Norwegian Cruise Line Holdings Ltd 10-Q for FY2024 Q1

Norwegian Cruise Line Holdings Ltd. (NCLH)

10-Q 2024-05-07 For: 2024-03-31

Added on April 07, 2026

About this 10-Q

Norwegian Cruise Line Holdings Ltd filed this 10-Q on May 7, 2024, covering the quarter ended March 31, 2024 (FY2024 Q1).

Headline figures

Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.19B; up 20.3% from $1.82B a year earlier
Net income: $17.35M; compared with a net loss of $159.32M a year earlier
Diluted EPS: $0.04; compared with -$0.38 a year earlier

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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)

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


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


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34

Item 4.	Controls and Procedures	35

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	35

Item 1A.	Risk Factors	35

Item 5.	Other Information	36

Item 6.	Exhibits	36

SIGNATURES		38


	Three Months Ended
	March 31,
	2024		2023
Revenue
Passenger ticket	$	1,459,814	$	1,208,841
Onboard and other		731,401		613,098
Total revenue		2,191,215		1,821,939
Cruise operating expense
Commissions, transportation and other		436,210		409,684
Onboard and other		132,036		119,697
Payroll and related		344,281		304,155
Fuel		197,734		194,868
Food		84,708		95,966
Other		192,454		156,048
Total cruise operating expense		1,387,423		1,280,418
Other operating expense
Marketing, general and administrative		362,469		336,013
Depreciation and amortization		222,929		194,790
Total other operating expense		585,398		530,803
Operating income		218,394		10,718
Non-operating income (expense)
Interest expense, net		(218,177)		(171,257)
Other income (expense), net		18,137		(8,955)
Total non-operating income (expense)		(200,040)		(180,212)
Net income (loss) before income taxes		18,354		(169,494)
Income tax benefit (expense)		(1,001)		10,173
Net income (loss)	$	17,353	$	(159,321)
Weighted-average shares outstanding
Basic		426,803,519		422,655,215
Diluted		431,019,206		422,655,215
Earnings (loss) per share
Basic	$	0.04	$	(0.38)
Diluted	$	0.04	$	(0.38)


	March 31,		December 31,
	2024		2023
Assets
Current assets:
Cash and cash equivalents	$	559,814	$	402,415
Accounts receivable, net		282,313		280,271
Inventories		157,879		157,646
Prepaid expenses and other assets		590,148		472,816
Total current assets		1,590,154		1,313,148
Property and equipment, net		16,463,522		16,433,292
Goodwill		98,134		98,134
Trade names		500,525		500,525
Other long-term assets		1,172,853		1,147,891
Total assets	$	19,825,188	$	19,492,990
Liabilities and shareholders’ equity
Current liabilities:
Current portion of long-term debt	$	1,744,221	$	1,744,778
Accounts payable		204,971		174,338
Accrued expenses and other liabilities		1,019,620		1,058,919
Advance ticket sales		3,629,707		3,060,666
Total current liabilities		6,598,519		6,038,701
Long-term debt		12,005,296		12,314,147
Other long-term liabilities		859,282		839,335
Total liabilities		19,463,097		19,192,183
Commitments and contingencies (Note 9)
Shareholders’ equity:
Ordinary shares, $0.001 par value; 980,000,000 shares authorized; 429,025,827 shares issued and outstanding at March 31, 2024 and 425,546,570 shares issued and outstanding at December 31, 2023		429		425
Additional paid-in capital		7,708,869		7,708,957
Accumulated other comprehensive income (loss)		(464,423)		(508,438)
Accumulated deficit		(6,882,784)		(6,900,137)
Total shareholders’ equity		362,091		300,807
Total liabilities and shareholders’ equity	$	19,825,188	$	19,492,990


	Three Months Ended March 31, 2024
					Accumulated
			Additional		Other				Total
	Ordinary		Paid-in		Comprehensive		Accumulated		Shareholders’
	Shares		Capital		Income (Loss)		Deficit		Equity (Deficit)
Balance, December 31, 2023	$	425	$	7,708,957	$	(508,438)	$	(6,900,137)	$	300,807
Share-based compensation		—		21,948		—		—		21,948
Issuance of shares under employee related plans		4		(4)		—		—		—
Net share settlement of restricted share units		—		(22,032)		—		—		(22,032)
Other comprehensive income, net		—		—		44,015		—		44,015
Net income		—		—		—		17,353		17,353
Balance, March 31, 2024	$	429	$	7,708,869	$	(464,423)	$	(6,882,784)	$	362,091


	Three Months Ended March 31, 2023
					Accumulated
			Additional		Other				Total
	Ordinary		Paid-in		Comprehensive		Accumulated		Shareholders’
	Shares		Capital		Income (Loss)		Deficit		Equity (Deficit)
Balance, December 31, 2022	$	421	$	7,611,564	$	(477,079)	$	(7,066,315)	$	68,591
Share-based compensation		—		28,155		—		—		28,155
Issuance of shares under employee related plans		3		2,615		—		—		2,618
Net share settlement of restricted share units		—		(11,306)		—		—		(11,306)
Other comprehensive loss, net		—		—		(28,285)		—		(28,285)
Net loss		—		—		—		(159,321)		(159,321)
Balance, March 31, 2023	$	424	$	7,631,028	$	(505,364)	$	(7,225,636)	$	(99,548)


	Balance Sheet location	March 31, 2024		December 31, 2023
Operating leases
Right-of-use assets	Other long-term assets	$	764,045	$	753,652
Current operating lease liabilities	Accrued expenses and other liabilities		29,043		23,226
Non-current operating lease liabilities	Other long-term liabilities		648,487		644,646


	Three Months Ended March 31, 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 income before reclassifications		47,253		47,253			—
Amounts reclassified into earnings		(3,238)		(3,333)	(1)		95	(2)
Accumulated other comprehensive income (loss) at end of period	$	(464,423)	$	(464,604)	(3)	$	181


			Unamortized
	Principal		Deferred		Net Carrying		Fair Value
	Amount		Financing Fees		Amount		Amount		Leveling
2024 Exchangeable Notes (1)	$	146,601	$	(193)	$	146,408	$	224,238	Level 2
2025 Exchangeable Notes		449,990		(3,383)		446,607		581,270	Level 2
2027 1.125% Exchangeable Notes		1,150,000		(16,544)		1,133,456		1,098,273	Level 2
2027 2.5% Exchangeable Notes		473,175		(7,254)		465,921		464,540	Level 2


Year	Amount
Remainder of 2024	$	1,569,504
2025		1,321,130
2026		2,234,657
2027		3,291,131
2028		1,697,619
2029		1,911,513
Thereafter		2,064,110
Total	$	14,089,664


		Assets				Liabilities
		March 31,		December 31,		March 31,		December 31,
	Balance Sheet Location	2024		2023		2024		2023
Derivative Contracts Designated as Hedging Instruments

Fuel contracts
	Prepaid expenses and other assets	$	22,725	$	—	$	109	$	—
	Other long-term assets		2,839		—		410		—
	Accrued expenses and other liabilities		—		4,309		—		11,247
	Other long-term liabilities		—		137		—		8,932
Total derivatives designated as hedging instruments		$	25,564	$	4,446	$	519	$	20,179

Derivative Contracts Not Designated as Hedging Instruments

Fuel contracts
	Prepaid expenses and other assets	$	—	$	—	$	45	$	—
	Accrued expenses and other liabilities		—		141		—		1,031
	Other long-term liabilities		—		—		—		280

Total derivatives not designated as hedging instruments		$	—	$	141	$	45	$	1,311
Total derivatives		$	25,564	$	4,587	$	564	$	21,490


			Gross				Gross
	Gross		Amounts		Total Net		Amounts
March 31, 2024	Amounts		Offset		Amounts		Not Offset		Net Amounts
Assets	$	25,564	$	(564)	$	25,000	$	—	$	25,000


					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
Derivatives	Comprehensive Loss				Income (Expense)	(Loss) into Income (Expense)
	Three Months		Three Months			Three Months		Three Months
	Ended		Ended			Ended		Ended
	March 31, 2024		March 31, 2023			March 31, 2024		March 31, 2023
Fuel contracts	$	47,253	$	(29,015)	Fuel	$	6,577	$	12,597
Fuel contracts		—		—	Other income (expense), net		875		(37)
Foreign currency contracts		—		10,540	Depreciation and amortization		(4,119)		(2,686)
Total gain (loss) recognized in other comprehensive loss	$	47,253	$	(18,475)		$	3,333	$	9,874


	Three Months Ended
	March 31,
	2024		2023
North America	$	1,560,772	$	1,361,053
Europe		25,236		81,318
Asia-Pacific		397,002		205,662
Other		208,205		173,906
Total revenue	$	2,191,215	$	1,821,939


	Three Months Ended
	March 31,
	2024		2023
Coupon interest	$	14,437	$	14,438
Amortization of deferred financing fees		2,903		2,643
Total	$	17,340	$	17,081


	Number of	Weighted-		Number of	Weighted-
	Time-Based	Average Grant		Performance-	Average Grant
	Awards	Date Fair Value		Based Awards	Date Fair Value
Non-vested as of January 1, 2024	9,083,120	$	17.39	2,140,134	$	19.41
Granted	4,619,945		19.27	945,040		19.29
Vested	(4,288,932)		18.84	(334,888)		31.78
Forfeited or expired	(113,048)		17.44	—		—
Non-vested as of March 31, 2024	9,301,085		17.66	2,750,286		17.86


Year	Amount
Remainder of 2024	$	390,355
2025		2,040,804
2026		2,181,145
2027		2,205,897
2028		2,119,588
2029		831,316
Thereafter		1,630,747
Total minimum annual payments	$	11,399,852


	Three Months Ended March 31, 2024						Three Months Ended March 31, 2023
			Depreciation						Depreciation
			and		Other Income				and		Other Income
	Fuel		Amortization		(Expense), net		Fuel		Amortization		(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	$	197,734	$	222,929	$	18,137	$	194,868	$	194,790	$	(8,955)

Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (expense)
Fuel contracts		6,577		—		—		12,597		—		—
Foreign currency contracts		—		(4,119)		—		—		(2,686)		—

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		—		—		875		—		—		(37)



		Three Months Ended
		March 31,
	Location of Gain (Loss)	2024		2023
Derivatives not designated as hedging instruments
Fuel contracts	Other income (expense), net	$	2,199	$	(596)


Year	Brand	Class	Ship Name	Gross Tons⁽¹⁾	Berths⁽¹⁾	Status
2025	Norwegian Cruise Line	Next Generation Prima Class	Norwegian Aqua	~156,000	~3,550	Contract effective / financed⁽⁴⁾
2025	Oceania Cruises	Allura Class	Allura	~68,000	~1,250	Contract effective / financed⁽⁴⁾
2026	Norwegian Cruise Line	Next Generation Prima Class	To come	~156,000	~3,550	Contract effective / financed⁽⁴⁾

2026	Regent Seven Seas	New Class	To come	~77,000	~850	Contract effective / financed⁽⁴⁾
2027	Norwegian Cruise Line	Next Gen ”Methanol-Ready⁽²⁾”Prima Class	To come	~169,000	~3,850	Contract effective / financed⁽⁴⁾
2027	Oceania Cruises	New Class	To come	~86,000	~1,450	Contract effective / financed⁽⁴⁾
2028	Norwegian Cruise Line	Next Gen ”Methanol-Ready⁽²⁾”Prima Class	To come	~169,000	~3,850	Contract effective / financed⁽⁴⁾
Expected 2029⁽³⁾	Oceania Cruises	New Class	To come	~86,000	~1,450	Contract effective / financed⁽⁴⁾
2029	Regent Seven Seas	New Class	To come	~77,000	~850	Contract effective / financed⁽⁴⁾
2030	Norwegian Cruise Line	New Class	To come	~200,000	~5,000	Contract not yet effective / subject to financing⁽⁵⁾
2030	Oceania Cruises	New Class	—	~86,000	~1,450	Contract effective, but not financed. Order expected to be cancelled and replaced by listed Norwegian Cruise Line orders from 2030 – 2036⁽⁵⁾
2031	Oceania Cruises	New Class	—	~86,000	~1,450	Contract effective, but not financed. Order expected to be cancelled and replaced by listed Norwegian Cruise Line orders from 2030 - 2036⁽⁵⁾
2032	Norwegian Cruise Line	New Class	To come	~200,000	~5,000	Contract not yet effective / subject to financing⁽⁵⁾
2034	Norwegian Cruise Line	New Class	To come	~200,000	~5,000	Contract not yet effective / subject to financing⁽⁵⁾
2036	Norwegian Cruise Line	New Class	To come	~200,000	~5,000	Contract not yet effective / subject to financing⁽⁵⁾


	Remainder of
	2024		2025		2026		2027		2028		2029		Thereafter		Total
Long-term debt (1)	$	1,961,710	$	1,882,085	$	2,695,301	$	3,638,843	$	1,941,473	$	2,040,805	$	2,239,004	$	16,399,221
Ship construction contracts (2)		190,481		1,861,993		1,297,001		1,244,929		1,159,580		—		—		5,753,984
Total	$	2,152,191	$	3,744,078	$	3,992,302	$	4,883,772	$	3,101,053	$	2,040,805	$	2,239,004	$	22,153,205







10.1			Third Amended and Restated Commitment Letter, dated as of February 23, 2024 and effective as of March 11, 2024, among NCL Corporation Ltd. and the purchasers named therein (incorporated herein by reference to Exhibit 10.1 to Norwegian Cruise Line Holdings Ltd.’s Form 8-K filed on March 12, 2024 (File No. 001-35784))

10.2			SACE Facility Agreement, dated April 4, 2024, among Oceania Next I, LLC, as borrower, NCL Corporation Ltd., as guarantor, the lenders party thereto, Banco Santander, S.A., BNP Paribas, Caixabank S.A., Cassa Depositi e Prestiti S.P.A., Crédit Agricole Corporate and Investment Bank, KFW Ipex-Bank GMBH, as joint mandated lead arrangers, and Crédit Agricole Corporate and Investment Bank, as facility agent, ECA agent and security agent (incorporated herein by reference to Exhibit 10.1 to Norwegian Cruise Line Holdings Ltd.’s Form 8-K filed on April 8, 2024 (File No. 001-35784))#

10.3			SACE Facility Agreement, dated April 4, 2024, among Oceania Next II, LLC, as borrower, NCL Corporation Ltd., as guarantor, the lenders party thereto, Banco Santander, S.A., BNP Paribas, Caixabank S.A., Cassa Depositi e Prestiti S.P.A., Crédit Agricole Corporate and Investment Bank, HSBC Bank PLC, JPMorgan Chase Bank, N.A., London Branch, KFW Ipex-Bank GMBH, as joint mandated lead arrangers, and Crédit Agricole Corporate and Investment Bank, as facility agent, ECA agent and security agent (incorporated herein by reference to Exhibit 10.2 to Norwegian Cruise Line Holdings Ltd.’s Form 8-K filed on April 8, 2024 (File No. 001-35784))#

10.4			SACE Facility Agreement, dated April 4, 2024, among DaVinci One, LLC, as borrower, NCL Corporation Ltd., as guarantor, the lenders party thereto, Banco Santander, S.A., BNP Paribas, Caixabank S.A., Cassa Depositi e Prestiti S.P.A., Citibank, N.A. London Branch, Crédit Agricole Corporate and Investment Bank, KFW Ipex-Bank GMBH, as joint mandated lead arrangers, and Crédit Agricole Corporate and Investment Bank, as facility agent, ECA agent and security agent (incorporated herein by reference to Exhibit 10.3 to Norwegian Cruise Line Holdings Ltd.’s Form 8-K filed on April 8, 2024 (File No. 001-35784))#

10.5			SACE Facility Agreement, dated April 4, 2024, among DaVinci Two, LLC, as borrower, NCL Corporation Ltd., as guarantor, the lenders party thereto, Banco Santander, S.A., BNP Paribas, Caixabank S.A., Cassa Depositi e Prestiti S.P.A., Crédit Agricole Corporate and Investment Bank, HSBC Bank PLC, JPMorgan Chase Bank, N.A., London Branch, KFW Ipex-Bank GMBH, as joint mandated lead arrangers, and Crédit Agricole Corporate and Investment Bank, as facility agent, ECA agent and security agent (incorporated herein by reference to Exhibit 10.4 to Norwegian Cruise Line Holdings Ltd.’s Form 8-K filed on April 8, 2024 (File No. 001-35784))#

10.6			Form of Norwegian Cruise Line Holdings Ltd. Time-based Restricted Share Unit Award Agreement (2024)†

10.7			Form of Norwegian Cruise Line Holdings Ltd. Performance-based Restricted Share Unit Award Agreement (2024)†

31.1*			Certification of the President and Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934


101*		The following unaudited consolidated financial statements from Norwegian Cruise Line Holdings Ltd.’s Quarterly Report on Form 10‑Q for the quarterly period ended March 31, 2024, formatted in Inline XBRL:

		(i) the Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023;

		(ii) the Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2024 and 2023;

		(iii) the Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023;

		(iv) the Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023;

		(v) the Consolidated Statements of Changes in Shareholders’ Equity (Deficit) for the three months ended March 31, 2024 and 2023; and

		(vi) the Notes to the Consolidated Financial Statements.

104*		The cover page from Norwegian Cruise Line Holdings Ltd.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline XBRL and included in the interactive data files submitted as Exhibit 101.


	NORWEGIAN CRUISE LINE HOLDINGS LTD.
	(Registrant)

	By:	/s/ HARRY SOMMER
	Name:	Harry Sommer
	Title:	President and Chief Executive Officer
		(Principal Executive Officer)

	By:	/s/ MARK A. KEMPA
	Name:	Mark A. Kempa
	Title:	Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)


Dated: May 7, 2024