What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-11-07 compared with 2024-08-08 · 105 added, 89 removed, 334 unchanged (37% of the section changed)

3 unchanged sentences

federal securities laws intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995.

All statements other than statements of historical facts contained, or incorporated by reference, in this report, including, without limitation, our expectations regarding our future financial position, including our liquidity requirements and future capital expenditures, plans, prospects, actions taken or strategies being considered with respect to our liquidity position, including with respect to refinancing, amending the terms of, or extending the maturity of our indebtedness, our ability to comply with covenants under our debt agreements, expectations regarding our exchangeable notes, valuation and appraisals of our assets, expected fleet additions and cancellations, including expected timing thereof, our expectations regarding the impact of macroeconomic conditions and recent global events, and expectations relating to our sustainability program and decarbonization efforts may be forward-looking statements.

All statements other than statements of historical facts contained, or incorporated by reference, in this report, including, without limitation, our expectations regarding our future financial position, including our liquidity requirements and future capital expenditures, plans, prospects, actions taken or strategies being considered with respect to our liquidity position, including with respect to refinancing, amending the terms of, or extending the maturity of our indebtedness, our ability to comply with covenants under our debt agreements, expectations regarding our exchangeable notes, valuation and appraisals of our assets, expectations regarding our deferred tax assets, expected fleet additions and cancellations, including expected timing thereof, our expectations regarding the impact of macroeconomic conditions and recent global events, and expectations relating to our sustainability program and decarbonization efforts may be forward-looking statements.

Many, but not all, of these statements can be found by looking for words like “expect,” “anticipate,” “goal,” “project,” “plan,” “believe,” “seek,” “will,” “may,” “forecast,” “estimate,” “intend,” “future” and similar words.

13 unchanged sentences

● adverse events impacting the security of travel, or customer perceptions of the security of travel, such as terrorist acts, armed conflict, such as Russia’s invasion of Ukraine or the Israel-Hamas war, or threats thereof, acts of piracy, and other international events;

● public health crises, including the COVID-19 pandemic, and their effect on the ability or desire of people to travel (including on cruises);

● public health crises and their effect on the ability or desire of people to travel (including on cruises);

● adverse incidents involving cruise ships;

16 unchanged sentences

The above examples are not exhaustive and new risks emerge from time to time.

There may be additional risks that we consider immaterial or which are unknown.

Such forward-looking statements are based on our current beliefs, assumptions, expectations, estimates and projections regarding our present and future business strategies and the environment in which we expect to operate in the future.

These forward-looking statements speak only as of the date made.

There may be additional risks that we currently consider immaterial or which are unknown.

Such forward-looking statements are based on our current beliefs,

assumptions, expectations, estimates and projections regarding our present and future business strategies and the environment in which we expect to operate in the future.

You are cautioned not to place undue reliance on the forward-looking statements included in this report, which speak only as of the date made.

We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in our expectations with regard thereto or any change of events, conditions or circumstances on which any such statement was based, except as required by law.

26 unchanged sentences

● Adjusted Net Income.

Net income (loss) adjusted for the effect of dilutive securities and other supplemental adjustments.

Net income adjusted for the effect of dilutive securities and other supplemental adjustments.

● Allura Class Ships .

5 unchanged sentences

Earnings before interest, taxes, and depreciation and amortization.

Earnings (loss) per share.

Earnings per share.

Generally accepted accounting principles in the U.S.

16 unchanged sentences

● Prima Class Ships.

Norwegian Prima, Norwegian Viva, Norwegian Aqua and three additional ships on order.

Norwegian Prima, Norwegian Viva, Norwegian Aqua, Norwegian Luna and two additional ships on order.

● Revolving Loan Facility.

6 unchanged sentences

See “Terminology” for the definitions of these and other non-GAAP financial measures.

We utilize Adjusted Gross Margin and Net Yield to manage our business on a day-to-day basis because they reflect revenue earned net of certain direct variable costs.

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 net income (loss), 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 utilize Adjusted Gross Margin and Net Yield to manage our business on a day-to-day basis because they reflect revenue earned

net of certain direct variable costs.

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 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.

1 unchanged sentence

In addition, management uses Adjusted EBITDA as a performance measure for our incentive compensation.

Adjusted EBITDA is not a defined term under GAAP nor is it intended to be a measure of liquidity or cash flows from operations or a measure comparable to net income (loss), as it does not take into account certain requirements such as capital expenditures and related depreciation, principal and interest payments and tax payments and it includes other supplemental adjustments.

In addition, Adjusted Net Income and Adjusted EPS are non-GAAP financial measures that exclude certain amounts and are used to supplement GAAP net income (loss) and EPS.

Adjusted EBITDA is not a defined term under GAAP nor is it intended to be a measure of liquidity or cash flows from operations or a measure comparable to net income, as it does not take into account certain requirements such as capital expenditures and related depreciation, principal and interest payments and tax payments and it includes other supplemental adjustments.

In addition, Adjusted Net Income and Adjusted EPS are non-GAAP financial measures that exclude certain amounts and are used to supplement GAAP net income and EPS.

We use Adjusted Net Income and Adjusted EPS as key performance measures of our earnings performance.

34 unchanged sentences

Contemporaneously, the ship orders became effective.

The Norwegian brand also expects a four-ship order to replace a separate, effective, two-ship order for Oceania Cruises initially placed to secure availability with the shipyard.

The four-ship order for Norwegian is still being finalized and is subject to financing.

The Norwegian brand also placed a four-ship order, for which the shipbuilding contracts and financing are 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.

1 unchanged sentence

See Note 8 – “Long-Term Debt” for more information.

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

The net proceeds, 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.

See Note 8 – “Long-Term Debt” for more information.

Deferred Tax Asset Valuation Allowance

The Company maintains a full valuation allowance against the net deferred tax assets mainly in the U.S.

and Bermuda jurisdictions.

Given our current earnings, anticipated future earnings and outlook of the cruise industry as a whole, we believe there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become available to allow us to reach a conclusion that a portion or all of our U.S.

valuation allowance would no longer be required.

A release of the valuation allowance would result in recognition of certain deferred tax assets and a decrease in income tax expense in the period the release is recorded.

However, the timing and amount of the valuation allowance release, if any, are unknown as this is subject to change on the basis of the level of profitability that we are able to actually achieve in future periods.

Update on Bookings

The Company continues to experience strong consumer demand as the majority of new bookings are pivoting to 2025 sailings.

The Company continues to experience strong consumer demand as the majority of new bookings have shifted to 2025 sailings.

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

Macroeconomic Trends and Uncertainties

As a result of conditions associated with global macroeconomic events, the global economy, including the financial and credit markets, has experienced volatility and disruptions, including impacts to inflation rates, fuel prices, foreign currencies and interest rates.

Our costs have been and may be adversely impacted by these factors.

We have used, and may continue to use, derivative instruments to attempt to mitigate the risk of volatility in fuel prices, foreign exchange rates and interest rates.

In an attempt to mitigate risks related to inflation, our supply chain department has negotiated

contracts with varying terms, with a goal of providing us with the ability to take advantage of cost declines when they occur, and diversified our sourcing options.

These strategies may not fully offset the impact of current macroeconomic conditions;

however, during 2024, we continued to see progress from our ongoing margin enhancement initiative.

Margin Enhancement Initiative

During 2024, we continued to see progress 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 that have not been hedged.

2 unchanged sentences

Climate Change

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

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 may include expenses related to greenhouse gas emissions reduction initiatives, including modifications to our ships, and will include the purchase of emissions allowances, among other things.

We have and may continue to be required to change certain operating procedures, for example slowing the speed of our ships, to meet regulatory requirements, which could adversely impact our operations.

We have changed and may continue to be required to change certain operating procedures, for example slowing the speed of our ships, to meet regulatory requirements, which could adversely impact our operations.

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 greenhouse gas emissions;

5 unchanged sentences

Quarterly Overview

Three months ended June 30, 2024 (“2024”) compared to three months ended June 30, 2023 (“2023”)

Three months ended September 30, 2024 (“2024”) compared to three months ended September 30, 2023 (“2023”)

● Total revenue increased 10.7% to $2.8 billion compared to $2.5 billion.

1 unchanged sentence

● Operating income was $691.2 million compared to $523.3 million.

● Gross margin increased 11.4% to $711.4 million compared to $638.4 million.

● Gross margin increased 23.4% to $1.1 billion compared to $862.7 million.

Adjusted Gross Margin increased 12.7% to $2.0 billion compared to $1.8 billion.

6 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Passengers carried

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Total revenue

8 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Total cruise operating expense

18 unchanged sentences

Three Months Ended

Six Months Ended

Net income (loss)

Nine Months Ended

September 30,

Effect of dilutive securities - exchangeable notes

Net income (loss) and assumed conversion of exchangeable notes

Net income and assumed conversion of exchangeable notes

Non-GAAP Adjustments:

3 unchanged sentences

Adjusted Net Income

Diluted weighted-average shares outstanding - Net income (loss) and Adjusted Net Income

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

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

3 unchanged sentences

Three Months Ended

Six Months Ended

Net income (loss)

Nine Months Ended

September 30,

Interest expense, net

9 unchanged sentences

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

Three months ended June 30, 2024 (“2024”) compared to three months ended June 30, 2023 (“2023”)

Total revenue increased to $2.4 billion in 2024 compared to $2.2 billion in 2023 primarily due to an increase in Capacity Days and improved pricing.

Gross margin increased 11.4% and Adjusted Gross Margin increased 10.6% to $1.7 billion

in 2024 compared to $1.5 billion in 2023 due to an increase in Capacity Days of 4.0% and reflects 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 5.1% and Gross Cruise Cost increased 4.2% 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 4.9% in 2024 compared to 2023 primarily related to an increase in depreciation expense from the delivery of three new ships in 2023.

Three months ended September 30, 2024 (“2024”) compared to three months ended September 30, 2023 (“2023”)

Total revenue increased to $2.8 billion in 2024 compared to $2.5 billion in 2023 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 two new ships in the second half of 2023.

Total cruise operating expense increased 3.8% and Gross Cruise Cost increased 4.9% in 2024 compared to 2023 primarily related to the delivery of two new ships in the second half of 2023 partially offset by a reduction in air costs largely due to changes in itinerary mix.

Total other operating expense increased 8.8% in 2024 compared to 2023 primarily related to an increase in depreciation expense from the delivery of two new ships in the second half of 2023 and variable compensation due to strong performance of the business.

Interest expense, net was $175.2 million in 2024 compared to $181.2 million in 2023.

Other income (expense), net was income of $1.9 million in 2024 compared to expense of $8.0 million in 2023.

The income and expense primarily relate to net gains and losses on foreign currency remeasurements.

Six months ended June 30, 2024 (“2024”) compared to six months ended June 30, 2023 (“2023”)

Total revenue increased to $4.6 billion in 2024 compared to $4.0 billion in 2023 primarily due to an increase in Capacity Days and improved pricing.

Gross margin increased 30.9% and Adjusted Gross Margin increased 17.4% to $3.3 billion in 2024 compared to $2.8 billion in 2023 due to an increase in Capacity Days of 5.9% and reflects an increase in passenger ticket pricing and onboard spending.

Other income (expense), net was expense of $34.1 million in 2024 compared to income of $12.1 million in 2023.

The income and expense primarily related to net gains and losses on foreign currency remeasurements.

Nine months ended September 30, 2024 (“2024”) compared to nine months ended September 30, 2023 (“2023”)

Total revenue increased to $7.4 billion in 2024 compared to $6.6 billion in 2023 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 5.7% and Gross Cruise Cost increased 5.7% 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 7.5% in 2024 compared to 2023 primarily related to an increase in depreciation expense from the delivery of three new ships in 2023.

Total other operating expense increased 7.9% in 2024 compared to 2023 primarily related to an increase in depreciation expense from the delivery of three new ships in 2023, variable compensation due to strong performance of the business and general and administrative costs related to consulting projects.

Interest expense, net was $571.9 million in 2024 compared to $530.2 million in 2023.

The increase in interest expense reflects higher losses in 2024 from extinguishment of debt and debt modification costs, which were $29.2 million in 2024 compared to $3.2 million in 2023.

Excluding these losses, interest expense increased primarily as a result of higher debt outstanding with the delivery of three ships in 2023.

Other income (expense), net was income of $20.0 million in 2024 compared to expense of $17.0 million in 2023.

The income and expense primarily relate to net gains and losses on foreign currency remeasurements.

Excluding these losses, interest expense increased primarily as a result of higher debt outstanding with the delivery of three ships in 2023, partially offset by lower rates.

Other income (expense), net was expense of $14.1 million in 2024 compared to $4.9 million in 2023.

The expenses primarily related to net losses on foreign currency remeasurements.

Liquidity and Capital Resources

As of June 30, 2024, our liquidity was approximately $2.7 billion, including cash and cash equivalents of $594.1 million and borrowings available under our $1.2 billion fully undrawn Revolving Loan Facility, €200 million commitment that can be used for future newbuild payments and $650 million undrawn commitment less related fees.

As of September 30, 2024, our liquidity was approximately $2.4 billion, including cash and cash equivalents of $332.5 million and borrowings available under our $1.2 billion fully undrawn Revolving Loan Facility, €200 million commitment that can be used for future newbuild payments and $650 million undrawn commitment less related fees.

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

1 unchanged sentence

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.

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.

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.

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 notes due 2030.

See Note 8 – “Long-Term Debt” for further details about the above financing transactions.

1 unchanged sentence

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.

We currently intend to refinance a portion of the $565.0 million 3.625% senior unsecured notes due in December 2024 during or prior to September 2024.

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

The remaining $250.0 million of the $565.0 million 3.625% senior unsecured notes due in December 2024 will be paid at maturity.

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

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

1 unchanged sentence

Refer to Item 1A, “Risk Factors” in our Annual Report on Form 10-K for further details regarding risks and uncertainties that may cause our results to differ from our expectations.

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

At 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 the covenants.

6 unchanged sentences

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 June 30, 2024, we had advance ticket sales of $3.9 billion, including the long-term portion, which included approximately $64.5 million of future cruise credits that have been issued as face value reimbursement for cancelled bookings due to COVID-19.

We also have agreements with our credit card processors that, as of June 30, 2024, governed approximately $3.5 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.

As of September 30, 2024, we had advance ticket sales of $3.3 billion, including the long-term portion, which included approximately $63.2 million of future cruise credits that have been issued as face value reimbursement for cancelled bookings due to COVID-19.

We also have agreements with our credit card processors that, as of September 30, 2024, governed approximately $2.9 billion in advance ticket sales that had been received by the Company relating to future voyages.

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

As of September 30, 2024, we had cash collateral 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.

Sources and Uses of Cash

In this section, references to “2024” refer to the six months ended June 30, 2024 and references to “2023” refer to the six months ended June 30, 2023.

In this section, references to “2024” refer to the nine months ended September 30, 2024 and references to “2023” refer to the nine months ended September 30, 2023.

Net cash provided by operating activities was $1.7 billion in 2024 and 2023.

The net cash provided by operating activities included net income (losses) and timing differences in cash receipts and payments relating to operating assets and liabilities.

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

Advance ticket sales increased by $90.9 million in 2024 and by $419.4 million in 2023.

3 unchanged sentences

The net cash used in investing activities was primarily related to newbuild payments in 2023.

Net cash used in financing activities was $665.5 million in 2024 primarily due to repayments of newbuild loans and our 2028 Secured Notes partially offset by the proceeds from newbuild loan facilities.

Net cash used in financing activities was $592.3 million in 2023 primarily due to debt repayments and a net decrease in our Revolving Loan Facility balance, partially offset by the proceeds from newbuild loan facilities and $850 million from our various note offerings.

Net cash used in financing activities was $734.8 million in 2024 primarily due to repayments of newbuild loans, our 2028 Secured Notes, and a portion of 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 $194.5 million in 2023 primarily due to newbuild loans and $850 million from our various note offerings, partially offset by debt repayments and a net decrease in our Revolving Loan Facility balance.

Future Capital Commitments

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

Anticipated expenditures related to ship construction contracts (which includes two ships on order for Oceania Cruises, currently scheduled for delivery in 2030 and 2031, that are expected to be cancelled, and excludes orders for four Norwegian Cruise Line ships, which were not effective as of June 30 ,2024) were $0.3 billion for the remainder of 2024 and $2.2 billion and $2.3 billion for the years ending December 31, 2025 and 2026, respectively, reflecting delays in certain scheduled ship delivery dates.

The Company has export credit financing in place for the anticipated expenditures related to ship construction contracts of $0.1 billion for the remainder of 2024 and $1.6 billion and $1.5 billion for the years ending December 31, 2025 and 2026, respectively.

Anticipated non-newbuild capital expenditures for the remainder of 2024 are approximately $280 million.

Anticipated expenditures related to ship construction contracts were $0.1 billion for the remainder of 2024 and $2.5 billion and $2.5 billion for the years ending December 31, 2025 and 2026, respectively, reflecting delays in certain scheduled ship delivery dates.

The Company has export credit financing in place for the anticipated expenditures related to ship construction contracts of $43.6 million for the remainder of 2024 and $1.7 billion and $1.6 billion for the years ending December 31, 2025 and 2026, respectively.

Anticipated non-newbuild capital expenditures for the remainder of 2024 are approximately $0.1 billion.

Future expected capital expenditures will significantly increase our depreciation and amortization expense.

12 unchanged sentences

Next Generation Prima Class

Norwegian Luna

Contract effective / financed (4)

18 unchanged sentences

Norwegian Cruise Line

Memorandum of agreement subject to Board of Director approval.

Memorandum of agreement effective.

Financing is being negotiated.

1 unchanged sentence

Contract effective, but not financed.

Order expected to be cancelled and replaced by listed Norwegian Cruise Line orders from 2030 – 2036 (5)

Order expected to be cancelled.

Oceania Cruises

Contract effective, but not financed.

Order expected to be cancelled and replaced by listed Norwegian Cruise Line orders from 2030 - 2036 (5)

Order expected to be cancelled.

Norwegian Cruise Line

Memorandum of agreement subject to Board of Director approval.

Memorandum of agreement effective.

Financing is being negotiated.

Norwegian Cruise Line

Memorandum of agreement subject to Board of Director approval.

Memorandum of agreement effective.

Financing is being negotiated.

Norwegian Cruise Line

Memorandum of agreement subject to Board of Director approval.

Memorandum of agreement effective.

Financing is being negotiated.

2 unchanged sentences

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

(3) Delivery for the second Oceania Cruises ship is contractually scheduled for the fourth quarter of 2028, but may be delayed to 2029.

(3) 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.

(4) 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.

(5) We expect the four-ship Norwegian Cruise Line order to replace the separate, effective, two-ship order for Oceania Cruises.

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

The shipbuilding contracts related to the four-ship order for Norwegian Cruise Line are still being finalized.

The combined contract prices, including amendments and change orders, of the 11 ships on order for delivery (which includes the 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 the orders for the 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.

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

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, 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.

1 unchanged sentence

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.

Capitalized interest for the three months ended June 30, 2024 and 2023 was $13.2 million and $16.6 million, respectively, and for the six months ended June 30, 2024 and 2023 was $23.3 million and $31.3 million, respectively, primarily associated with the construction of our newbuild ships.

Capitalized interest for the three months ended September 30, 2024 and 2023 was $17.2 million and $13.4 million, respectively, and for the nine months ended September 30, 2024 and 2023 was $40.5 million and $44.7 million, respectively, primarily associated with the construction of our newbuild ships.

Material Cash Requirements

As of June 30, 2024, our material cash requirements for debt and ship construction (which includes the two ships on order for Oceania Cruises that are expected to be cancelled, and excludes the orders for the four Norwegian Cruise Line ships, which were not effective as of June 30 ,2024) were as follows (in thousands):

As of September 30, 2024, our material cash requirements for debt and ship construction (which excludes the two ships on order for Oceania Cruises that are expected to be cancelled) were as follows (in thousands):

Long-term debt (1)

Ship construction contracts (2)

(1) Includes principal as well as estimated interest payments with Term SOFR held constant as of June 30, 2024.

Includes exchangeable notes which can be settled in shares.

(1) Includes principal as well as estimated interest payments with Term SOFR held constant as of September 30, 2024.

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.

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

dollar exchange rate as of June 30, 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.

dollar exchange rate as of September 30, 2024.

We have committed undrawn export-credit backed facilities of approximately $9.0 billion which funds approximately 80% of our ship construction contracts, with the exception of 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.

The above presentation reflects the current delivery dates;

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

Funding Sources

1 unchanged sentence

Substantially all of our ships are pledged as collateral for certain of our debt.

We believe we were in compliance with our covenants as of June 30, 2024.

We believe we were in compliance with our covenants as of September 30, 2024.

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.

10 unchanged sentences

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 2. Management’s Discussion and Analysis