Norwegian Cruise Line Holdings Ltd 10-Q for FY2024 Q2

Norwegian Cruise Line Holdings Ltd. (NCLH)

10-Q 2024-08-08 For: 2024-06-30

Added on April 07, 2026

About this 10-Q

Norwegian Cruise Line Holdings Ltd filed this 10-Q on August 8, 2024, covering the quarter ended June 30, 2024 (FY2024 Q2).

Headline figures

Quarter ended June 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.37B; up 7.6% from $2.21B a year earlier
Net income: $163.44M; up 89.8% from net income of $86.12M a year earlier
Diluted EPS: $0.35; up 75.0% from $0.20 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	23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38

Item 4.	Controls and Procedures	39

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	39

Item 1A.	Risk Factors	39

Item 5.	Other Information	40

Item 6.	Exhibits	40

SIGNATURES		42


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Revenue
Passenger ticket	$	1,602,076	$	1,478,474	$	3,061,890	$	2,687,315
Onboard and other		770,416		727,018		1,501,817		1,340,116
Total revenue		2,372,492		2,205,492		4,563,707		4,027,431
Cruise operating expense
Commissions, transportation and other		501,039		506,855		937,249		916,539
Onboard and other		171,707		161,880		303,743		281,577
Payroll and related		330,578		308,220		674,859		612,375
Fuel		174,964		164,242		372,698		359,110
Food		77,046		87,770		161,754		183,736
Other		199,421		154,643		391,875		310,691
Total cruise operating expense		1,454,755		1,383,610		2,842,178		2,664,028
Other operating expense
Marketing, general and administrative		353,771		352,222		716,240		688,235
Depreciation and amortization		222,405		197,115		445,334		391,905
Total other operating expense		576,176		549,337		1,161,574		1,080,140
Operating income		341,561		272,545		559,955		283,263
Non-operating income (expense)
Interest expense, net		(178,472)		(177,692)		(396,649)		(348,949)
Other income (expense), net		1,896		(8,043)		20,033		(16,998)
Total non-operating income (expense)		(176,576)		(185,735)		(376,616)		(365,947)
Net income (loss) before income taxes		164,985		86,810		183,339		(82,684)
Income tax benefit (expense)		(1,549)		(694)		(2,550)		9,479
Net income (loss)	$	163,436	$	86,116	$	180,789	$	(73,205)
Weighted-average shares outstanding
Basic		434,807,434		424,178,775		430,805,477		423,421,203
Diluted		513,589,734		461,075,240		468,078,473		423,421,203
Earnings (loss) per share
Basic	$	0.38	$	0.20	$	0.42	$	(0.17)
Diluted	$	0.35	$	0.20	$	0.41	$	(0.17)


	June 30,		December 31,
	2024		2023
Assets
Current assets:
Cash and cash equivalents	$	594,098	$	402,415
Accounts receivable, net		209,343		280,271
Inventories		149,931		157,646
Prepaid expenses and other assets		628,970		472,816
Total current assets		1,582,342		1,313,148
Property and equipment, net		16,632,973		16,433,292
Goodwill		135,764		98,134
Trade names		500,525		500,525
Other long-term assets		1,262,229		1,147,891
Total assets	$	20,113,833	$	19,492,990
Liabilities and shareholders’ equity
Current liabilities:
Current portion of long-term debt	$	1,525,488	$	1,744,778
Accounts payable		182,451		174,338
Accrued expenses and other liabilities		1,146,858		1,058,919
Advance ticket sales		3,779,119		3,060,666
Total current liabilities		6,633,916		6,038,701
Long-term debt		11,913,073		12,314,147
Other long-term liabilities		873,711		839,335
Total liabilities		19,420,700		19,192,183
Commitments and contingencies (Note 11)
Shareholders’ equity:
Ordinary shares, $0.001 par value; 980,000,000 shares authorized; 439,686,822 shares issued and outstanding at June 30, 2024 and 425,546,570 shares issued and outstanding at December 31, 2023		440		425
Additional paid-in capital		7,878,363		7,708,957
Accumulated other comprehensive income (loss)		(466,322)		(508,438)
Accumulated deficit		(6,719,348)		(6,900,137)
Total shareholders’ equity		693,133		300,807
Total liabilities and shareholders’ equity	$	20,113,833	$	19,492,990


	Three Months Ended June 30, 2024
					Accumulated
			Additional		Other				Total
	Ordinary		Paid-in		Comprehensive		Accumulated		Shareholders’
	Shares		Capital		Income (Loss)		Deficit		Equity
Balance, March 31, 2024	$	429	$	7,708,869	$	(464,423)	$	(6,882,784)	$	362,091
Share-based compensation		—		22,984		—		—		22,984
Common share issuance for NCLC exchangeable notes		11		146,517		—		—		146,528
Net share settlement of restricted share units		—		(7)		—		—		(7)
Other comprehensive loss, net		—		—		(1,899)		—		(1,899)
Net income		—		—		—		163,436		163,436
Balance, June 30, 2024	$	440	$	7,878,363	$	(466,322)	$	(6,719,348)	$	693,133

	Six Months Ended June 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		—		44,932		—		—		44,932
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		—		(22,039)		—		—		(22,039)
Other comprehensive income, net		—		—		42,116		—		42,116
Net income		—		—		—		180,789		180,789
Balance, June 30, 2024	$	440	$	7,878,363	$	(466,322)	$	(6,719,348)	$	693,133


	Three Months Ended June 30, 2023
					Accumulated
			Additional		Other				Total
	Ordinary		Paid-in		Comprehensive		Accumulated		Shareholders’
	Shares		Capital		Income (Loss)		Deficit		Equity (Deficit)
Balance, March 31, 2023	$	424	$	7,631,028	$	(505,364)	$	(7,225,636)	$	(99,548)
Share-based compensation		—		44,536		—		—		44,536
Issuance of shares under employee related plans		1		(1)		—		—		—
Net share settlement of restricted share units		—		(13,917)		—		—		(13,917)
Other comprehensive loss, net		—		—		(1,966)		—		(1,966)
Net income		—		—		—		86,116		86,116
Balance, June 30, 2023	$	425	$	7,661,646	$	(507,330)	$	(7,139,520)	$	15,221

	Six Months Ended June 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		—		72,691		—		—		72,691
Issuance of shares under employee related plans		4		2,614		—		—		2,618
Net share settlement of restricted share units		—		(25,223)		—		—		(25,223)
Other comprehensive loss, net		—		—		(30,251)		—		(30,251)
Net loss		—		—		—		(73,205)		(73,205)
Balance, June 30, 2023	$	425	$	7,661,646	$	(507,330)	$	(7,139,520)	$	15,221


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


	Balance Sheet location	June 30, 2024		December 31, 2023
Operating leases
Right-of-use assets	Other long-term assets	$	761,106	$	753,652
Current operating lease liabilities	Accrued expenses and other liabilities		23,348		23,226
Non-current operating lease liabilities	Other long-term liabilities		651,555		644,646


	Six Months Ended June 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 income before reclassifications		48,410		48,410			—
Amounts reclassified into earnings		(6,294)		(6,483)	(1)		189	(2)
Accumulated other comprehensive income (loss) at end of period	$	(466,322)	$	(466,597)	(3)	$	275


			Unamortized
	Principal		Deferred		Net Carrying		Fair Value
	Amount		Financing Fees		Amount		Amount		Leveling
2025 Exchangeable Notes	$	449,990	$	(2,801)	$	447,189	$	533,751	Level 2
2027 1.125% Exchangeable Notes		1,150,000		(15,165)		1,134,835		1,074,399	Level 2
2027 2.5% Exchangeable Notes		473,175		(6,670)		466,505		454,310	Level 2


Year	Amount
Remainder of 2024	$	1,070,650
2025		1,324,074
2026		2,240,090
2027		3,301,519
2028		1,708,911
2029		1,924,201
Thereafter		2,190,104
Total	$	13,759,549


		Assets				Liabilities
		June 30,		December 31,		June 30,		December 31,
	Balance Sheet Location	2024		2023		2024		2023
Derivative Contracts Designated as Hedging Instruments

Fuel contracts
	Prepaid expenses and other assets	$	17,081	$	—	$	609	$	—
	Other long-term assets		4,454		—		550		—
	Accrued expenses and other liabilities		—		4,309		—		11,247
	Other long-term liabilities		—		137		15		8,932
Foreign currency contracts
	Prepaid expenses and other assets		122		—		—		—
Total derivatives designated as hedging instruments		$	21,657	$	4,446	$	1,174	$	20,179

Derivative Contracts Not Designated as Hedging Instruments

Fuel contracts
	Prepaid expenses and other assets	$	19	$	—	$	61	$	—
	Accrued expenses and other liabilities		—		141		—		1,031
	Other long-term liabilities		—		—		—		280

Total derivatives not designated as hedging instruments		$	19	$	141	$	61	$	1,311
Total derivatives		$	21,676	$	4,587	$	1,235	$	21,490


			Gross				Gross
	Gross		Amounts		Total Net		Amounts
June 30, 2024	Amounts		Offset		Amounts		Not Offset		Net Amounts
Assets	$	21,676	$	(1,220)	$	20,456	$	(122)	$	20,334
Liabilities		15		—		15		—		15


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Coupon interest	$	13,308	$	14,437	$	27,745	$	28,875
Amortization of deferred financing fees		2,709		2,856		5,612		5,499
Total	$	16,017	$	17,293	$	33,357	$	34,374


					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
	June 30, 2024		June 30, 2023			June 30, 2024		June 30, 2023
Fuel contracts	$	1,035	$	(12,055)	Fuel	$	6,838	$	572
Fuel contracts		—		—	Other income (expense), net		432		(306)
Foreign currency contracts		122		7,478	Depreciation and amortization		(4,120)		(2,813)
Total gain (loss) recognized in other comprehensive loss	$	1,157	$	(4,577)		$	3,150	$	(2,547)


					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)
	Six Months		Six Months			Six Months		Six Months
	Ended		Ended			Ended		Ended
	June 30, 2024		June 30, 2023			June 30, 2024		June 30, 2023
Fuel contracts	$	48,288	$	(41,070)	Fuel	$	13,415	$	13,169
Fuel contracts		—		—	Other income (expense), net		1,307		(343)
Foreign currency contracts		122		18,018	Depreciation and amortization		(8,239)		(5,499)
Total gain (loss) recognized in other comprehensive loss	$	48,410	$	(23,052)		$	6,483	$	7,327


	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	4,673,132		19.25	945,040		19.29
Vested	(4,292,171)		18.85	(334,888)		31.78
Forfeited or expired	(167,226)		17.39	—		—
Non-vested as of June 30, 2024	9,296,855		17.66	2,750,286		17.86


	Three Months Ended June 30, 2024						Three Months Ended June 30, 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	$	174,964	$	222,405	$	1,896	$	164,242	$	197,115	$	(8,043)

Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (expense)
Fuel contracts		6,838		—		—		572		—		—
Foreign currency contracts		—		(4,120)		—		—		(2,813)		—

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		—		—		432		—		—		(306)


							Weighted-
	Number of Share Option Awards		Weighted-Average Exercise Price				Average	Aggregate
	Time-	Performance-	Time-		Performance-		Contractual	Intrinsic
	Based	Based	Based		Based		Term	Value
	Awards	Awards	Awards		Awards		(years)	(in thousands)
Outstanding as of January 1, 2024	3,524,856	114,583	$	52.98	$	59.43	1.26	$	—
Forfeited and cancelled	(1,011,038)	(114,583)		50.91		59.43
Outstanding as of June 30, 2024	2,513,818	—		53.81		—	1.06		—


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	Prestige Class	Seven Seas Prestige	~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	Prestige Class	To come	~77,000	~850	Contract effective / financed⁽⁴⁾
2030	Norwegian Cruise Line	New Class	To come	~225,000	~5,100	Memorandum of agreement subject to Board of Director approval. Financing is being negotiated. ⁽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	~225,000	~5,100	Memorandum of agreement subject to Board of Director approval. Financing is being negotiated. ⁽⁵⁾
2034	Norwegian Cruise Line	New Class	To come	~225,000	~5,100	Memorandum of agreement subject to Board of Director approval. Financing is being negotiated. ⁽⁵⁾
2036	Norwegian Cruise Line	New Class	To come	~225,000	~5,100	Memorandum of agreement subject to Board of Director approval. Financing is being negotiated. ⁽⁵⁾


	Remainder of
	2024		2025		2026		2027		2028		2029		Thereafter		Total
Long-term debt (1)	$	1,382,059	$	1,894,344	$	2,709,802	$	3,658,048	$	1,961,084	$	2,061,227	$	2,402,170	$	16,068,734
Ship construction contracts (2)		235,228		2,026,241		2,165,579		2,190,155		2,104,462		825,383		1,619,109		11,166,157
Total	$	1,617,287	$	3,920,585	$	4,875,381	$	5,848,203	$	4,065,546	$	2,886,610	$	4,021,279	$	27,234,891







10.1			Norwegian Cruise Line Holdings Ltd. Amended and Restated 2013 Performance Incentive Plan (incorporated herein by reference to Exhibit 10.1 to Norwegian Cruise Line Holdings Ltd.’s Form 8-K filed on June 14, 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))#

31.1*			Certification of the President and Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
31.2*			Certification of the Executive Vice President and Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
32.1**			Certifications of the President and Chief Executive Officer and the Executive Vice President and Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code


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 June 30, 2024, formatted in Inline XBRL:

		(i) the Consolidated Statements of Operations for the three and six months ended June 30, 2024 and 2023;

		(ii) the Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2024 and 2023;

		(iii) the Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023;

		(iv) the Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023;

		(v) the Consolidated Statements of Changes in Shareholders’ Equity (Deficit) for the three and six months ended June 30, 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 June 30, 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: August 8, 2024