What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-04 compared with 2025-05-05 · 114 added, 78 removed, 318 unchanged (38% of the section changed)

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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, 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.

All statements other than statements of historical facts contained, or incorporated by reference, in this report, including, without limitation, our expectations regarding our results of operations, 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 and valuation allowances, 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.

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Examples of these risks, uncertainties and other factors include, but are not limited to the impact of:

● adverse general economic factors, such as fluctuating or increasing levels of interest rates, inflation, unemployment, underemployment, tariff increases and trade wars, and the volatility of fuel prices, declines in the securities and real estate markets, and perceptions of these conditions that decrease the level of disposable income of consumers or consumer confidence;

● adverse general economic factors, such as fluctuating or increasing levels of interest rates, inflation, unemployment, underemployment, tariff increases and trade wars, the volatility of fuel prices, declines in the securities and real estate markets, and perceptions of these conditions that decrease the level of disposable income of consumers or consumer confidence;

● our indebtedness and restrictions in the agreements governing our indebtedness that require us to maintain minimum levels of liquidity and be in compliance with maintenance covenants and otherwise limit our flexibility in operating our business, including the significant portion of assets that are collateral under these agreements;

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● the unavailability of ports of call;

● future increases in the price of, or major changes, disruptions or reduction in, commercial airline services;

● future increases in the price of, or major changes, disruptions or reductions in, commercial airline services;

● changes involving the tax and environmental regulatory regimes in which we operate, including new and existing regulations aimed at reducing greenhouse gas emissions;

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● 2024 Exchangeable Notes .

On May 8, 2020, pursuant to an indenture among NCLC, as issuer, NCLH, as guarantor, and U.S.

Bank National Association, as trustee, NCLC issued $862.5 million aggregate principal amount of exchangeable senior notes due 2024.

● 2025 Exchangeable Notes .

On July 21, 2020, pursuant to an indenture among NCLC, as issuer, NCLH, as guarantor, and U.S.

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● Revolving Loan Facility.

$1.7 billion senior secured revolving credit facility.

Approximately $2.5 billion senior secured revolving credit facility.

Securities and Exchange Commission.

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An unfunded defined benefit pension plan for certain crew members which computes benefits based on years of service, subject to certain requirements.

● Sonata Class Ships.

Oceania Sonata, Oceania Arietta and two additional ships on order.

Non-GAAP Financial Measures

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

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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 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.

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 (loss) and EPS.

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

For example, for the three months ended June 30 2025, we incurred $68.4 million related to losses on extinguishment and modification of debt.

We included this as an adjustment in the reconciliation of Adjusted Net Income since the expenses are not representative of our day-to-day operations;

however, this adjustment did not occur and is not included in the comparative period presented within this report.

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

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

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

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

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

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

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

You are encouraged to evaluate each adjustment used in calculating our non-GAAP financial measures and the reasons we consider our non-GAAP financial measures appropriate for supplemental analysis.

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

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

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

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

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

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

The collateral of the Revolving Loan Facility and the 8.125% senior secured notes due 2029 were also modified.

See Note 7 – “Long-Term Debt” for more information.

Update on Bookings

The Company has seen softening in its 12-month forward booked position but continues to remain within the optimal range, even amid ongoing macroeconomic volatility.

The Company had strong bookings in the quarter with bookings now ahead of historical levels in recent months, reflecting a strong rebound in demand following early-April softness for third-quarter long-haul, extended European itineraries.

As a result, the Company remains well positioned within its optimal range for its forward 12-month booked position.

Strategic Destination Investment

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

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

This is in addition to the previously announced two-ship pier, pool, family splash pad, welcome center and tram, which are expected to open by the end of 2025.

Margin Enhancement Initiative

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

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

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

See “Item 1A.

Risk Factors” in our Annual Report on Form 10-K for additional information.

Risk Factors” in our Annual Report on Form 10-K and “Item 3.

Quantitative and Qualitative Disclosures About Market Risk” below for additional information.

Climate Change

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

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

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

fuels, among other things.

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

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

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.

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Quarterly Overview

Three months ended March 31, 2025 (“2025”) compared to three months ended March 31, 2024 (“2024”)

● Total revenue decreased 2.9% to $2.1 billion compared to $2.2 billion.

Three months ended June 30, 2025 (“2025”) compared to three months ended June 30, 2024 (“2024”)

● Total revenue increased 6.1% to $2.5 billion compared to $2.4 billion.

● Net income (loss) and diluted EPS were $30.0 million and $0.07, respectively, compared to $163.4 million and $0.35, respectively.

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● Gross margin increased 17.5% to $835.9 million compared to $711.4 million.

Adjusted Gross Margin decreased slightly from 2024 to 2025.

● Adjusted Net Income and Adjusted EPS were $30.5 million and $0.07, respectively, in 2025, which included $70.8 million of adjustments primarily related to losses on extinguishment and modification of debt.

Adjusted Net Income and Adjusted EPS were $69.5 million and $0.16, respectively, in 2024, which included $52.2 million of adjustments primarily related to losses on extinguishment and modification of debt and share-based compensation.

● Adjusted EBITDA decreased 2.4% to $453.1 million compared to $464.0 million.

Adjusted Gross Margin increased 8.4% to $1.8 billion compared to $1.7 billion.

● Adjusted Net Income and Adjusted EPS were $257.3 million and $0.51, respectively, in 2025, which included $227.3 million of adjustments primarily related to certain euro foreign currency remeasurements and losses on extinguishment and modification of debt.

Adjusted Net Income and Adjusted EPS were $201.7 million and $0.39, respectively, in 2024, which included $22.2 million of adjustments primarily related to share-based compensation.

● Adjusted EBITDA improved 18.1% to $694.0 million compared to $587.7 million.

We refer you to our “Results of Operations” below for a calculation of Adjusted Gross Margin, Adjusted Net Income, Adjusted EPS and Adjusted EBITDA.

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Three Months Ended

Six Months Ended

Passengers carried

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Three Months Ended

Six Months Ended

Total revenue

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Three Months Ended

Six Months Ended

Total cruise operating expense

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Three Months Ended

Six Months Ended

Net income (loss)

Effect of dilutive securities - exchangeable notes

Net income and assumed conversion of exchangeable notes

Non-GAAP Adjustments:

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Extinguishment and modification of debt (3)

Net foreign currency adjustments on euro-denominated debt (4)

Effect of dilutive securities - exchangeable notes (5)

Adjusted Net Income

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

Diluted weighted-average shares outstanding - Net income (loss)

Diluted weighted-average shares outstanding - 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.

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(3) Losses on extinguishment of debt and modification of debt are included in interest expense, net.

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

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

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

Three Months Ended

Six Months Ended

Net income (loss)

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(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 March 31, 2025 (“2025”) compared to three months ended March 31, 2024 (“2024”)

Total revenue decreased to $2.1 billion in 2025 compared to $2.2 billion in 2024 primarily due to a decrease in Capacity Days.

The decrease in Capacity Days was primarily related to increased Berths, due to larger ships, in Dry-dock in 2025.

Total cruise operating expense decreased 6.0% and Gross Cruise Cost decreased 3.1% in 2025 compared to 2024 primarily related to a reduction in air costs largely due to changes in itinerary mix and fuel costs.

Three months ended June 30, 2025 (“2025”) compared to three months ended June 30, 2024 (“2024”)

Total revenue increased to $2.5 billion in 2025 compared to $2.4 billion in 2024 primarily due to an increase in Capacity Days related to the delivery of Norwegian Aqua in March 2025.

Total cruise operating expense increased 0.1% primarily due to the delivery of Norwegian Aqua in March 2025 offset primarily by a reduction in air costs largely due to changes in itinerary mix.

Gross Cruise Cost increased 2.3% and total other operating expense increased 10.5% in 2025 compared to 2024 primarily related to an increase in marketing, general and administrative expense from higher advertising and promotions.

Interest expense, net was $236.8 million in 2025 compared to $178.5 million in 2024.

The change in interest expense reflects losses in 2025 from extinguishment of debt and debt modification costs, which were $68.4 million.

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

Other income (expense), net was expense of $156.4 million in 2025 compared to income of $1.9 million in 2024.

The income and expense primarily related to net gains and losses from foreign currency remeasurements of our euro-denominated debt.

Six months ended June 30, 2025 (“2025”) compared to six months ended June 30, 2024 (“2024”)

Total revenue was $4.6 billion in both 2025 and 2024.

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

Total cruise operating expense decreased 2.9% primarily related to a reduction in air costs largely due to changes in itinerary mix and fuel cost offset by the delivery of Norwegian Aqua in March 2025.

Gross Cruise Cost decreased 0.4% in 2025 compared to 2024 primarily due to the change in costs described above and an increase in marketing, general and administrative expense.

Total other operating expense increased 8.4% in 2025 compared to 2024 primarily related to an increase in marketing, general and administrative expense from higher advertising and promotions.

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The change in interest expense reflects higher losses in 2025 from extinguishment of debt and debt modification costs, which were $118.0 million in 2025 compared to $29.0 million in 2024.

Excluding these losses, interest expense decreased primarily as a result of lower average debt balances and lower rates.

Excluding these losses, interest expense decreased primarily as a result of lower rates and lower average debt balances.

Other income (expense), net was expense of $180.9 million in 2025 compared to income of $20.0 million in 2024.

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

The income and expense primarily related to net gains and losses from foreign currency remeasurements of our euro-denominated debt.

Liquidity and Capital Resources

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

As of June 30, 2025, our liquidity was approximately $2.4 billion, including cash and cash equivalents of $184.0 million, $2.0 billion available under our Revolving Loan Facility and €200 million commitment that could be used for future newbuild payments which was available through July 2025.

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

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

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

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

The collateral of the Revolving Loan Facility and the 8.125% senior secured notes due 2029 were also modified.

See Note 7 – “Long-Term Debt” for further details about the above financing transactions.

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

The remaining $225.0 million of the 5.875% senior unsecured notes due in March 2026 will be paid at maturity unless refinanced.

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

The remaining $225.0 million of the 5.875% senior unsecured notes due in March 2026 will be paid at maturity unless

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

Beyond the next 12 months, we will pursue refinancings and other balance sheet optimization transactions in order to reduce interest expense and/or extend

debt maturities.

Beyond the next 12 months, we will pursue refinancings and other balance sheet optimization transactions in order to reduce interest expense and/or extend debt maturities.

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.

As of March 31, 2025, we were in compliance with all of our debt covenants.

As of June 30, 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 the covenants.

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

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

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

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

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

As of March 31, 2025, we had advance ticket sales of $3.9 billion, including the long-term portion.

We also have agreements with our credit card processors that, as of March 31, 2025, governed approximately $3.5 billion in advance ticket sales that had been received by the Company relating to future voyages.

As of June 30, 2025, we had advance ticket sales of $4.0 billion, including the long-term portion.

We also have agreements with our credit card processors that, as of June 30, 2025, governed approximately $3.6 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.

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Sources and Uses of Cash

In this section, references to “2025” refer to the three months ended March 31, 2025 and references to “2024” refer to the three months ended March 31, 2024.

Net cash provided by operating activities was $679.2 million in 2025 and $807.2 million 2024.

In this section, references to “2025” refer to the six months ended June 30, 2025 and references to “2024” refer to the six months ended June 30, 2024.

Net cash provided by operating activities was $1.4 billion in 2025 and $1.5 billion in 2024.

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.

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The net cash used in investing activities was primarily related to newbuild payments and ship improvements in 2024.

Net cash provided by financing activities was $846.6 million in 2025 primarily due to newbuild loans related to the delivery of Norwegian Aqua.

Net cash used in financing activities was $394.5 million in 2024 primarily due to repayments of newbuild loans and our 9.75% senior secured notes due 2028.

Net cash provided by financing activities was $467.2 million in 2025 primarily due to newbuild loans related to the delivery of Norwegian Aqua partially offset by payments on our Revolving Loan Facility and other newbuild loan facilities.

Net cash used in financing activities was $665.5 million in 2024 primarily due to repayments of newbuild loans and our 9.75% senior secured notes due 2028 partially offset by the proceeds from newbuild loan facilities.

Future Capital Commitments

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

Anticipated expenditures related to ship construction contracts and growth, which includes private island developments and enhancements and other strategic growth initiatives, were $1.3 billion for the remainder of 2025 and $2.5 billion and $2.5 billion for the years ending December 31, 2026 and 2027, respectively.

The Company has export credit financing in place for the anticipated expenditures related to ship construction contracts of $0.7 billion for the remainder of 2025 and

$1.5 billion and $1.9 billion for the years ending December 31, 2026 and 2027, respectively.

Anticipated expenditures related to ship construction contracts and growth, which includes private island developments and enhancements and other strategic growth initiatives, were $1.2 billion for the remainder of 2025 and $2.7 billion for the years ending December 31, 2026 and 2027.

The Company has export credit financing in place for the anticipated expenditures related to ship construction contracts of $0.7 billion for the remainder of 2025 and $1.6 billion and $2.0 billion for the years ending December 31, 2026 and 2027, respectively.

Anticipated other non-newbuild capital expenditures for the remainder of 2025 are approximately $0.2 billion.

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The following chart discloses details about our newbuild program.

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

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

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

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Gross Tons (1)

Oceania Cruises

Contract effective / financed (4)

Norwegian Cruise Line

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Contract effective / financed (3)

Regent Seven Seas

Regent Seven Seas Cruises

Prestige Class

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Oceania Cruises

Oceania Sonata

Contract effective / financed (3)

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Contract effective / financed (3)

Expected 2029 (3)

Oceania Cruises

Oceania Arietta

Contract effective / financed (3)

Regent Seven Seas

Norwegian Cruise Line

Contract effective / financed (3)

Regent Seven Seas Cruises

Prestige Class

Contract effective / financed (3)

Norwegian Cruise Line

Contract effective / financing is being negotiated.

Oceania Cruises

Contract effective, but not financed.

Option to cancel.

Oceania Cruises

Contract effective, but not financed.

Option to cancel.

Contract effective, but not yet financed.

Norwegian Cruise Line

Contract effective / financing is being negotiated.

Contract effective / financed (3)

Norwegian Cruise Line

Contract effective / financing is being negotiated.

Oceania Cruises

Contract effective, but not yet financed.

Norwegian Cruise Line

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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, which would result in additional fees.

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

(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 12 ships on order for delivery (which excludes the two ships on order for Oceania Cruises, which are currently scheduled for delivery in 2030 and 2031, that we have the option to cancel) was approximately €17.2 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.

We do not anticipate any contractual breaches or cancellations to occur, except as noted above if we exercise our option to cancel.

The combined contract prices, including amendments and change orders, of the 13 ships on order for delivery (which excludes Oceania Allura and includes the two additional Sonata Class Ships on order for delivery as of July 2025) was approximately €18.4 billion, or $21.7 billion based on the euro/U.S.

dollar exchange rate as of June 30, 2025.

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

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

Capitalized interest for the three months ended March 31, 2025 and 2024 was $22.5 million and $10.1 million, respectively, primarily associated with the construction of our newbuild ships.

Capitalized interest for the three months ended June 30, 2025 and 2024 was $21.4 million and $13.2 million, respectively, and for the six months ended June 30, 2025 and 2024 was $43.9 million and $23.3 million, respectively, primarily associated with the construction of our newbuild ships.

Material Cash Requirements

Our material cash requirements for debt and ship construction (which excludes the two ships on order for Oceania Cruises that we have the option to cancel) were as follows (in thousands):

As of June 30, 2025, our material cash requirements for debt and ship construction (which excludes the two Sonata Class Ships on order for Oceania Cruises that we previously had the option to cancel as of June 30, 2025) 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 March 31, 2025.

(1) Includes principal as well as estimated interest payments with Term SOFR held constant as of June 30, 2025.

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

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

Subsequent to March 31, 2025, we completed an Exchange of $353.9 million 2025 Exchangeable Notes for an equal principal of 2030 Exchangeable Notes.

The related principal repayment has been reclassified from 2025 to 2030 in the table above and the interest payments include the 2030 Exchangeable Notes.

Subsequent to June 30, 2025, substantially all of the remaining holders of the 2025 Exchangeable Notes exchanged their notes for NCLH ordinary shares.

See Note 7 – “Long-Term Debt” for further information.

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

dollar exchange rate as of March 31, 2025.

We have committed undrawn export-credit backed facilities of approximately $7.8 billion which funds approximately 80% of our ship construction contracts, with the exception of the two ships on order for Oceania Cruises that we have the option to cancel and the four additional ships on order for Norwegian Cruise Line with currently scheduled delivery from 2030 to 2036.

The above presentation reflects the current delivery dates;

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

dollar exchange rate as of June 30, 2025.

We currently have committed undrawn export-credit backed facilities of approximately $13.0 billion which funds approximately 80% of our ship construction contracts, with the exception of the two Sonata Class Ships on order for Oceania Cruises with currently scheduled delivery in 2032 and 2035 and the two additional ships on order for Norwegian Cruise Line with currently scheduled delivery in 2034 and 2036.

Subsequent to June 30, 2025, we confirmed that we will not exercise the options to cancel the orders for the last two Sonata Class Ships and reset certain ship delivery dates.

The table below reflects these changes on our material cash requirements (in thousands):

Ship construction contracts

Funding Sources

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The net book value of our ships pledged as collateral for certain of our debt is approximately $16 billion.

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

We believe we were in compliance with our covenants as of June 30, 2025.

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

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

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

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

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

2 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