What changed in this filing

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Item 1. Financial Statements

2025-05-05 compared with 2024-11-07 · 164 added, 232 removed, 379 unchanged (51% of the section changed)

4 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Passenger ticket

15 unchanged sentences

Total non-operating income (expense)

Net income before income taxes

Net income (loss) before income taxes

Income tax benefit (expense)

Net income (loss)

Weighted-average shares outstanding

Earnings per share

Earnings (loss) per share

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

Norwegian Cruise Line Holdings Ltd.

Consolidated Statements of Comprehensive Income

Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

Three Months Ended

Nine Months Ended

September 30,

Other comprehensive income (loss):

Net income (loss)

Other comprehensive income:

Shipboard Retirement Plan

Cash flow hedges:

Net unrealized gain (loss)

Net unrealized gain

Amount realized and reclassified into earnings

Total other comprehensive income (loss)

Total comprehensive income

Total other comprehensive income

Total comprehensive income (loss)

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;

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

443,439,387 shares issued and outstanding at March 31, 2025 and 439,861,281 shares issued and outstanding at December 31, 2024

Additional paid-in capital

9 unchanged sentences

(in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities

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

Net income (loss)

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

Depreciation and amortization expense

15 unchanged sentences

( 1,525,220 )

Cash paid on settlement of derivatives

Acquisition, net of cash acquired

Net cash used in investing activities

3 unchanged sentences

( 2,723,237 )

( 2,629,681 )

Proceeds from long-term debt

Proceeds from employee related plans

Net share settlement of restricted share units

2 unchanged sentences

Net cash provided by (used in) financing activities

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

4 unchanged sentences

(in thousands)

Three Months Ended September 30, 2024

Comprehensive

Shareholders’

Income (Loss)

Balance, June 30, 2024

( 6,719,348 )

Share-based compensation

Net share settlement of restricted share units

Other comprehensive loss, net

Balance, September 30, 2024

( 6,244,416 )

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

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, September 30, 2024

( 6,244,416 )

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

Norwegian Cruise Line Holdings Ltd.

Consolidated Statements of Changes in Shareholders’ Equity - Continued

(in thousands)

Three Months Ended September 30, 2023

Comprehensive

Shareholders’

Income (Loss)

Balance, June 30, 2023

( 7,139,520 )

Share-based compensation

Issuance of shares under employee related plans

Net share settlement of restricted share units

Common share issuance for NCLC exchangeable notes

Other comprehensive income, net

Balance, September 30, 2023

Balance, March 31, 2025

( 6,030,175 )

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

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 income, net

Balance, September 30, 2023

Balance, March 31, 2024

( 6,882,784 )

6 unchanged sentences

We refer you to “Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations— Terminology” for the capitalized terms used and not otherwise defined throughout these notes to consolidated financial statements.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Terminology” for the capitalized terms used and not otherwise defined throughout these notes to our consolidated financial statements.

Description of Business and Organization

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

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.

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

As of March 31, 2025, we had 33 ships with approximately 70,050 Berths.

The Company expects to add 12 additional ships to our fleet from 2025 through 2036.

We have three Prima Class Ships on order with currently scheduled delivery dates from 2026 through 2028.

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

1 unchanged sentence

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.

We have the option to cancel the last two ships on order for Oceania Cruises currently scheduled for delivery in 2030 and 2031.

Summary of Significant Accounting Policies

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).

As of March 31, 2025, we had liquidity of approximately $ 1.4 billion, including cash and cash equivalents of $ 184.4 million, $ 1.0 billion available under our Revolving Loan Facility and a € 200 million commitment that can be used for future newbuild payments through July 2025.

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.

We will continue to pursue various opportunities to refinance future debt maturities to reduce interest expense and/or to extend the maturity dates associated with our existing indebtedness and obtain relevant financial covenant amendments or waivers, if needed.

We will continue to pursue various opportunities to optimize our liquidity, refinance future debt maturities to reduce interest expense and/or to extend the maturity dates associated with our existing indebtedness and obtain relevant financial covenant amendments or waivers, if needed.

Basis of Presentation

8 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Net income - Basic EPS

Effect of dilutive securities - exchangeable notes

Net income and assumed conversion of exchangeable notes - Diluted EPS

Net income (loss)

Basic weighted-average shares outstanding

Dilutive effect of share awards

Dilutive effect of exchangeable notes

Diluted weighted-average shares outstanding

Each exchangeable note (see Note 7 – “Long-Term Debt”) is individually evaluated for its dilutive or anti-dilutive impact on EPS as determined under the if-converted method.

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

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

During the three months ended March 31, 2025 and 2024, each of the 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 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.

For the three months ended March 31, 2025 and 2024, a total of 79.6 million and 91.1 million shares, respectively, have been excluded from diluted weighted-average shares outstanding because the effect of including them would have been anti-dilutive.

Segment Reporting

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which aims to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 has been applied retrospectively.

The below table includes our calculation of adjusted operating income, our significant segment expenses therein, and a reconciliation of adjusted operating income to net income (loss) before income taxes (in thousands):

Three Months Ended

Total revenue

Cruise operating expense

Commissions, transportation and other

Onboard and other

Adjusted payroll and related (1)

Adjusted total cruise operating expense

Other operating expense

Adjusted marketing, general and administrative (2)

Depreciation and amortization

Adjusted total other operating expense

Adjusted operating income

Non-cash compensation (3)

Interest expense, net

Other income (expense), net

Net income (loss) before income taxes

(1) Excludes non-cash share-based compensation expenses related to equity awards for shipboard officers (see Note 9 – “Employee Benefits and Compensation Plans”) and non-cash deferred compensation expenses related to the crew pension plan as follows (in thousands):

Three Months Ended

(2) Excludes non-cash share-based compensation expenses related to equity awards for corporate employees (see Note 9 – “Employee Benefits and Compensation Plans”).

(3) Includes non-cash deferred compensation expenses related to the crew pension plan and non-cash share-based compensation expenses related to equity awards, which are included in payroll and related expense and marketing, general and administrative expense.

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 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.

We recognized losses of $ 22.5 million and gains of $ 13.3 million for the three months ended March 31, 2025 and 2024, 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.

2 unchanged sentences

however, for purposes of the consolidated statements of operations they are included in interest expense, net.

Accounts Receivable, Net

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

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 includes additional disclosures on an interim and annual basis and requires that the disclosures be applied to public entities that have a single reportable segment.

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.

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.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information as well as certain other amendments to improve the effectiveness of income tax disclosures.

The amendments in this update are effective for annual periods beginning after December 15, 2024 and should be applied on a prospective basis.

Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information as well as certain other amendments to improve the effectiveness of income tax disclosures.

The amendments in this update are effective for annual periods beginning after December 15, 2024 and will be applied on a prospective basis.

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 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;

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.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disaggregation of certain costs and expenses, including employee compensation, and requires other improvements to disclosures.

The amendments in this update are effective for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.

The update may be applied on a prospective or retrospective basis.

We are evaluating the impact of ASU 2024-03 on our notes to the consolidated financial statements.

Revenue Recognition

3 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

North America

4 unchanged sentences

Other includes all other international territories.

Segment Reporting and Geographic Concentration

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

Geographic Concentration

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 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.

The future cruise credits are not contracts, and therefore, guests who elected this option are excluded from our contract liability balance;

however, the credit for the original amount paid is included in advance ticket sales.

As of March 31, 2025 and December 31, 2024, our receivables from customers were $ 130.5 million and $ 114.2 million, respectively, primarily related to in-transit credit card receivables.

Our contract liabilities are included within advance ticket sales.

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.

As of March 31, 2025 and December 31, 2024, our contract liabilities were $ 2.8 billion and $ 2.2 billion, respectively.

Of the amounts included within contract liabilities as of March 31, 2025, approximately 45 % 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 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.

For the three months ended March 31, 2025, $ 1.5 billion of revenue recognized was included in the contract liability balance at the beginning of the period.

Operating Leases - Lessee

Operating lease balances were as follows (in thousands):

Balance Sheet location

September 30, 2024

March 31, 2025

December 31, 2024

6 unchanged sentences

Other long-term liabilities

Operating Leases - Lessor

In March and April 2025, we executed long-term leases for four of our ships.

The leases for Norwegian Sky and Seven Seas Navigator will commence in 2026, and the leases for Norwegian Sun and Insignia will commence in 2027.

Each lease has a term of 10 years and contains a nominal purchase option at the end of each lease term.

These leases are expected to be operating leases.

The aggregate undiscounted lease payments to be received throughout the terms of the agreements, including variable payments, are expected to be approximately $ 600 million.

Accumulated Other Comprehensive Income (Loss)

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

Nine Months Ended September 30, 2024

Accumulated other comprehensive income (loss) for the three months ended March 31, 2025 was as follows (in thousands):

Three Months Ended March 31, 2025

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

Accumulated other comprehensive income (loss) at end of period

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

Nine Months Ended September 30, 2023

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

Three Months Ended March 31, 2024

Comprehensive

8 unchanged sentences

Property and Equipment, Net

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

Property and equipment, net increased $ 1.3 billion for the three months ended March 31, 2025 primarily due to the delivery of Norwegian Aqua.

Long-Term Debt

In February 2024, NCLC and the purchasers named therein (collectively, the “Commitment Parties”) entered into a third amended and restated commitment letter (the “third amended commitment letter”), which became effective in March 2024.

The third amended commitment letter amended and restated the commitment letter dated February 22, 2023 and extended the commitments thereunder through March 2025.

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 (the “Commitment Notes”) at NCLC’s option.

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.

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.

In March 2024, in connection with the settlement of the repurchase, the aggregate principal amount outstanding under the 2028 Secured Notes was cancelled while also releasing the related collateral.

The loss on extinguishment was $ 29.0 million, recognized in interest expense, net.

In November 2023, we executed an agreement for a commitment of € 200 million in connection with financial support for our newbuilds, which became available in April 2024.

The commitment if drawn will pay interest quarterly at a rate per annum based on an applicable margin plus Euribor 3-months.

The commitment may be drawn at any time and is payable within 364 days , but no later than July 15, 2025.

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

Also in January 2025, NCLC issued $ 1.8 billion aggregate principal amount of 6.750 % senior unsecured notes due February 1, 2032 (the “2032 Notes”).

NCLC may, at its option, redeem the 2032 Notes, in whole or in part, (i) prior to February 1, 2028 (the “First Call Date”), at a redemption price equal to 100 % of the principal amount of the 2032 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 2032 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 2032 Notes with the net proceeds of certain equity offerings at a redemption price equal to 106.750 % of the principal amount of the 2032 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 2032 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 2032 Notes pay interest at 6.750 % per annum, semiannually in arrears on February 1 and August 1 of each year, to holders of record at the close of business on the immediately preceding January 15 and July 15, respectively.

The 2032 Notes indenture contains covenants that limit the ability of NCLC and its restricted subsidiaries to, among other things:

(i) grant or assume certain liens;

(i) create liens on certain assets to secure debt;

(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.

The net proceeds from the issuance of the 2032 Notes, together with cash on hand, were used to redeem $ 1.2 billion aggregate principal amount of the 5.875 % senior unsecured notes due 2026 and $ 600.0 million aggregate principal amount of the 8.375 % senior secured notes due 2028, together with accrued and unpaid interest thereon, and to pay related transaction premiums, fees and expenses.

The repayment of the 8.375% senior secured notes due 2028 also

released the related collateral.

During the three months ended March 31, 2025, the related losses on extinguishment were approximately $ 49.5 million, which were recognized in interest expense, net.

Concurrently with the above January 2025 transactions, NCLC entered into an amended and restated Revolving Loan Facility (the “Seventh ARCA”).

The Seventh ARCA, among other things, increased the aggregate amount of commitments under the Revolving Loan Facility from $ 1.2 billion to $ 1.7 billion.

The commitments and any loans under the Revolving Loan Facility mature on January 22, 2030, provided that (a) if, on the date that is 91 days prior to the final maturity date of any of NCLC’s outstanding senior notes (other than the exchangeable notes), (i) such senior notes (other than the exchangeable notes) have not been repaid or refinanced with indebtedness maturing after April 23, 2030 and (ii) the aggregate principal amount outstanding under such senior notes exceeds $ 400,000,000 , the maturity date will be such date if such date is earlier than January 22, 2030, (b) if, on November 17, 2026, the 2027 1.125 % Exchangeable Notes have not been repaid or refinanced with indebtedness maturing after April 23, 2030 and a liquidity test is not satisfied, the maturity date will be November 17, 2026 and (c) if, on November 17, 2026, the 2027 2.5 % Exchangeable Notes have not been repaid or refinanced with indebtedness maturing after April 23, 2030 and a liquidity test is not satisfied, the maturity date will be November 17, 2026.

Loans under the Revolving Loan Facility will accrue interest (x) in the case of alternate base rate loans, at a per annum rate based on an alternate base rate plus a margin of between 0.00 % and 1.00 % and (y) in the case of term benchmark loans, at a per annum rate based on the adjusted term SOFR plus a margin of between 1.00 % and 2.00 %.

The commitments under the Revolving Loan Facility will accrue an unused commitment fee on the amount of available unused commitments at a rate of between 0.15 % and 0.30 %.

The applicable margin and unused commitment fee will depend on the total leverage ratio as of the applicable date.

The Seventh ARCA also modified certain existing negative covenant thresholds and the related collateral.

The Seventh ARCA and related guarantees are now secured by first-priority interests in, among other things and subject to certain agreed security principles, ten of our vessels.

In January 2025, NCLC also entered into a supplemental indenture that modified the collateral for the 8.125 % senior secured notes due 2029 such that this collateral is the same as the Seventh ARCA.

In March 2025, we took delivery of Norwegian Aqua.

We had export credit financing in place for 80 % of the contract price.

The associated € 1.0 billion term loan bears interest at a fixed rate of 1.83 % with a maturity date of February 23, 2037.

Principal and interest payments are payable semiannually.

In April 2025, NCLC entered into individually negotiated note exchange agreements with certain existing holders (the “Holders”) of the 2025 Exchangeable Notes, pursuant to which NCLC and the Holders agreed to exchange (the “Exchange”) approximately $ 353.9 million in aggregate principal amount of the Holders’ 2025 Exchangeable Notes for (i) approximately $ 353.9 million in aggregate principal amount of NCLC’s newly issued 0.875 % exchangeable senior notes due April 15, 2030 (the “2030 Exchangeable Notes”) and (ii) an aggregate cash payment (the “Cash Payment”) of approximately $ 64.0 million, plus accrued and unpaid interest on the 2025 Exchangeable Notes that was exchanged to, but excluding, the closing date of the Exchange.

The Cash Payment was equal to the gross proceeds from the concurrent Equity Offering (as defined below) and represented the remainder of NCLC’s exchange obligation in excess of the aggregate principal amount of the 2025 Exchangeable Notes that were exchanged.

Additionally, in April 2025, the Company completed a registered direct offering of 3,358,098 ordinary shares to the Holders at a price of $ 19.06 per share (the “Equity Offering”).

In connection with the Equity Offering, the Company entered into individually negotiated share purchase agreements with the Holders.

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

The 2030 Exchangeable Notes are general senior unsecured obligations of NCLC and guaranteed by NCLH on a senior unsecured basis.

Holders may exchange all or a portion of the 2030 Exchangeable Notes at the holder’s option (i) at any time prior to the close of business on the business day immediately preceding October 15, 2029, subject to the satisfaction of certain conditions and during certain periods, and (ii) on or after October 15, 2029 until the close of business on the business day immediately preceding the maturity date, regardless of whether such conditions have been met.

Upon exchange of the 2030 Exchangeable Notes, NCLC will satisfy its exchange obligation by paying cash up to the aggregate principal amount of the 2030 Exchangeable Notes to be exchanged and paying or delivering, as the case may be, cash, ordinary shares or a combination of cash and ordinary shares, at NCLC’s election, in respect of the

remainder, if any, of NCLC’s exchange obligation in excess of the aggregate principal amount of the 2030 Notes to be exchanged.

The initial exchange rate per $ 1,000 principal amount of 2030 Notes is 38.1570 ordinary shares, which is equivalent to an initial exchange price of approximately $ 26.21 per ordinary share, subject to adjustment in certain circumstances.

The maximum exchange rate is 52.4658 and reflects potential adjustments to the initial exchange rate, which would only be made in the event of certain make-whole fundamental changes or tax redemption events.

The exchange rate referred to above is also subject to adjustment for any stock split, stock dividend or similar transaction.

The 2030 Exchangeable Notes pay interest at 0.875 % per annum, semiannually on April 15 and October 15 of each year, to holders of record at the close of business on the immediately preceding April 1 and October 1, respectively.

Exchangeable Notes

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

The following is a summary of NCLC’s exchangeable notes as of March 31, 2025 (in thousands):

Financing Fees

7 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.

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

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.

As of March 31, 2025, we reclassified $ 353.9 million to long-term debt as this portion was refinanced using proceeds from the 2030 Exchangeable Notes prior to issuance of this report and the remainder was classified within current portion of long-term debt.

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

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

Three Months Ended

Nine Months Ended

September 30,

Coupon interest

Amortization of deferred financing fees

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.

As of March 31, 2025, 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 NCLH ordinary shares, and finance lease obligations as of September 30, 2024 (in thousands):

Remainder of 2025 (1)

(1) As a result of the Exchange, as of March 31, 2025, we reclassified $ 353.9 million from 2025 to 2030 consistent with the presentation in the accompanying consolidated balance sheet.

Debt Covenants

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

As of March 31, 2025, 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.

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

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 .

As of March 31, 2025, we had fuel swaps, which are used to mitigate the financial impact of volatility of fuel prices pertaining to approximately 994 thousand metric tons of our projected fuel purchases, maturing through December 31, 2027 .

As of March 31, 2025, we had fuel swaps pertaining to approximately 47 thousand metric tons of our projected fuel purchases which were not designated as cash flow hedges maturing through February 28, 2026 .

As of March 31, 2025, we had foreign currency forwards and collars which were 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 foreign currency contracts were € 709.9 million, or $ 767.8 million based on the euro/U.S.

dollar exchange rate as of March 31, 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

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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

Other long-term assets

Accrued expenses and other liabilities

Other long-term liabilities

Total derivatives designated as hedging instruments

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Fuel contracts

Prepaid expenses and other assets

Accrued expenses and other liabilities

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

September 30, 2024

March 31, 2025

December 31, 2024

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(Loss) into Income (Expense)

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

Fuel contracts

Other income (expense), net

Foreign currency contracts

Depreciation and amortization

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)

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

March 31, 2025

March 31, 2024

March 31, 2025

March 31, 2024

Fuel contracts

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

Three Months Ended September 30, 2024

Three Months Ended September 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

Nine Months Ended September 30, 2024

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2025

Three Months Ended March 31, 2024

( Expense), net

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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

Nine Months Ended

September 30,

Location of Gain (Loss)

Derivatives not designated as hedging instruments

Fuel contracts

Other income (expense), net

Long-Term Debt

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.

As of March 31, 2025 and December 31, 2024, the fair value of our long-term debt, including the current portion, was $ 13.7 billion and $ 12.8 billion, respectively, which was $ 0.6 billion lower 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.

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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 NCLH ordinary 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 NCLH ordinary shares.

Restricted Share Unit Awards

In March 2025, NCLH granted 4.5 million time-based restricted share unit awards to our employees, which primarily vest in substantially equal installments over three years .

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 nine months ended September 30, 2024:

Additionally, in March 2025, NCLH granted 1.1 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 2027 and the satisfaction of an additional time-based vesting requirement that generally requires continued employment through March 1, 2028.

The following is a summary of restricted share unit activity for the three months ended March 31, 2025:

Average Grant

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Forfeited or expired

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 nine months ended September 30, 2024:

Number of Share Option Awards

Weighted-Average Exercise Price

(in thousands)

Outstanding as of January 1, 2024

Forfeited and cancelled

( 1,057,038 )

Outstanding as of September 30, 2024

Non-vested as of March 31, 2025

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

Three Months Ended

Nine Months Ended

September 30,

Payroll and related expense

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Ship Construction Contracts

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 have three 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 2026 through 2028.

For the Norwegian brand, we also have an order for four additional ships, each at approximately 225,000 Gross Tons and 5,150 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 1,200 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, 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 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, that we have the option to cancel), 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.

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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 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.

The combined contract prices, including amendments and change orders, of the 12 ships on order for delivery as of March 31, 2025 (which excludes two ships on order for Oceania Cruises, which are currently scheduled for delivery in 2030 and 2031, that we have the option to cancel) was approximately € 17.2 billion, or $ 18.6 billion based on the euro/U.S.

dollar exchange rate as of March 31, 2025.

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

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.

For ships on order, excluding the two ships on order for Oceania Cruises that we have the option to cancel and the four additional ships on order for Norwegian Cruise Line with currently scheduled delivery from 2030 to 2036, 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 if we exercise our option to cancel.

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

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

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

On October 22, 2024, the Eleventh Circuit reversed the trial court in the pending matter and dismissed the claim.

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

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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.

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.

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 $ 2.9 billion in advance ticket sales at September 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 $ 3.5 billion in advance ticket sales at March 31, 2025 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 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 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.

For the three months ended March 31, 2025, other income (expense), net consisted of expense of $ 24.5 million, and for the three months ended March 31, 2024, other income (expense), net consisted of income of $ 18.1 million primarily due to net gains and losses on foreign currency remeasurements.

Supplemental Cash Flow Information

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.

For the three months ended March 31, 2025 and 2024, we had non-cash investing activities consisting of changes in accruals related to property and equipment of $ 4.0 million and $ 11.3 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