What changed in this filing

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Item 1. Financial Statements

2024-11-07 compared with 2024-08-08 · 146 added, 130 removed, 465 unchanged (37% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Passenger ticket

15 unchanged sentences

Total non-operating income (expense)

Net income (loss) before income taxes

Net income before income taxes

Income tax benefit (expense)

Net income (loss)

Weighted-average shares outstanding

Earnings (loss) per share

Earnings per share

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

Norwegian Cruise Line Holdings Ltd.

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive Income

(in thousands)

Three Months Ended

Six Months Ended

Net income (loss)

Nine Months Ended

September 30,

Other comprehensive income (loss):

4 unchanged sentences

Total other comprehensive income (loss)

Total comprehensive income (loss)

Total comprehensive income

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

2 unchanged sentences

(in thousands, except share data)

September 30,

Current assets:

19 unchanged sentences

980,000,000 shares authorized;

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

439,702,246 shares issued and outstanding at September 30, 2024 and 425,546,570 shares issued and outstanding at December 31, 2023

Additional paid-in capital

9 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization expense

14 unchanged sentences

Additions to property and equipment, net

( 2,102,698 )

Cash paid on settlement of derivatives

1 unchanged sentence

Net cash used in investing activities

( 2,206,630 )

Cash flows from financing activities

1 unchanged sentence

( 1,268,605 )

( 2,629,681 )

Proceeds from long-term debt

3 unchanged sentences

Deferred financing fees

Net cash used in financing activities

Net increase (decrease) in cash and cash equivalents

Net cash provided by (used in) financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

2 unchanged sentences

Norwegian Cruise Line Holdings Ltd.

Consolidated Statements of Changes in Shareholders’ Equity (Deficit)

Consolidated Statements of Changes in Shareholders’ Equity

(in thousands)

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Comprehensive

1 unchanged sentence

Income (Loss)

Balance, March 31, 2024

Balance, June 30, 2024

( 6,719,348 )

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

Balance, September 30, 2024

( 6,244,416 )

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Comprehensive

7 unchanged sentences

Net share settlement of restricted share units

Other comprehensive income, net

Balance, June 30, 2024

Other comprehensive loss, net

Balance, September 30, 2024

( 6,244,416 )

1 unchanged sentence

Norwegian Cruise Line Holdings Ltd.

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

Consolidated Statements of Changes in Shareholders’ Equity - Continued

(in thousands)

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Comprehensive

1 unchanged sentence

Income (Loss)

Equity (Deficit)

Balance, March 31, 2023

Balance, June 30, 2023

( 7,139,520 )

2 unchanged sentences

Net share settlement of restricted share units

Other comprehensive loss, net

Balance, June 30, 2023

Common share issuance for NCLC exchangeable notes

Other comprehensive income, net

Balance, September 30, 2023

( 6,793,652 )

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Comprehensive

5 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 loss, net

Balance, June 30, 2023

Other comprehensive income, net

Balance, September 30, 2023

( 6,793,652 )

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

As of September 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.

1 unchanged sentence

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.

We also have orders for three new classes of ships:

four Oceania Cruises ships with deliveries currently scheduled from 2027 through 2031, two Prestige Class Ships with deliveries currently scheduled in 2026 and 2029 and four Norwegian Cruise Line ships with deliveries currently scheduled from 2030 through 2036.

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.

Summary of Significant Accounting Policies

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).

As of September 30, 2024, we had liquidity of approximately $ 2.4 billion, including cash and cash equivalents of $ 332.5 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.

5 unchanged sentences

The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2023, which are included in our most recent Annual Report on Form 10-K filed with the SEC on February 28, 2024.

Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net income (loss) by the basic weighted-average number of shares outstanding during each period.

Diluted earnings (loss) per share is computed by dividing net income (loss) and assumed conversion of exchangeable notes by diluted weighted-average shares outstanding.

A reconciliation between basic and diluted earnings (loss) per share was as follows (in thousands, except share and per share data):

Earnings Per Share

Basic earnings per share is computed by dividing net income by the basic weighted-average number of shares outstanding during each period.

Diluted earnings per share is computed by dividing net income and assumed conversion of exchangeable notes by diluted weighted-average shares outstanding.

A reconciliation between basic and diluted earnings per share was as follows (in thousands, except share and per share data):

Three Months Ended

Six Months Ended

Net income (loss) - Basic EPS

Nine Months Ended

September 30,

Net income - Basic EPS

Effect of dilutive securities - exchangeable notes

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

Net income and assumed conversion of exchangeable notes - Diluted EPS

Basic weighted-average shares outstanding

4 unchanged sentences

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 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.

During the nine months ended September 30, 2023, the 2024 Exchangeable Notes, 2025 Exchangeable Notes and 2027 2.5% Exchangeable Notes were 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 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.

For the three months ended September 30, 2024 and 2023, a total of 2.5 million and 3.8 million shares, respectively, and for the nine months ended September 30, 2024 and 2023, a total of 6.1 million and 54.4 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 $ 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.

We recognized a loss of $ 32.1 million and a gain of $ 15.7 million for the three months ended September 30, 2024 and 2023, respectively, and losses of $ 16.5 million and $ 4.2 million for the nine months ended September 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 $ 12.4 million and $ 20.1 million due from credit card processors as of June 30, 2024 and December 31, 2023, respectively.

Accounts receivable, net included $ 4.9 million and $ 20.1 million due from credit card processors as of September 30, 2024 and December 31, 2023, respectively.

Recently Issued Accounting Guidance

5 unchanged sentences

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.

We do not expect the adoption of ASU 2023-07 to have a material impact on our consolidated financial statements other than the expanded footnote disclosure.

In December 2023, the FASB issued ASU No.

9 unchanged sentences

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.

As of September 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;

6 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

North America

11 unchanged sentences

Receivables from customers are included within accounts receivable, net.

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.

As of September 30, 2024 and December 31, 2023, our receivables from customers were $ 107.0 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 $ 63.2 million.

2 unchanged sentences

Our contract liabilities are included within advance ticket sales.

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.

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

Of the amounts included within contract liabilities as of September 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 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.

For the nine months ended September 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

June 30, 2024

September 30, 2024

December 31, 2023

7 unchanged sentences

Accumulated Other Comprehensive Income (Loss)

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

Six Months Ended June 30, 2024

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

Nine Months Ended September 30, 2024

Comprehensive

1 unchanged sentence

Accumulated other comprehensive income (loss) at beginning of period

Current period other comprehensive income before reclassifications

Current period other comprehensive loss before reclassifications

Amounts reclassified into earnings

Accumulated other comprehensive income (loss) at end of period

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

Six Months Ended June 30, 2023

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

Nine Months Ended September 30, 2023

Comprehensive

1 unchanged sentence

Accumulated other comprehensive income (loss) at beginning of period

Current period other comprehensive loss before reclassifications

Current period other comprehensive income before reclassifications

Amounts reclassified into earnings

2 unchanged sentences

(2) Amortization of prior-service cost and actuarial loss reclassified to other income (expense), net.

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

(3) Includes $ 43.9 million of losses 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.

Property and equipment, net increased $ 310.6 million for the nine months ended September 30, 2024 primarily due to ships under construction.

Long-Term Debt

3 unchanged sentences

If issued, the Commitment Notes will be subject to an issue fee of 0.50 % and will bear interest at a rate per annum equal to (A) the greater of (i) the interest rate of the 7.75 % senior notes due 2029 (“2029 Unsecured Notes”) and (ii) the then-current secondary trading yield applicable to the 2029 Unsecured Notes plus (B) 200 basis points .

The Commitment Notes are subject to a one-time structuring fee of 0.50 % and a quarterly commitment fee of 0.75 % for so long as the commitments with respect to the Commitment Notes are outstanding.

The Commitment Notes are

subject to a one-time structuring fee of 0.50 % and a quarterly commitment fee of 0.75 % for so long as the commitments with respect to the Commitment Notes are outstanding.

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 (the “2028 Secured Notes”) at a negotiated premium plus accrued and unpaid interest thereon.

5 unchanged sentences

Any amount repaid prior to July 15, 2025 may be drawn again.

In September 2024, NCLC issued $ 315.0 million aggregate principal amount of 6.250 % senior unsecured notes due March 1, 2030 (the “2030 Notes”).

NCLC may, at its option, redeem the 2030 Notes, in whole or in part, (i) prior to March 1, 2027 (the “First Call Date”), at a redemption price equal to 100 % of the principal amount of the 2030 Notes to be redeemed plus an applicable “make-whole” amount, plus accrued and unpaid interest and additional amounts, if any, to, but excluding, the redemption date, and (ii) on or after the First Call Date, at the redemption prices set forth in the 2030 Notes indenture, plus accrued and unpaid interest and additional amounts, if any, to, but excluding, the redemption date.

In addition, at any time and from time to time prior to the First Call Date, NCLC may redeem up to 40 % of the aggregate principal amount of the 2030 Notes with the net proceeds of certain equity offerings at a redemption price equal to 106.250 % of the principal amount of the 2030 Notes redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, so long as at least 60 % of the aggregate principal amount of the 2030 Notes issued remains outstanding following such redemption.

The 2030 Notes pay interest at 6.250 % per annum, semiannually in arrears on March 1 and September 1 of each year, to holders of record at the close of business on the immediately preceding February 15 and August 15, respectively.

The 2030 Notes indenture contains covenants that limit the ability of NCLC and its restricted subsidiaries to, among other things:

(i) grant or assume certain liens;

(ii) enter into sale leaseback transactions;

and (iii) consolidate, merge, sell or otherwise dispose of all or substantially all of their assets.

The net proceeds for the 2030 Notes, after deducting the initial purchasers’ discount but before deducting estimated fees and expenses, together with cash on hand, were used to redeem $ 315.0 million aggregate principal amount of the 3.625 % senior notes due 2024, including to pay any accrued and unpaid interest thereon.

Exchangeable Notes

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

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

Financing Fees

8 unchanged sentences

2027 2.5% Exchangeable Notes

(1) Classified within current portion of long-term debt as of September 30, 2024.

We expect that the holders of the 2025 Exchangeable Notes will exchange their 2025 Exchangeable Notes for NCLH ordinary shares.

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

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.

During the nine months ended September 30, 2024, substantially all the holders of 2024 Exchangeable Notes elected to exchange their 2024 Exchangeable Notes for 10,658,607 NCLH ordinary 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

Nine Months Ended

September 30,

Coupon interest

Amortization of deferred financing fees

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.

As of September 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 June 30, 2024 (in thousands):

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

Remainder of 2024

Debt Covenants

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

As of September 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 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.

As of September 30, 2024, we had fuel swaps, which are used to mitigate the financial impact of volatility of fuel prices pertaining to approximately 846 thousand metric tons of our projected fuel purchases, maturing through December 31, 2026 .

As of September 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 .

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

September 30,

Balance Sheet Location

1 unchanged sentence

Fuel contracts

Prepaid expenses and other assets

Other long-term assets

Accrued expenses and other liabilities

Other long-term liabilities

Foreign currency contracts

Prepaid expenses and other assets

Total derivatives designated as hedging instruments

1 unchanged sentence

Fuel contracts

Prepaid expenses and other assets

Accrued expenses and other liabilities

6 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.

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 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):

June 30, 2024

September 30, 2024

December 31, 2023

13 unchanged sentences

(Loss) into Income (Expense)

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

Fuel contracts

17 unchanged sentences

(Loss) into Income (Expense)

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

Fuel contracts

5 unchanged sentences

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

Three Months Ended June 30, 2024

Three Months Ended June 30, 2023

Three Months Ended September 30, 2024

Three Months Ended September 30, 2023

( Expense), net

6 unchanged sentences

Fuel contracts

Six Months Ended June 30, 2024

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2024

Nine Months Ended September 30, 2023

( Expense), net

9 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Location of Gain (Loss)

3 unchanged sentences

Long-Term Debt

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.

As of September 30, 2024 and December 31, 2023, the fair value of our long-term debt, including the current portion, was $ 13.2 billion and $ 13.5 billion, respectively, which was $ 0.5 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.

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 NCLH ordinary shares that could have been delivered pursuant to all awards granted under the plan.

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 six months ended June 30, 2024:

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

Average Grant

5 unchanged sentences

Forfeited or expired

Non-vested as of June 30, 2024

Non-vested as of September 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:

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

Number of Share Option Awards

4 unchanged sentences

( 1,057,038 )

Outstanding as of June 30, 2024

Outstanding as of September 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

Nine Months Ended

September 30,

Payroll and related expense

4 unchanged sentences

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 Norwegian brand, we also have an order for four additional ships, each at approximately 225,000 Gross Tons and 5,200 Berths, with currently scheduled delivery dates from 2030 through 2036.

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.

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, but are expected to be cancelled), each at approximately 86,000 Gross Tons and 1,450 Berths, with currently 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 currently 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 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.

The combined contract prices, including amendments and change orders, of the 13 ships on order for delivery as of September 30, 2024 (which excludes two ships on order for Oceania Cruises, which are currently scheduled for delivery in 2030 and 2031, but are expected to be cancelled) was approximately € 17.5 billion, or $ 19.5 billion based on the euro/U.S.

dollar exchange rate as of September 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, 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.

For ships on order, excluding the two ships on order for Oceania Cruises that are expected to be cancelled and the four additional ships on order for Norwegian Cruise Line with currently scheduled delivery from 2030 to 2036, 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.

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 non-cancelable ship construction contracts, which exclude two contracts with options to cancel, 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 new Oceania Cruises ship.

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

The above presentation reflects the current delivery dates;

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

Investigations

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

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

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

On October 22, 2024, the Eleventh Circuit reversed the trial court.

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

therefore, no liability has been recorded.

The ability to make such estimates and judgments can be affected by various factors including, among other things:

lack of legal precedent, stage of the proceedings, legal uncertainties inherent within the litigation process, the availability of appellate remedies, and involvement of numerous parties.

We continue to believe we have meritorious defenses to the Havana Docks Matter.

However, if the plaintiff prevails in the final outcome of this matter, there may be a material adverse impact on the Company’s financial condition, results of operations and/or cash flows.

In the normal course of our business, various other claims and lawsuits have been filed or are pending against us.

Most of these claims and lawsuits are covered by insurance and, accordingly, the maximum amount of our liability is typically limited to our deductible amount.

Nonetheless, the ultimate outcome of these claims and lawsuits that are not covered by insurance cannot be determined at this time.

Nonetheless, the ultimate outcome of these claims and lawsuits that are not covered by

insurance cannot be determined at this time.

We have evaluated our overall exposure with respect to all of our threatened and pending litigation and, to the extent required, we have accrued amounts for all estimable probable losses associated with our deemed exposure.

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Other Contingencies

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.

The Company also has agreements with its credit card processors that govern approximately $ 2.9 billion in advance ticket sales at September 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.

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

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.

As of September 30, 2024, we had cash reserves of approximately $ 4.9 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 three months ended September 30 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.

Other Income (Expense), Net

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.

For the three and nine months ended September 30, 2024, other income (expense), net consisted of expense of $ 34.1 million and $ 14.1 million, respectively, and for the three and nine months ended September 30, 2023, other income (expense), net consisted of income of $ 12.1 million and expense of $ 4.9 million, respectively, primarily due to net gains and losses on foreign currency remeasurements.

Supplemental Cash Flow Information

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.

For the nine months ended September 30, 2024 and 2023, we had non-cash investing activities consisting of changes in accruals related to property and equipment of $ 6.6 million and $ 57.0 million, respectively.

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