences

Other includes all other international territories.

Segment Reporting

Segment Reporting and Geographic Concentration

We have concluded that our business has a single reportable segment.

Each brand, Norwegian, Oceania Cruises and Regent, constitutes a business for which discrete financial information is available and management regularly reviews the brand level operating results and, therefore, each brand is considered an operating segment.

Our operating segments have similar economic and qualitative characteristics, including similar long-term margins, products and services;

therefore, we aggregate all of the operating segments into one reportable segment.

Although we sell cruises on an international basis, our passenger ticket revenue is primarily attributed to U.S.-sourced guests who make reservations through the U.S.

3 unchanged sentences

Receivables from customers are included within accounts receivable, net.

As of March 31, 2024 and December 31, 2023, our receivables from customers were $ 131.8 million and $ 126.4 million, respectively, primarily related to in-transit credit card receivables.

As of June 30, 2024 and December 31, 2023, our receivables from customers were $ 112.1 million and $ 126.4 million, respectively, primarily related to in-transit credit card receivables.

Future cruise credits that have been issued as face value reimbursement for cancelled bookings due to COVID-19 are approximately $ 64.5 million.

2 unchanged sentences

Our contract liabilities are included within advance ticket sales.

As of March 31, 2024 and December 31, 2023, our contract liabilities were $ 2.7 billion and $ 2.2 billion, respectively.

Of the amounts included within contract liabilities as of March 31, 2024, approximately 45 % were refundable in accordance with our cancellation policies.

As of June 30, 2024 and December 31, 2023, our contract liabilities were $ 2.9 billion and $ 2.2 billion, respectively.

Of the amounts included within contract liabilities as of June 30, 2024, approximately 40 % were refundable in accordance with our cancellation policies.

Of the deposits included within advance ticket sales, the majority are refundable in accordance with our cancellation policies and it is uncertain to what extent guests may request refunds.

For the three months ended March 31, 2024, $ 1.7 billion of revenue recognized was included in the contract liability balance at the beginning of the period.

For the six months ended June 30, 2024, $ 2.1 billion of revenue recognized was included in the contract liability balance at the beginning of the period.

Operating lease balances were as follows (in thousands):

Balance Sheet location

March 31, 2024

June 30, 2024

December 31, 2023

7 unchanged sentences

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) for the three months ended March 31, 2024 was as follows (in thousands):

Three Months Ended March 31, 2024

Accumulated other comprehensive income (loss) for the six months ended June 30, 2024 was as follows (in thousands):

Six Months Ended June 30, 2024

Comprehensive

4 unchanged sentences

Accumulated other comprehensive income (loss) at end of period

Accumulated other comprehensive income (loss) for the three months ended March 31, 2023 was as follows (in thousands):

Three Months Ended March 31, 2023

Accumulated other comprehensive income (loss) for the six months ended June 30, 2023 was as follows (in thousands):

Six Months Ended June 30, 2023

Comprehensive

7 unchanged sentences

(3) Includes $ 0.8 million of gains expected to be reclassified into earnings in the next 12 months.

Property and Equipment, Net

Property and equipment, net increased $ 199.7 million for the six months ended June 30, 2024 primarily due to ships under construction.

Long-Term Debt

12 unchanged sentences

Exchangeable Notes

The following is a summary of NCLC’s exchangeable notes as of March 31, 2024 (in thousands):

The following is a summary of NCLC’s exchangeable notes as of June 30, 2024 (in thousands):

Financing Fees

2 unchanged sentences

2027 2.5% Exchangeable Notes

(1) Classified within current portion of long-term debt as of March 31, 2024.

We expect that the holders of the 2024 Exchangeable Notes will exchange their 2024 Exchangeable Notes for shares.

The following is a summary of NCLC’s exchangeable notes as of December 31, 2023 (in thousands):

5 unchanged sentences

(1) Classified within current portion of long-term debt as of December 31, 2023.

We expect that the holders of the 2024 Exchangeable Notes will exchange their 2024 Exchangeable Notes for shares.

During the three and six months ended June 30, 2024, substantially all the holders of 2024 Exchangeable Notes elected to exchange their 2024 Exchangeable Notes for 10,658,607 shares and the remaining unexchanged notes were repaid in cash at maturity.

The following provides a summary of the interest expense of NCLC’s exchangeable notes (in thousands):

Three Months Ended

Six Months Ended

Coupon interest

Amortization of deferred financing fees

As of March 31, 2024, the effective interest rate is 7.04 %, 5.97 %, 1.64 % and 3.06 % for the 2024 Exchangeable Notes, 2025 Exchangeable Notes, 2027 1.125% Exchangeable Notes and 2027 2.5% Exchangeable Notes, respectively.

As of June 30, 2024, the effective interest rate is 5.97 %, 1.64 % and 3.06 % for the 2025 Exchangeable Notes, 2027 1.125% Exchangeable Notes and 2027 2.5% Exchangeable Notes, respectively.

Debt Repayments

The following are scheduled principal repayments on our long-term debt including exchangeable notes, which can be settled in shares, and finance lease obligations as of March 31, 2024 (in thousands):

The following are scheduled principal repayments on our long-term debt including exchangeable notes, which can be settled in shares, and finance lease obligations as of June 30, 2024 (in thousands):

Remainder of 2024

Debt Covenants

As of March 31, 2024, we were in compliance with all of our debt covenants.

As of June 30, 2024, we were in compliance with all of our debt covenants.

If we do not continue to remain in compliance with our covenants, we would have to seek additional amendments to or waivers of our covenants.

14 unchanged sentences

We attempt to minimize these risks through a combination of our normal operating and financing activities and through the use of derivatives.

We assess whether derivatives used in hedging transactions are “highly effective” in offsetting changes in the cash flow of our hedged forecasted transactions.

We assess whether derivatives used in hedging transactions are “highly effective” in offsetting

changes in the cash flow of our hedged forecasted transactions.

We use critical terms match or regression analysis for hedge relationships and high effectiveness is achieved when a statistically valid relationship reflects a high degree of offset and correlation between the fair values of the derivative and the hedged forecasted transaction.

5 unchanged sentences

We do not anticipate non-performance by any of our significant counterparties.

As of March 31, 2024, we had fuel swaps, which are used to mitigate the financial impact of volatility of fuel prices pertaining to approximately 630 thousand metric tons of our projected fuel purchases, maturing through December 31, 2025 .

As of March 31, 2024, we had fuel swaps pertaining to approximately 4 thousand metric tons of our projected fuel purchases which were not designated as cash flow hedges maturing through December 31, 2024 .

As of June 30, 2024, we had fuel swaps, which are used to mitigate the financial impact of volatility of fuel prices pertaining to approximately 704 thousand metric tons of our projected fuel purchases, maturing through December 31, 2025 .

As of June 30, 2024, we had fuel swaps pertaining to approximately 4 thousand metric tons of our projected fuel purchases which were not designated as cash flow hedges maturing through February 28, 2025 .

As of June 30, 2024, we had foreign currency forward contracts, which are used to mitigate the financial impact of volatility in foreign currency exchange rates related to our ship construction contracts denominated in euros.

The notional amount of our hedged foreign currency forward contracts was € 54.3 million, or $ 58.2 million based on the euro/U.S.

dollar exchange rate as of June 30, 2024.

The derivatives measured at fair value and the respective location in the consolidated balance sheets include the following (in thousands):

6 unchanged sentences

Other long-term liabilities

Foreign currency contracts

Prepaid expenses and other assets

Total derivatives designated as hedging instruments

10 unchanged sentences

The inputs to this option pricing model are the option strike price, underlying price, risk-free rate of interest, time to expiration, and volatility.

The fair value of option contracts considers both the intrinsic value and any remaining time value associated with those derivatives that have not yet settled.

fair value of option contracts considers both the intrinsic value and any remaining time value associated with those derivatives that have not yet settled.

The Company also considers counterparty credit risk and its own credit risk in its determination of all estimated fair values.

4 unchanged sentences

The following table discloses the gross and net amounts recognized within assets and liabilities (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

13 unchanged sentences

(Loss) into Income (Expense)

March 31, 2024

March 31, 2023

March 31, 2024

March 31, 2023

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Fuel contracts

4 unchanged sentences

Total gain (loss) recognized in other comprehensive loss

Location of Gain

(Loss) Reclassified

from Accumulated

Amount of Gain (Loss) Reclassified

Amount of Gain (Loss)

Other Comprehensive

from Accumulated Other

Recognized in Other

Income (Loss) into

Comprehensive Income

Comprehensive Loss

Income (Expense)

(Loss) into Income (Expense)

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Fuel contracts

Other income (expense), net

Foreign currency contracts

Depreciation and amortization

Total gain (loss) recognized in other comprehensive loss

The effects of cash flow hedge accounting on the consolidated statements of operations include the following (in thousands):

Three Months Ended March 31, 2024

Three Months Ended March 31, 2023

Three Months Ended June 30, 2024

Three Months Ended June 30, 2023

( Expense), net

6 unchanged sentences

Fuel contracts

Six Months Ended June 30, 2024

Six Months Ended June 30, 2023

( Expense), net

Total amounts of income and expense line items presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded

Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (expense)

Fuel contracts

Foreign currency contracts

Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (expense) as a result that a forecasted transaction is no longer probable of occurring

Fuel contracts

The effects of derivatives not designated as hedging instruments on the consolidated statements of operations include the following (in thousands):

Amount of Gain (Loss) Recognized in Income

Three Months Ended

Six Months Ended

Location of Gain (Loss)

3 unchanged sentences

Long-Term Debt

As of March 31, 2024 and December 31, 2023, the fair value of our long-term debt, including the current portion, was $ 13.3 billion and $ 13.5 billion, respectively, which was $ 0.8 billion and $ 0.9 billion lower, respectively, than the carrying values, excluding deferred financing costs.

The difference between the fair value and carrying value of our long-term debt is due to our fixed and variable rate debt obligations carrying interest rates that are above or below market rates at the measurement dates.

As of June 30, 2024 and December 31, 2023, the fair value of our long-term debt, including the current portion, was $ 13.0 billion and $ 13.5 billion, respectively, which was $ 0.8 billion and $ 0.9 billion lower, respectively, than the carrying values, excluding deferred financing costs.

The difference between the fair value and carrying value of our long-term debt is due to our fixed and variable rate debt obligations carrying interest rates that are above or below

market rates at the measurement dates.

The fair value of our long-term revolving and term loan facilities was calculated based on estimated rates for the same or similar instruments with similar terms and remaining maturities.

6 unchanged sentences

Employee Benefits and Compensation Plans

In January 2013, NCLH adopted the 2013 Performance Incentive Plan, which as amended and restated through 2023 (the “Restated 2013 Plan”), provided for a maximum aggregate limit of 42,009,006 shares that could have been delivered pursuant to all awards granted under the plan.

In June 2024, NCLH’s shareholders approved a further amendment and restatement of the Restated 2013 Plan to increase the number of NCLH ordinary shares that may be delivered by 3,000,000 , resulting in an increase in the maximum aggregate limit to 45,009,006 shares.

Restricted Share Unit Awards

1 unchanged sentence

Additionally, in March 2024, NCLH granted 0.9 million performance-based restricted share units to certain members of our management team, which vest upon the achievement of certain pre-established performance targets established through 2026 and the satisfaction of an additional time-based vesting requirement that generally requires continued employment through March 1, 2027.

The following is a summary of restricted share unit activity for the three months ended March 31, 2024:

The following is a summary of restricted share unit activity for the six months ended June 30, 2024:

Average Grant

5 unchanged sentences

Forfeited or expired

Non-vested as of March 31, 2024

Non-vested as of June 30, 2024

Share Option Awards

The following table sets forth a summary of option activity under NCLH’s Restated 2013 Plan for the six months ended June 30, 2024:

Number of Share Option Awards

Weighted-Average Exercise Price

(in thousands)

Outstanding as of January 1, 2024

Forfeited and cancelled

( 1,011,038 )

Outstanding as of June 30, 2024

The compensation expense recognized for share-based compensation for the periods presented include the following (in thousands):

Three Months Ended

Six Months Ended

Payroll and related expense

3 unchanged sentences

Ship Construction Contracts

As of March 31, 2024, for the Norwegian brand, we had four Prima Class Ships on order, each ranging from approximately 156,000 to 169,000 Gross Tons with 3,550 to 3,850 Berths, with currently scheduled delivery dates from 2025 through 2028.

As of March 31, 2024, for the Oceania Cruises brand, we had an order for one additional Allura Class Ship to be delivered in 2025, which will be approximately 68,000 Gross Tons and 1,250 Berths.

Subsequent to March 31, 2024, we announced anticipated additional newbuilds for our fleet.

For the Norwegian brand, we have four Prima Class Ships on order, each ranging from approximately 156,000 to 169,000 Gross Tons with 3,550 to 3,850 Berths, with currently scheduled delivery dates from 2025 through 2028.

For the Oceania Cruises brand, we have an order for one additional Allura Class Ship to be delivered in 2025, which will be approximately 68,000 Gross Tons and 1,250 Berths.

For the Oceania Cruises brand, we also have an order for four additional ships (which includes two ships on order, which are currently scheduled for delivery in 2030 and 2031, respectively, but are expected to be cancelled), each at approximately 86,000 Gross Tons and 1,450 Berths, with scheduled delivery dates from 2027 through 2031.

For the Regent Seven Seas Cruises brand, we have an order for two Prestige Class Ships, each at approximately 77,000 Gross Tons and 850 Berths, with scheduled delivery dates in 2026 and 2029.

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.

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

The combined contract prices, including amendments and change orders, of the five ships on order for delivery as of March 31, 2024 was approximately € 5.8 billion, or $ 6.3 billion based on the euro/U.S.

dollar exchange rate as of March 31, 2024.

The combined contract prices of the six new ships with contracts that became effective subsequent to March 31, 2024 (which includes two ships on order for Oceania Cruises, which were scheduled for delivery in 2030 and 2031, respectively, but are expected to be cancelled, and excludes orders for four Norwegian Cruise Line ships, which are not yet effective) was approximately € 5.3 billion, or $ 5.7 billion based on the euro/U.S.

dollar exchange rate as of March 31, 2024.

The combined contract prices, including amendments and change orders, of the 11 ships on order for delivery as of June 30, 2024 (which includes two ships on order for Oceania Cruises, which are currently scheduled for delivery in 2030 and 2031, respectively, but are expected to be cancelled, and excludes orders for four Norwegian Cruise Line ships, which were not effective as of June 30 ,2024) was approximately € 11.0 billion, or $ 11.8 billion based on the euro/U.S.

dollar exchange rate as of June 30, 2024.

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.

For ships on order as of March 31, 2024 and for four of the six ships effective subsequent to March 31, 2024, 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.

We do not anticipate any contractual breaches or cancellations to occur, except

as noted above.

For ships on order, excluding the two ships on order for Oceania Cruises that are expected to be cancelled, 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.

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

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.

Taking into account the six new ship orders with contracts that became effective subsequent to March 31, 2024 (which includes two ships on order for Oceania Cruises that are expected to be cancelled, and excludes orders for four Norwegian Cruise Line ships, which are not yet effective), our minimum annual payments for ship construction contracts, which include non-cancelable contracts or contracts that are cancelable when a replacement agreement is signed with the same party, are as follows (in thousands):

Our minimum annual payments for ship construction contracts, which include non-cancelable contracts or contracts that are cancelable when a replacement agreement is signed with the same party, are as follows (in thousands):

Remainder of 2024

Total minimum annual payments

The above presentation reflects the contractual delivery date in the fourth quarter of 2028 of the second Oceania Cruises ship announced subsequent to March 31, 2024.

The above presentation reflects the contractual delivery date in the fourth quarter of 2028 of the second new Oceania Cruises ship.

However, it is expected that this delivery date may be moved to early 2029.

18 unchanged sentences

On September 29, 2023, the plaintiff filed its answering brief responding to the Company’s opening brief in the Eleventh Circuit.

The Court has scheduled oral argument on the matter for May 17,

On May 17, 2024, the Court heard oral argument on the matter.

We believe that the likelihood of loss related to this matter is reasonably possible but not probable at this time;

12 unchanged sentences

Other Contingencies

The Company also has agreements with its credit card processors that govern approximately $ 3.4 billion in advance ticket sales at March 31, 2024 that have been received by the Company relating to future voyages.

The Company also has agreements with its credit card processors that govern approximately $ 3.5 billion in advance ticket sales at June 30, 2024 that have 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.

1 unchanged sentence

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

As of March 31, 2024, we had cash reserves of approximately $ 51.3 million with credit card processors, which includes approximately $ 19.8 million recognized in accounts receivable, net and approximately $ 31.5 million recognized in other long-term assets.

As of June 30, 2024, we had cash reserves of approximately $ 43.9 million with credit card processors, which includes approximately $ 12.4 million recognized in accounts receivable, net and approximately $ 31.5 million recognized in other long-term assets.

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.

Other Income (Expense), Net

For the three months ended March 31, 2024 and 2023, other income (expense), net consisted of income of $ 18.1 million and expense of $ 9.0 million, respectively, primarily due to net gains and losses on foreign currency remeasurements.

For the three and six months ended June 30, 2024, other income (expense), net consisted of income of $ 1.9 million and $ 20.0 million, respectively, and for the three and six months ended June 30, 2023, other income (expense), net consisted of expense of $ 8.0 million and $ 17.0 million, respectively, primarily due to net gains and losses on foreign currency remeasurements.

Supplemental Cash Flow Information

For the three months ended March 31, 2024 and 2023, we had non-cash investing activities consisting of changes in accruals related to property and equipment of $ 11.3 million and $ 53.4 million, respectively.

For the six months ended June 30, 2024 and 2023, we had non-cash investing activities consisting of changes in accruals related to property and equipment of $ 36.3 million and $ 49.4 million, respectively.

Subsequent event

In July 2024, the Company entered into a memorandum of agreement regarding the order for the four additional ships for Norwegian Cruise Line that is subject to Board of Director approval in early August.

If approved, the aggregate cost of all ships on order (which includes two ships on order for Oceania Cruises, which are currently scheduled for delivery in 2030 and 2031, respectively, but are expected to be cancelled), will be approximately € 19.3 billion, or $ 20.7 billion based on the euro/U.S.

dollar exchange rate as of June 30, 2024.

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-Q

Item 1. Financial Statements