Norwegian Cruise Line Holdings Ltd. [NCLH] Filings

10-Q 1 nclh-20240930x10q.htm 10-Q

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-35784

NORWEGIAN CRUISE LINE HOLDINGS LTD.

(Exact name of registrant as specified in its charter)


Bermuda		98-0691007
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7665 Corporate Center Drive, Miami, Florida 33126		33126
(Address of principal executive offices)		(zip code)

(305) 436-4000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Ordinary shares, par value $0.001 per share		NCLH		The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ⌧	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

There were 439,708,278 ordinary shares outstanding as of October 31, 2024.

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TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39

Item 4.	Controls and Procedures	40

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	40

Item 1A.	Risk Factors	40

Item 5.	Other Information	41

Item 6.	Exhibits	41

SIGNATURES		42

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Norwegian Cruise Line Holdings Ltd.

Consolidated Statements of Operations

(Unaudited)

(in thousands, except share and per share data)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Revenue
Passenger ticket	$	1,944,921	$	1,733,594	$	5,006,811	$	4,420,909
Onboard and other		861,657		802,443		2,363,474		2,142,559
Total revenue		2,806,578		2,536,037		7,370,285		6,563,468
Cruise operating expense
Commissions, transportation and other		564,614		546,026		1,501,863		1,462,565
Onboard and other		211,753		188,694		515,496		470,271
Payroll and related		337,430		323,862		1,012,289		936,237
Fuel		164,934		170,893		537,632		530,003
Food		78,096		87,839		239,850		271,575
Other		182,112		165,432		573,987		476,123
Total cruise operating expense		1,538,939		1,482,746		4,381,117		4,146,774
Other operating expense
Marketing, general and administrative		358,001		325,365		1,074,241		1,013,600
Depreciation and amortization		218,428		204,608		663,762		596,513
Total other operating expense		576,429		529,973		1,738,003		1,610,113
Operating income		691,210		523,318		1,251,165		806,581
Non-operating income (expense)
Interest expense, net		(175,216)		(181,201)		(571,865)		(530,150)
Other income (expense), net		(34,146)		12,060		(14,113)		(4,938)
Total non-operating income (expense)		(209,362)		(169,141)		(585,978)		(535,088)
Net income before income taxes		481,848		354,177		665,187		271,493
Income tax benefit (expense)		(6,916)		(8,309)		(9,466)		1,170
Net income	$	474,932	$	345,868	$	655,721	$	272,663
Weighted-average shares outstanding
Basic		439,697,135		425,398,415		433,790,997		424,087,517
Diluted		514,878,919		511,585,445		514,002,031		460,819,375
Earnings per share
Basic	$	1.08	$	0.81	$	1.51	$	0.64
Diluted	$	0.95	$	0.71	$	1.37	$	0.62

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

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Norwegian Cruise Line Holdings Ltd.

Consolidated Statements of Comprehensive Income

(Unaudited)

(in thousands)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Net income	$	474,932	$	345,868	$	655,721	$	272,663
Other comprehensive income (loss):
Shipboard Retirement Plan		94		63		283		191
Cash flow hedges:
Net unrealized gain (loss)		(56,078)		57,885		(7,668)		34,833
Amount realized and reclassified into earnings		2,630		(6,563)		(3,853)		(13,890)
Total other comprehensive income (loss)		(53,354)		51,385		(11,238)		21,134
Total comprehensive income	$	421,578	$	397,253	$	644,483	$	293,797

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

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Norwegian Cruise Line Holdings Ltd.

Consolidated Balance Sheets

(Unaudited)

(in thousands, except share data)


	September 30,		December 31,
	2024		2023
Assets
Current assets:
Cash and cash equivalents	$	332,521	$	402,415
Accounts receivable, net		200,841		280,271
Inventories		145,056		157,646
Prepaid expenses and other assets		500,815		472,816
Total current assets		1,179,233		1,313,148
Property and equipment, net		16,743,936		16,433,292
Goodwill		135,764		98,134
Trade names		500,525		500,525
Other long-term assets		1,226,545		1,147,891
Total assets	$	19,786,003	$	19,492,990
Liabilities and shareholders’ equity
Current liabilities:
Current portion of long-term debt	$	1,653,460	$	1,744,778
Accounts payable		172,937		174,338
Accrued expenses and other liabilities		1,067,532		1,058,919
Advance ticket sales		3,144,586		3,060,666
Total current liabilities		6,038,515		6,038,701
Long-term debt		11,751,743		12,314,147
Other long-term liabilities		860,415		839,335
Total liabilities		18,650,673		19,192,183
Commitments and contingencies (Note 11)
Shareholders’ equity:
Ordinary shares, $0.001 par value; 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		440		425
Additional paid-in capital		7,898,982		7,708,957
Accumulated other comprehensive income (loss)		(519,676)		(508,438)
Accumulated deficit		(6,244,416)		(6,900,137)
Total shareholders’ equity		1,135,330		300,807
Total liabilities and shareholders’ equity	$	19,786,003	$	19,492,990

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

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Norwegian Cruise Line Holdings Ltd.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)


	Nine Months Ended
	September 30,
	2024		2023
Cash flows from operating activities
Net income	$	655,721	$	272,663
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		726,877		649,958
(Gain) loss on derivatives		(712)		9,338
Loss on extinguishment of debt		29,175		2,801
Provision for bad debts and inventory obsolescence		3,668		3,640
Gain on involuntary conversion of assets		(4,605)		(4,583)
Share-based compensation expense		65,570		96,254
Net foreign currency adjustments on euro-denominated debt		6,811		(2,027)
Changes in operating assets and liabilities:
Accounts receivable, net		72,341		80,064
Inventories		12,160		(18,120)
Prepaid expenses and other assets		26,244		437,465
Accounts payable		(8,388)		(60,971)
Accrued expenses and other liabilities		(25,154)		(139,188)
Advance ticket sales		90,859		419,420
Net cash provided by operating activities		1,650,567		1,746,714
Cash flows from investing activities
Additions to property and equipment, net		(967,516)		(2,102,698)
Cash paid on settlement of derivatives		—		(118,610)
Acquisition, net of cash acquired		(27,322)		—
Other		9,164		14,678
Net cash used in investing activities		(985,674)		(2,206,630)
Cash flows from financing activities
Repayments of long-term debt		(1,268,605)		(2,629,681)
Proceeds from long-term debt		688,901		2,989,183
Proceeds from employee related plans		—		5,307
Net share settlement of restricted share units		(22,058)		(25,271)
Early redemption premium		(19,166)		—
Deferred financing fees		(113,859)		(145,051)
Net cash provided by (used in) financing activities		(734,787)		194,487
Net decrease in cash and cash equivalents		(69,894)		(265,429)
Cash and cash equivalents at beginning of period		402,415		946,987
Cash and cash equivalents at end of period	$	332,521	$	681,558

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

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Norwegian Cruise Line Holdings Ltd.

Consolidated Statements of Changes in Shareholders’ Equity

(Unaudited)

(in thousands)


	Three Months Ended September 30, 2024
					Accumulated
			Additional		Other				Total
	Ordinary		Paid-in		Comprehensive		Accumulated		Shareholders’
	Shares		Capital		Income (Loss)		Deficit		Equity
Balance, June 30, 2024	$	440	$	7,878,363	$	(466,322)	$	(6,719,348)	$	693,133
Share-based compensation		—		20,638		—		—		20,638
Net share settlement of restricted share units		—		(19)		—		—		(19)
Other comprehensive loss, net		—		—		(53,354)		—		(53,354)
Net income		—		—		—		474,932		474,932
Balance, September 30, 2024	$	440	$	7,898,982	$	(519,676)	$	(6,244,416)	$	1,135,330

	Nine Months Ended September 30, 2024
					Accumulated
			Additional		Other				Total
	Ordinary		Paid-in		Comprehensive		Accumulated		Shareholders’
	Shares		Capital		Income (Loss)		Deficit		Equity
Balance, December 31, 2023	$	425	$	7,708,957	$	(508,438)	$	(6,900,137)	$	300,807
Share-based compensation		—		65,570		—		—		65,570
Issuance of shares under employee related plans		4		(4)		—		—		—
Common share issuance for NCLC exchangeable notes		11		146,517		—		—		146,528
Net share settlement of restricted share units		—		(22,058)		—		—		(22,058)
Other comprehensive loss, net		—		—		(11,238)		—		(11,238)
Net income		—		—		—		655,721		655,721
Balance, September 30, 2024	$	440	$	7,898,982	$	(519,676)	$	(6,244,416)	$	1,135,330

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

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Norwegian Cruise Line Holdings Ltd.

Consolidated Statements of Changes in Shareholders’ Equity - Continued

(Unaudited)

(in thousands)


	Three Months Ended September 30, 2023
					Accumulated
			Additional		Other				Total
	Ordinary		Paid-in		Comprehensive		Accumulated		Shareholders’
	Shares		Capital		Income (Loss)		Deficit		Equity
Balance, June 30, 2023	$	425	$	7,661,646	$	(507,330)	$	(7,139,520)	$	15,221
Share-based compensation		—		23,563		—		—		23,563
Issuance of shares under employee related plans		—		2,689		—		—		2,689
Net share settlement of restricted share units		—		(48)		—		—		(48)
Common share issuance for NCLC exchangeable notes		—		10		—		—		10
Other comprehensive income, net		—		—		51,385		—		51,385
Net income		—		—		—		345,868		345,868
Balance, September 30, 2023	$	425	$	7,687,860	$	(455,945)	$	(6,793,652)	$	438,688

	Nine Months Ended September 30, 2023
					Accumulated
			Additional		Other				Total
	Ordinary		Paid-in		Comprehensive		Accumulated		Shareholders’
	Shares		Capital		Income (Loss)		Deficit		Equity
Balance, December 31, 2022	$	421	$	7,611,564	$	(477,079)	$	(7,066,315)	$	68,591
Share-based compensation		—		96,254		—		—		96,254
Issuance of shares under employee related plans		4		5,303		—		—		5,307
Common share issuance for NCLC exchangeable notes		—		10		—		—		10
Net share settlement of restricted share units		—		(25,271)		—		—		(25,271)
Other comprehensive income, net		—		—		21,134		—		21,134
Net income		—		—		—		272,663		272,663
Balance, September 30, 2023	$	425	$	7,687,860	$	(455,945)	$	(6,793,652)	$	438,688

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

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Norwegian Cruise Line Holdings Ltd.

Notes to Consolidated Financial Statements

(Unaudited)

Unless otherwise indicated or the context otherwise requires, references in this report to (i) the “Company,” “we,” “our” and “us” refer to NCLH (as defined below) and its subsidiaries, (ii) “NCLC” refers to NCL Corporation Ltd., (iii) “NCLH” refers to Norwegian Cruise Line Holdings Ltd., (iv) “Norwegian Cruise Line” or “Norwegian” refers to the Norwegian Cruise Line brand and its predecessors, (v) “Oceania Cruises” refers to the Oceania Cruises brand and (vi) “Regent” refers to the Regent Seven Seas Cruises brand.

References to the “U.S.” are to the United States of America, and “dollar(s)” or “$” are to U.S. dollars, the “U.K.” are to the United Kingdom and “euro(s)” or “€” are to the official currency of the Eurozone. 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.

1. 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. We have one Allura Class Ship on order for delivery in 2025. We also have orders for three new classes of ships: four Oceania Cruises ships with deliveries currently scheduled from 2027 through 2031, two Prestige Class Ships with deliveries currently scheduled in 2026 and 2029 and four Norwegian Cruise Line ships with deliveries currently scheduled from 2030 through 2036. The orders for two of the new class of Oceania Cruises ships currently scheduled for delivery in 2030 and 2031 are expected to be cancelled.

2. Summary of Significant Accounting Policies

Liquidity

As of September 30, 2024, we had liquidity of approximately $2.4 billion, including cash and cash equivalents of $332.5 million, borrowings available under our $1.2 billion undrawn Revolving Loan Facility, a €200 million commitment that can be used for future newbuild payments and a $650 million undrawn commitment of senior unsecured notes issuable by NCLC less related fees (see Note 8 – “Long-Term Debt” for further information regarding our commitments). We believe that we have sufficient liquidity to fund our obligations and expect to remain in compliance with our financial covenants for at least the next twelve months from the issuance of these financial statements.

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.

Basis of Presentation

The accompanying consolidated financial statements are unaudited and, in our opinion, contain all normal recurring adjustments necessary for a fair statement of the results for the periods presented.

Our operations are seasonal and results for interim periods are not necessarily indicative of the results for the entire fiscal year. Historically, demand for cruises has been strongest during the Northern Hemisphere’s summer months. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2023, which are included in our most recent Annual Report on Form 10-K filed with the SEC on February 28, 2024.

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Earnings Per Share

Basic earnings per share is computed by dividing net income by the basic weighted-average number of shares outstanding during each period. Diluted earnings per share is computed by dividing net income and assumed conversion of exchangeable notes by diluted weighted-average shares outstanding.

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


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Net income - Basic EPS	$	474,932	$	345,868	$	655,721	$	272,663
Effect of dilutive securities - exchangeable notes		14,965		17,510		48,323		13,809
Net income and assumed conversion of exchangeable notes - Diluted EPS	$	489,897	$	363,378	$	704,044	$	286,472
Basic weighted-average shares outstanding		439,697,135		425,398,415		433,790,997		424,087,517
Dilutive effect of share awards		3,333,627		3,676,562		3,201,373		2,594,108
Dilutive effect of exchangeable notes		71,848,157		82,510,468		77,009,661		34,137,750
Diluted weighted-average shares outstanding		514,878,919		511,585,445		514,002,031		460,819,375
Basic EPS	$	1.08	$	0.81	$	1.51	$	0.64
Diluted EPS	$	0.95	$	0.71	$	1.37	$	0.62

Each exchangeable note (see Note 8 – “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. 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.

Foreign Currency

The majority of our transactions are settled in U.S. dollars. We remeasure assets and liabilities denominated in foreign currencies at exchange rates in effect at the balance sheet date. 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. Remeasurements of foreign currency related to operating activities are recognized within changes in operating assets and liabilities in the consolidated statement of cash flows.

Depreciation and Amortization Expense

The amortization of deferred financing fees is included in depreciation and amortization expense in the consolidated statements of cash flows; 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.

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

3. Acquisition

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	$	4,302
Goodwill		37,630
Liabilities		(9,088)
Total consideration allocated, net of $4.7 million of cash acquired	$	32,844

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.

4. Revenue Recognition

Disaggregation of Revenue

Revenue and cash flows are affected by economic factors in various geographical regions. Revenues by destination were as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
North America	$	1,315,224	$	1,234,852	$	4,052,094	$	3,817,082
Europe		1,439,473		1,284,421		2,519,770		2,245,868
Asia-Pacific		50,294		15,972		565,823		311,524
Other		1,587		792		232,598		188,994
Total revenue	$	2,806,578	$	2,536,037	$	7,370,285	$	6,563,468

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North America includes the U.S., the Caribbean, Canada and Mexico. Europe includes the Baltic region, Canary Islands and Mediterranean. Asia-Pacific includes Australia, New Zealand and Asia. Other includes all other international territories.

Segment Reporting and Geographic Concentration

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

Although we sell cruises on an international basis, our passenger ticket revenue is primarily attributed to U.S.-sourced guests who make reservations through the U.S. Revenue attributable to U.S.-sourced guests has approximated 84-87% of total revenue over the preceding three fiscal years. No other individual country’s revenues exceed 10% in any given period.

Contract Balances

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.

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. 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.

5. Leases

Operating lease balances were as follows (in thousands):


	Balance Sheet location	September 30, 2024		December 31, 2023
Operating leases
Right-of-use assets	Other long-term assets	$	764,481	$	753,652
Current operating lease liabilities	Accrued expenses and other liabilities		27,939		23,226
Non-current operating lease liabilities	Other long-term liabilities		652,489		644,646

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6. 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
						Change
	Accumulated		Change			Related to
	Other		Related to			Shipboard
	Comprehensive		Cash Flow			Retirement
	Income (Loss)		Hedges			Plan
Accumulated other comprehensive income (loss) at beginning of period	$	(508,438)	$	(508,524)		$	86
Current period other comprehensive loss before reclassifications		(7,668)		(7,668)			—
Amounts reclassified into earnings		(3,570)		(3,853)	(1)		283	(2)
Accumulated other comprehensive income (loss) at end of period	$	(519,676)	$	(520,045)	(3)	$	369

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


	Nine Months Ended September 30, 2023
						Change
	Accumulated		Change			Related to
	Other		Related to			Shipboard
	Comprehensive		Cash Flow			Retirement
	Income (Loss)		Hedges			Plan
Accumulated other comprehensive income (loss) at beginning of period	$	(477,079)	$	(480,578)		$	3,499
Current period other comprehensive income before reclassifications		34,833		34,833			—
Amounts reclassified into earnings		(13,699)		(13,890)	(1)		191	(2)
Accumulated other comprehensive income (loss) at end of period	$	(455,945)	$	(459,635)		$	3,690

(1)	We refer you to Note 9 – “Fair Value Measurements and Derivatives” for the affected line items in the consolidated statements of operations.

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

(3)	Includes $43.9 million of losses expected to be reclassified into earnings in the next 12 months.

7.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.

8. 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

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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 addition, at any time and from time to time prior to the First Call Date, NCLC may redeem up to 40% of the aggregate principal amount of the 2030 Notes with the net proceeds of certain equity offerings at a redemption price equal to 106.250% of the principal amount of the 2030 Notes redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, so long as at least 60% of the aggregate principal amount of the 2030 Notes issued remains outstanding following such redemption. The 2030 Notes pay interest at 6.250% per annum, semiannually in arrears on March 1 and September 1 of each year, to holders of record at the close of business on the immediately preceding February 15 and August 15, respectively. The 2030 Notes indenture contains covenants that limit the ability of NCLC and its restricted subsidiaries to, among other things: (i) grant or assume certain liens; (ii) enter into sale leaseback transactions; and (iii) consolidate, merge, sell or otherwise dispose of all or substantially all of their assets.

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

Exchangeable Notes

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


			Unamortized
	Principal		Deferred		Net Carrying		Fair Value
	Amount		Financing Fees		Amount		Amount		Leveling
2025 Exchangeable Notes (1)	$	449,990	$	(2,137)	$	447,853	$	551,310	Level 2
2027 1.125% Exchangeable Notes		1,150,000		(13,730)		1,136,270		1,114,166	Level 2
2027 2.5% Exchangeable Notes		473,175

Norwegian Cruise Line Holdings Ltd. [NCLH] Filings
10-Q	[2024-11-07]
10-Q	[2024-08-08]
10-Q	[2024-05-07]
10-K	[2024-02-28]
10-Q	[2023-11-08]
10-Q	[2023-08-08]
10-Q	[2023-05-05]
10-K	[2023-02-28]
10-Q	[2022-11-08]
10-Q	[2022-08-09]
10-Q	[2022-05-10]
10-K	[2022-03-01]
10-Q	[2021-11-09]
10-Q	[2021-08-09]
10-Q	[2021-05-10]
10-K	[2021-02-26]
10-Q	[2020-11-09]
10-Q	[2020-08-10]
10-Q	[2020-05-15]
10-K	[2020-02-27]
10-Q	[2019-11-08]
10-Q	[2019-08-08]
10-Q	[2019-05-10]
10-K	[2019-02-27]
10-Q	[2018-11-09]
10-Q	[2018-08-09]
10-Q	[2018-05-07]
10-K	[2018-02-27]
10-Q	[2017-11-09]
10-Q	[2017-08-09]
10-Q	[2017-05-10]
10-K	[2017-02-27]
10-Q	[2016-11-09]
10-Q	[2016-08-09]
10-Q	[2016-05-10]
10-K	[2016-02-29]
10-Q	[2015-11-04]
10-Q	[2015-08-07]
10-Q	[2015-05-08]
10-K	[2015-02-27]
10-Q	[2014-10-31]
10-Q	[2014-07-31]
10-Q	[2014-05-01]
10-K	[2014-02-21]
S-1	[2013-11-20]
10-Q	[2013-10-31]
10-Q	[2013-07-30]
S-1	[2013-07-30]
10-Q	[2013-05-08]
10-K	[2013-02-20]