Norwegian Cruise Line Holdings Reports Financial Results for the Fourth Quarter and Full Year 2015
Robust Pricing Results in 7.4% Increase in Fourth Quarter Combined Company Adjusted Net Yield
Record Revenue Drives 27% Increase in Full Year 2015 Adjusted EPS
Strong Full Year 2016 Earnings Growth of Approximately 30%
Fourth Quarter 2015 Highlights
- Adjusted EPS growth of 42% to
$0.51 on Adjusted Net Income of$117.3 million . - Constant Currency Adjusted Net Yield on a Combined Company basis increased 7.4% (5.9% as reported), driven primarily by strong growth in pricing from same fleet operations as well as a partial quarter benefit from the addition of Norwegian Escape. Adjusted Net Yield on a Constant Currency basis increased 16.9% (15.2% as reported).
- Thirtieth consecutive quarter of Adjusted EBITDA growth.
- Approximately
$100 million , or 1.7 million shares repurchased during the quarter under previously authorized three-year,$500 million share repurchase program. - Inclusion in the
NASDAQ -100 Index.
Full Year 2015 Highlights
- Adjusted EPS growth of 27% to
$2.88 on Adjusted Net Income of$662.7 million . - Revenue increase of 39.0% to
$4.3 billion compared to$3.1 billion in 2014. - Increase in Constant Currency Adjusted Net Yield on a Combined Company basis of 3.7% (2.0%, as reported), driven primarily by strong pricing performance from same fleet operations. Adjusted Net Yield increased 20.0% on a Constant Currency basis (18.0% as reported).
- Company's Adjusted Return on
Invested Capital of 9% surpasses Weighted Average Cost of Capital. - Successful
launch of the Company's largest ship to date, Norwegian Escape.
- Announcement of customized newbuild dedicated to the
China market to launch in mid-2017.
Full Year 2016 Targets and Highlights
- Strong booked position continues into Wave season with encouraging early trends for 2017.
- Strength in the
Caribbean ,Alaska andBermuda markets more than offset softness in Mediterranean itineraries. - Anticipated strong earnings growth with Adjusted EPS projected
to increase approximately 30% resulting in a four-year compounded annual growth rate of approximately 40%.
- Adjusted Net Yield expected to increase approximately 4% on a Constant Currency basis, 3.5% as reported.
- Adjusted ROIC projected to reach double digits in 2016 and on pace to reach target of 14% in 2018, doubling the metric from the time of the Company's initial public offering in 2013.
- Revenue expected to double from the time of the Company's initial public offering to
$5.0 billion . - Two ships will join the fleet - Sirena will join
Oceania Cruises in the second quarter and the new Seven Seas Explorer will joinRegent Seven Seas Cruises in the third quarter. - Launch of "Feel Free", Norwegian Cruise Line's
new global brand campaign.
- Announced ship enhancement programs for
Regent Seven Seas Cruises and The Norwegian Edge™ forNorwegian Cruise Line .
"By all accounts, 2015 was a truly successful year for Norwegian - a year which included strong net yield growth driven primarily by the go to market strategies aimed at driving demand that were introduced earlier in the year and the successful launch of the largest ship in our fleet, Norwegian Escape," said
Fourth Quarter 2015 Results
The Company generated Adjusted Net Income of
On a Combined Company basis, which compares current results against the combined results of Norwegian and
On a Combined Company basis, Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased 5.9% on a Constant Currency
basis (4.8% as reported), primarily as a result of two lengthy scheduled dry-docks in the quarter compared to the prior year which had no dry-docks in the period. Adjusted Net Cruise Costs Excluding Fuel per Capacity Day increased 17.8% on a Constant Currency basis (16.6% on as reported), primarily as a result of the Acquisition of Prestige. The Company's fuel price per metric ton, net of hedges, decreased 15.0% to
The Company repurchased approximately
Full Year 2015 Results
The Company reported a 27% increase in Adjusted EPS to
On a Combined Company basis, Adjusted Net Yield on a Constant Currency basis increased 3.7% (2.0% as reported), reflecting improved pricing mainly as a result of the aforementioned strategies to drive demand. The Acquisition of Prestige along with improved overall pricing resulted in an improvement of Adjusted Net Yield on a Constant Currency basis of 20.0% (18.0% as reported).
On a Combined Company Constant Currency basis Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased 3.8% (2.9% as reported). On a Constant Currency basis the metric increased 25.0% (24.0% as reported). The Company's fuel price per metric ton, net of hedges, decreased 13.8% to
Interest expense, net was
2016 Outlook
As a result of its post-acquisition strategies to drive demand, the Company entered the year in a solid booked position with more than 50% of overall 2016 inventory sold which is significantly ahead of the same time last year. The Company is seeing this trend continue into next year where the current booked position for the first half of 2017 is approximately 30% higher compared to this time last year on a capacity increase of approximately 5%.
"Our strong booked
position coming into the year provides us more pricing leverage during Wave season and beyond for remaining inventory than in years past," said Del Rio. "Our core itineraries in the
The Company will take delivery of two ships in 2016. Sirena will join the Oceania Cruises' fleet in March with her first sailing in late April following an extensive, multi-million dollar upgrade and refurbishment. Seven Seas Explorer, the first newbuild for Regent in over thirteen years, will join the fleet in the third quarter.
In the first quarter of 2016, the Company executed a purchase and sale agreement for the Company's interest in certain land-based operations in
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||||||||
| Adjusted Net Yield | $ | 202.75 | $ | 226.63 | $ | 262.54 | $ | 207.80 | $ | 225.00 | ||||||||||
| Adjusted Net Cruise Cost Excluding Fuel per Capacity Day | $ | 123.19 | $ | 115.75 | $ | 117.57 | $ | 113.68 | $ | 117.47 | ||||||||||
| Adjusted EPS | $ | 0.27 | $ | 0.74 | $ | 1.35 | $ | 0.51 | $ | 2.87 | ||||||||||
2016 Guidance and Sensitivities
In addition to announcing the results for 2015, the Company also provided guidance for the first quarter and full year 2016, which excludes the results of the aforementioned land-based operations in
| First Quarter 2016 (1) | Full Year 2016 (1) | |||||||||||||||||
| As Reported | Constant Currency | As Reported | Constant Currency | |||||||||||||||
| Adjusted Net Yield | Approx. 1.75% | Approx. 2.5% | Approx. 3.5% | Approx. 4.0% | ||||||||||||||
| Adjusted Net Cruise Cost Excluding Fuel per Capacity Day | Approx. 1.75% | Approx. 2.0% | Approx. 2.25% | Approx. 2.5% | ||||||||||||||
| Adjusted EPS | ||||||||||||||||||
| Adjusted Depreciation and Amortization (2) | ||||||||||||||||||
| Interest Expense, net | ||||||||||||||||||
| Effect on Adjusted EPS of a 1% change in Adjusted Net Yield (3) | $ | 0.04 | $ | 0.17 | ||||||||||||||
| (1) Excludes results from the Company's interest in certain land-based operations in | ||||||||||||||||||
| (2) Excludes | ||||||||||||||||||
| (3) Based on midpoint of guidance | ||||||||||||||||||
The following reflects the Company's expectations regarding fuel consumption and pricing, along with accompanying sensitivities.
| First Quarter 2016 | Full Year 2016 | ||||||
| Fuel consumption in metric tons | 185,000 | 725,000 | |||||
| Fuel price per metric ton, excluding hedges | $ | 260 | $ | 290 | |||
| Fuel price per metric ton, net of hedges | $ | 450 | $ | 470 | |||
| Effect on Adjusted EPS of a 10% change in fuel prices, net of hedges | $ | 0.005 | $ | 0.02 | |||
As of
Future capital commitments consist of contracted commitments, including ship construction contracts, and future expected capital expenditures necessary for operations. As of
Company Updates and Other Business Highlights
The Norwegian Edge™ and
Launch of Norwegian Cruise Line's Global Brand Campaign, "Feel Free"
Norwegian Cruise Line Announces Summer 2017 Deployment Offerings in
As part of the Company's itinerary diversification strategy, the Company announced Norwegian Cruise Line's summer 2017 deployment offerings in
Conference Call
The Company has scheduled a conference call for
About
With a combined fleet of 22 ships with approximately 45,000 berths, these brands offer itineraries to more than 510 destinations worldwide. The Company will introduce five additional ships through 2019.
Terminology
Acquisition of Prestige. In
Adjusted Depreciation and Amortization. Depreciation and amortization adjusted to exclude amortization of intangible assets related to the Acquisition of Prestige.
Adjusted EBITDA. EBITDA adjusted for other income (expense) and other supplemental adjustments.
Adjusted EPS. Adjusted Net Income divided by the number of diluted weighted-average shares outstanding.
Adjusted Free Cash Flow. Free Cash Flow adjusted for proceeds from ship construction financing facilities and other supplemental adjustments.
Adjusted Interest Expense, net. Interest expense, net adjusted to exclude one-time costs associated with early debt extinguishments.
Adjusted Net Cruise Cost Excluding Fuel.
Adjusted Net Income. Net income adjusted for supplemental adjustments.
Adjusted Net Revenue. Net Revenue adjusted for supplemental adjustments.
Adjusted Net Yield. Net Yield adjusted for supplemental adjustments.
Adjusted Return on
Berths. Double occupancy capacity per stateroom (single occupancy per studio stateroom) even though many staterooms can accommodate three or more passengers.
Breakaway Class Ships. Norwegian Breakaway and Norwegian Getaway.
Breakaway Plus Class Ships. The next generation of ships which are similar in design and innovation to Breakaway Class Ships.
Capacity Days. Available Berths multiplied by the number of cruise days for the period.
Combined Company. Combined financial results of Norwegian and Prestige for 2014.
Constant Currency. A calculation whereby foreign currency-denominated revenues and expenses in a period are converted at the
EBITDA. Earnings before interest, taxes, depreciation and amortization.
EPS. Earnings per share.
Free Cash Flow. Net cash provided by operating activities less capital expenditures for ship construction, business enhancements and other.
GAAP. Generally accepted accounting principles in the
Gross Cruise Cost. The sum of total cruise operating expense and marketing, general and administrative expense.
Gross Yield. Total revenue per Capacity Day.
Management NCL Corporation Units.
Merger Agreement. Agreement and Plan of Merger, dated
as of
Net Cruise Cost Excluding Fuel.
Net Revenue. Total revenue less commissions, transportation and other expense and onboard and other expense.
Net Yield. Net Revenue per Capacity Day.
Occupancy Percentage or Load Factor. The ratio of Passenger Cruise Days to Capacity Days. A percentage in excess of 100% indicates that three or more passengers occupied some staterooms.
Passenger Cruise Days. The number of passengers carried for the period, multiplied by the number of days in their respective cruises.
Secondary Equity Offering(s). Secondary public offering(s) of NCLH's ordinary shares.
Shipboard Retirement Plan. An unfunded defined benefit pension plan for certain crew members which computes benefits based on years of service, subject to certain requirements.
Weighted Average Cost of Capital. Calculation of cost of capital in which each category of capital is proportionately weighted.
Non-GAAP Financial Measures
We use certain non-GAAP financial measures, such as Net Revenue, Adjusted Net Revenue, Net Yield, Adjusted Net Yield,
As our business includes the sourcing of passengers and deployment of vessels outside of the
We believe that Adjusted EBITDA is appropriate as a supplemental financial measure as it is used by management to assess operating performance. We believe that Adjusted EBITDA is a useful measure in determining our performance as it reflects certain operating drivers of our business, such as sales growth, operating costs, marketing, general and administrative expense and other operating income and expense. Adjusted EBITDA is not a defined term under GAAP. Adjusted EBITDA is not 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 Revenue and Adjusted Net Yield, which excludes certain business combination accounting entries, are non-GAAP financial measures that we believe are useful as supplemental measures in evaluating the performance of our operating business and provide greater transparency into our results of operations. Adjusted Net Income and Adjusted EPS are non-GAAP financial measures that exclude certain amounts and are used to supplement GAAP net income and EPS. We use Adjusted Net Income and Adjusted EPS as key performance measures of our earnings performance. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparison to our historical performance. Our management believes the presentation of Adjusted ROIC, a non-GAAP financial measure, provides a useful performance metric for evaluating our effective use of capital. In addition, management uses this measure as a component of our incentive compensation. The amounts excluded in the presentation of these non-GAAP financial measures may vary from period to period; accordingly, our presentation of Adjusted Net Revenue, Adjusted Net Yield, Adjusted Net Income, Adjusted EPS and Adjusted ROIC may not be indicative of future adjustments or results.
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. In evaluating our non-GAAP financial measures, you should be aware that in the future we may incur expenses similar to the adjustments in our presentation. Our non-GAAP financial measures have limitations as analytical tools, and you should not consider these measures in isolation or as a substitute for analysis of our results as reported under GAAP. Our presentation of our non-GAAP financial measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our non-GAAP financial measures may not be comparable to other companies. Please see a historical reconciliation of these measures to the most comparable GAAP measure presented in our consolidated financial statements below.
Cautionary Statement Concerning Forward-Looking Statements
Certain statements in this release constitute forward-looking statements within the meaning of the
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| (in thousands, except share and per share data) | |||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
| Revenue | |||||||||||||||||||||
| Passenger ticket | $ | 722,542 | $ | 548,469 | $ | 3,129,075 | $ | 2,176,153 | |||||||||||||
| Onboard and other | 313,981 | 240,440 | 1,215,973 | 949,728 | |||||||||||||||||
| Total revenue | 1,036,523 | 788,909 | 4,345,048 | 3,125,881 | |||||||||||||||||
| Cruise operating expense | |||||||||||||||||||||
| Commissions, transportation and other | 175,447 | 129,006 | 765,298 | 503,722 | |||||||||||||||||
| Onboard and other | 62,101 | 51,220 | 272,802 | 224,000 | |||||||||||||||||
| Payroll and related | 175,857 | 131,261 | 666,110 | 452,647 | |||||||||||||||||
| Fuel | 90,866 | 89,478 | 358,650 | 326,231 | |||||||||||||||||
| Food | 47,672 | 43,004 | 179,641 | 168,240 | |||||||||||||||||
| Other | 105,805 | 74,651 | 412,948 | 271,784 | |||||||||||||||||
| Total cruise operating expense | 657,748 | 518,620 | 2,655,449 | 1,946,624 | |||||||||||||||||
| Other operating expense | |||||||||||||||||||||
| Marketing, general and administrative | 143,120 | 139,585 | 554,999 | 403,169 | |||||||||||||||||
| Depreciation and amortization | 117,733 | 84,262 | 432,114 | 273,147 | |||||||||||||||||
| Total other operating expense | 260,853 | 223,847 | 987,113 | 676,316 | |||||||||||||||||
| Operating income | 117,922 | 46,442 | 702,486 | 502,941 | |||||||||||||||||
| Non-operating income (expense) | |||||||||||||||||||||
| Interest expense, net | (68,690 | ) | (56,438 | ) | (221,909 | ) | (151,754 | ) | |||||||||||||
| Other expense | (11,079 | ) | (14,158 | ) | (46,668 | ) | (10,853 | ) | |||||||||||||
| Total non-operating income (expense) | (79,769 | ) | (70,596 | ) | (268,577 | ) | (162,607 | ) | |||||||||||||
| Net income (loss) before income taxes | 38,153 | (24,154 | ) | 433,909 | 340,334 | ||||||||||||||||
| Income tax benefit (expense) | 159 | (1,494 | ) | (6,772 | ) | 2,267 | |||||||||||||||
| Net income (loss) | 38,312 | (25,648 | ) | 427,137 | 342,601 | ||||||||||||||||
| Net income (loss) attributable to non-controlling interest | - | (39 | ) | - | 4,249 | ||||||||||||||||
| Net income (loss) attributable to | $ | 38,312 | $ | (25,609 | ) | $ | 427,137 | $ | 338,352 | ||||||||||||
| Weighted-average shares outstanding | |||||||||||||||||||||
| Basic | 228,922,432 | 212,698,622 | 226,591,437 | 206,524,968 | |||||||||||||||||
| Diluted | 230,153,510 | 212,698,622 | 230,040,132 | 212,017,784 | |||||||||||||||||
| Earnings (loss) per share | |||||||||||||||||||||
| Basic | $ | 0.17 | $ | (0.12 | ) | $ | 1.89 | $ | 1.64 | ||||||||||||
| Diluted | $ | 0.17 | $ | (0.12 | ) | $ | 1.86 | $ | 1.62 | ||||||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| (in thousands) | |||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||||
| Net income (loss) | $ | 38,312 | $ | (25,648 | ) | $ | 427,137 | $ | 342,601 | ||||||||||
| Other comprehensive loss: | |||||||||||||||||||
| Shipboard Retirement Plan | 744 | (2,595 | ) | 1,102 | (2,311 | ) | |||||||||||||
| Cash flow hedges: | |||||||||||||||||||
| Net unrealized loss | (124,351 | ) | (194,076 | ) | (262,852 | ) | (238,436 | ) | |||||||||||
| Amount realized and reclassified into earnings | 30,160 | 11,529 | 91,742 | 13,354 | |||||||||||||||
| Total other comprehensive loss | (93,447 | ) | (185,142 | ) | (170,008 | ) | (227,393 | ) | |||||||||||
| Total comprehensive income (loss) | (55,135 | ) | (210,790 | ) | 257,129 | 115,208 | |||||||||||||
| Comprehensive income (loss) attributable to non-controlling interest | - | (1,018 | ) | - | 2,808 | ||||||||||||||
| Total comprehensive income (loss) attributable to
| $ | (55,135 | ) | $ | (209,772 | ) | $ | 257,129 | $ | 112,400 | |||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||
| (Unaudited) | |||||||||
| (in thousands, except share data) | |||||||||
| 2015 | 2014 | ||||||||
| Assets | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 115,937 | $ | 84,824 | |||||
| Accounts receivable, net | 44,996 | 32,432 | |||||||
| Inventories | 58,173 | 56,555 | |||||||
| Prepaid expenses and other assets | 121,305 | 109,924 | |||||||
| Total current assets | 340,411 | 283,735 | |||||||
| Property and equipment, net | 9,458,805 | 8,623,773 | |||||||
| 1,388,931 | 1,388,931 | ||||||||
| Tradenames | 817,525 | 817,525 | |||||||
| Other long-term assets | 259,085 | 355,032 | |||||||
| Total assets | $ | 12,264,757 | $ | 11,468,996 | |||||
| Liabilities and shareholders' equity | |||||||||
| Current liabilities: | |||||||||
| Current portion of long-term debt | $ | 629,840 | $ | 576,947 | |||||
| Accounts payable | 51,369 | 101,983 | |||||||
| Accrued expenses and other liabilities | 640,568 | 552,514 | |||||||
| Due to affiliate | 20,769 | 37,948 | |||||||
| Advance ticket sales | 1,023,973 | 817,207 | |||||||
| Total current liabilities | 2,366,519 | 2,086,599 | |||||||
| Long-term debt | 5,767,697 | 5,503,076 | |||||||
| Due to affiliate | - | 18,544 | |||||||
| Other long-term liabilities | 349,661 | 341,964 | |||||||
| Total liabilities | 8,483,877 | 7,950,183 | |||||||
| Commitments and contingencies | |||||||||
| Shareholders' equity: | |||||||||
| Ordinary shares, | 232 | 230 | |||||||
| Additional paid-in capital | 3,814,536 | 3,702,344 | |||||||
| Accumulated other comprehensive income (loss) | (412,650 | ) | (242,642 | ) | |||||
| Retained earnings | 568,018 | 140,881 | |||||||
| (189,256 | ) | (82,000 | ) | ||||||
| Total shareholders' equity | 3,780,880 | 3,518,813 | |||||||
| Total liabilities and shareholders' equity | $ | 12,264,757 | $ | 11,468,996 | |||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
| (Unaudited) | |||||||||||||
| (in thousands) | |||||||||||||
| Year Ended | |||||||||||||
| 2015 | 2014 | ||||||||||||
| Cash flows from operating activities | |||||||||||||
| Net income | $ | 427,137 | $ | 342,601 | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||
| Depreciation and amortization expense | 450,335 | 304,877 | |||||||||||
| Loss on derivatives | 26,525 | 7,274 | |||||||||||
| Deferred income taxes, net | 1,269 | 6,187 | |||||||||||
| Gain on contingent consideration | (43,400 | ) | - | ||||||||||
| Write-off of financing fees | 4,070 | 15,628 | |||||||||||
| Provision
for bad debts and inventory | 5,029 | - | |||||||||||
| Share-based compensation expense | 42,209 | 14,617 | |||||||||||
| Changes in operating assets and liabilities excluding the impact of the Acquisition of Prestige: | |||||||||||||
| Accounts receivable, net | (14,803 | ) | (7,256 | ) | |||||||||
| Inventories | (4,408 | ) | (261 | ) | |||||||||
| Prepaid expenses and other assets | (8,583 | ) | (6,373 | ) | |||||||||
| Accounts payable | (50,730 | ) | 315 | ||||||||||
| Accrued expenses and other liabilities | (7,544 | ) | (18,061 | ) | |||||||||
| Advance ticket sales | 218,260 | (23,947 | ) | ||||||||||
| Payment of original issue discount | (1,647 | ) | - | ||||||||||
| Net cash provided by operating activities | 1,043,719 | 635,601 | |||||||||||
| Cash flows from investing activities | |||||||||||||
| Acquisition of Prestige, net of cash received | - | (826,686 | ) | ||||||||||
| Additions to property and equipment, net | (1,124,525 | ) | (964,640 | ) | |||||||||
| Settlement of derivatives | (83,519 | ) | (5,334 | ) | |||||||||
| Investment in intangible asset | (750 | ) | - | ||||||||||
| Net cash used in investing activities | (1,208,794 | ) | (1,796,660 | ) | |||||||||
| Cash flows from financing activities | |||||||||||||
| Repayments of long-term debt | (1,569,313 | ) | (1,688,720 | ) | |||||||||
| Repayments to affiliate | (37,042 | ) | (37,043 | ) | |||||||||
| Proceeds from long-term debt | 1,855,809 | 3,107,721 | |||||||||||
| Proceeds from the exercise of share options | 69,127 | 5,857 | |||||||||||
| Proceeds from employee share purchase plan | 858 | - | |||||||||||
| Purchases of treasury shares | (107,256 | ) | (82,000 | ) | |||||||||
| NCLC partnership tax distributions | - | (218 | ) | ||||||||||
| Deferred financing fees and other | (15,995 | ) | (116,181 | ) | |||||||||
| Net cash provided by financing activities | 196,188 | 1,189,416 | |||||||||||
| Net increase in cash and cash equivalents | 31,113 | 28,357 | |||||||||||
| Cash and cash equivalents at beginning of the year | 84,824 | 56,467 | |||||||||||
| Cash and cash equivalents at end of the year | $ | 115,937 | $ | 84,824 | |||||||||
| NON-GAAP RECONCILING INFORMATION | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| The following table sets forth selected statistical information: | |||||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||
| Passengers carried | 549,191 | 476,650 | 2,164,404 | 1,933,044 | |||||||||||||||||||
| Passenger Cruise Days | 4,102,250 | 3,554,855 | 16,027,743 | 13,634,200 | |||||||||||||||||||
| Capacity Days | 3,813,830 | 3,398,468 | 14,700,990 | 12,512,459 | |||||||||||||||||||
| Occupancy Percentage | 107.6 | % | 104.6 | % | 109.0 | % | 109.0 | % | |||||||||||||||
| Net Revenue, Adjusted Net Revenue, Gross Yield, Net Yield and Adjusted Net Yield were calculated as follows (in thousands, except Capacity Days and Yield data): | |||||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||||
| 2015 | 2015 | ||||||||||||||||||||||
| Constant | Constant | ||||||||||||||||||||||
| 2015 | Currency | 2014 | 2015 | Currency | 2014 | ||||||||||||||||||
| Passenger ticket revenue | $ | 722,542 | $ | 739,018 | $ | 548,469 | $ | 3,129,075 | $ | 3,203,661 | $ | 2,176,153 | |||||||||||
| Onboard and other revenue | 313,981 | 313,981 | 240,440 | 1,215,973 | 1,215,973 | 949,728 | |||||||||||||||||
| Total revenue | 1,036,523 | 1,052,999 | 788,909 | 4,345,048 | 4,419,634 | 3,125,881 | |||||||||||||||||
| Less: | |||||||||||||||||||||||
| Commissions, transportation and other expense | 175,447 | 179,884 | 129,006 | 765,298 | 783,891 | 503,722 | |||||||||||||||||
| Onboard and other expense | 62,101 | 62,101 | 51,220 | 272,802 | 272,802 | 224,000 | |||||||||||||||||
| Net Revenue | 798,975 | 811,014 | 608,683 | 3,306,948 | 3,362,941 | 2,398,159 | |||||||||||||||||
| Non-GAAP Adjustment: | |||||||||||||||||||||||
| Deferred revenue (1) | 917 | 917 | 10,052 | 32,431 | 32,431 | 10,052 | |||||||||||||||||
| Adjusted Net Revenue | $ | 799,892 | $ | 811,931 | $ | 618,735 | $ | 3,339,379 | $ | 3,395,372 | $ | 2,408,211 | |||||||||||
| Capacity Days | 3,813,830 | 3,813,830 | 3,398,468 | 14,700,990 | 14,700,990 | 12,512,459 | |||||||||||||||||
| Gross Yield | $ | 271.78 | $ | 276.10 | $ | 232.14 | $ | 295.56 | $ | 300.64 | $ | 249.82 | |||||||||||
| Net Yield | $ | 209.49 | $ | 212.65 | $ | 179.11 | $ | 224.95 | $ | 228.76 | $ | 191.66 | |||||||||||
| Adjusted Net Yield | $ | 209.73 | $ | 212.89 | $ | 182.06 | $ | 227.15 | $ | 230.96 | $ | 192.47 | |||||||||||
| (1) Reflects deferred revenue fair value adjustments related to the Acquisition of Prestige that were made pursuant to business combination accounting rules. | |||||||||||||||||||||||
| Gross Cruise Cost, | |||||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||||
| 2015 | 2015 | ||||||||||||||||||||||
| Constant | Constant | ||||||||||||||||||||||
| 2015 | Currency | 2014 | 2015 | Currency | 2014 | ||||||||||||||||||
| Total cruise operating expense | $ | 657,748 | $ | 665,405 | $ | 518,620 | $ | 2,655,449 | $ | 2,683,776 | $ | 1,946,624 | |||||||||||
| Marketing, general and administrative expense | 143,120 | 144,478 | 139,585 | 554,999 | 560,376 | 403,169 | |||||||||||||||||
| Gross Cruise Cost | 800,868 | 809,883 | 658,205 | 3,210,448 | 3,244,152 | 2,349,793 | |||||||||||||||||
| Less: | |||||||||||||||||||||||
| Commissions, transportation and other expense | 175,447 | 179,884 | 129,006 | 765,298 | 783,891 | 503,722 | |||||||||||||||||
| Onboard and other expense | 62,101 | 62,101 | 51,220 | 272,802 | 272,802 | 224,000 | |||||||||||||||||
| 563,320 | 567,898 | 477,979 | 2,172,348 | 2,187,459 | 1,622,071 | ||||||||||||||||||
| Less: Fuel expense | 90,866 | 90,866 | 89,478 | 358,650 | 358,650 | 326,231 | |||||||||||||||||
| Net Cruise Cost Excluding Fuel | 472,454 | 477,032 | 388,501 | 1,813,698 | 1,828,809 | 1,295,840 | |||||||||||||||||
| Less Non-GAAP Adjustments: | |||||||||||||||||||||||
| Crew expenses (1) | 4,395 | 4,395 | 2,549 | 10,154 | 10,154 | 7,693 | |||||||||||||||||
| Non-cash share-based compensation (2) | 14,354 | 14,354 | 11,075 | 42,211 | 42,211 | 20,627 | |||||||||||||||||
| Secondary Equity Offerings' expenses (3) | 842 | 842 | - | 2,226 | 2,226 | 2,075 | |||||||||||||||||
| Severance payments and other fees (4) | 2,535 | 2,535 | - | 17,580 | 17,580 | - | |||||||||||||||||
| Management NCL Corporation Units exchange expenses (5) | - | - | - | 624 | 624 | - | |||||||||||||||||
| Acquisition of Prestige expenses (6) | 9,781 | 9,781 | 37,245 | 27,170 | 27,170 | 57,513 | |||||||||||||||||
| Contingent consideration adjustment (7) | - | - | - | (43,400 | ) | (43,400 | ) | - | |||||||||||||||
| Contract termination expenses (8) | - | - | - | 3,319 | 3,319 | - | |||||||||||||||||
| Other (9) | - | - | 861 | - | - | 3,804 | |||||||||||||||||
| Adjusted Net Cruise Cost Excluding Fuel | $ | 440,547 | $ | 445,125 | $ | 336,771 | $ | 1,753,814 | $ | 1,768,925 | $ | 1,204,128 | |||||||||||
| Capacity Days | 3,813,830 | 3,813,830 | 3,398,468 | 14,700,990 | 14,700,990 | 12,512,459 | |||||||||||||||||
| Gross Cruise Cost per Capacity Day | $ | 209.99 | $ | 212.35 | $ | 193.68 | $ | 218.38 | $ | 220.68 | $ | 187.80 | |||||||||||
| $ | 147.70 | $ | 148.90 | $ | 140.65 | $ | 147.77 | $ | 148.80 | $ | 129.64 | ||||||||||||
| Net Cruise Cost Excluding Fuel per Capacity Day | $ | 123.88 | $ | 125.08 | $ | 114.32 | $ | 123.37 | $ | 124.40 | $ | 103.56 | |||||||||||
| Adjusted Net Cruise Cost Excluding Fuel per Capacity Day | $ | 115.51 | $ | 116.71 | $ | 99.09 | $ | 119.30 | $ | 120.33 | $ | 96.23 | |||||||||||
| (1) Non-cash deferred compensation expenses related to the crew pension plan and other crew expenses, which are included in payroll and related expense. | |||||||||||||||||||||||
| (2) Non-cash share-based compensation expense related
to equity awards, which are included in marketing, general and administrative expense. | |||||||||||||||||||||||
| (3) Expenses related to the Secondary Equity Offerings, which are included in marketing, general and administrative expense. | |||||||||||||||||||||||
| (4) Severance payments and other expenses related to restructuring costs and other severance arrangements, which are included in marketing, general and administrative expense. | |||||||||||||||||||||||
| (5) Expenses related to the exchange of Management NCL Corporation Units for ordinary shares, which are included in marketing, general and administrative expense. | |||||||||||||||||||||||
| (6) Expenses related to the
Acquisition of Prestige, which are included in marketing, general and administrative expense. | |||||||||||||||||||||||
| (7) Contingent consideration fair value adjustment related to the Acquisition of Prestige, which is included in marketing, general and administrative expense. | |||||||||||||||||||||||
| (8) Contract termination expenses related to the Acquisition of Prestige, which are included in other cruise operating expense. | |||||||||||||||||||||||
| (9) Expenses primarily related to the Corporate Reorganization and the settlement of a 2007 breach of contract claim, which are included in marketing, general and administrative expense. | |||||||||||||||||||||||
| NON-GAAP RECONCILING INFORMATION | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Adjusted Net Income and Adjusted EPS were calculated as follows (in thousands, except share and per share data): | |||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||
| Net income (loss) attributable to | $ | 38,312 | $ | (25,609 | ) | $ | 427,137 | $ | 338,352 | ||||||||
| Net income (loss) attributable to non-controlling interest | - | (39 | ) | - | 4,249 | ||||||||||||
| Net income (loss) | 38,312 | (25,648 | ) | 427,137 | 342,601 | ||||||||||||
| Non-GAAP Adjustments: | |||||||||||||||||
| Crew expenses (1) | 4,395 | 2,549 | 10,154 | 7,693 | |||||||||||||
| Non-cash share-based compensation (2) | 14,354 | 11,075 | 42,384 | 20,627 | |||||||||||||
| Secondary Equity Offerings' expenses (3) | 842 | - | 2,226 | 2,075 | |||||||||||||
| Taxes related to changes in corporate structure (4) | - | 10,551 | - | 5,247 | |||||||||||||
| Severance payments and other fees (5) | 2,535 | - | 17,580 | - | |||||||||||||
| Debt related expenses (6) | - | 15,397 | - | 15,397 | |||||||||||||
| Management NCL Corporation Units exchange expenses (7) | - | - | 624 | - | |||||||||||||
| Acquisition of Prestige expenses (8) | 9,781 | 37,245 | 27,170 | 57,513 | |||||||||||||
| Deferred revenue (9) | 917 | 13,004 | 32,431 | 13,004 | |||||||||||||
| Amortization of intangible assets (10) | 12,944 | 12,600 | 72,917 | 12,600 | |||||||||||||
| Contingent consideration adjustment (11) | - | - | (43,400 | ) | - | ||||||||||||
| Loss on extinguishment of debt (12) | 12,624 | - | 12,624 | - | |||||||||||||
| Derivative loss (13) | 7,601 | - | 40,971 | - | |||||||||||||
| Contract termination expenses (14) | - | - | 6,848 | - | |||||||||||||
| Information technology write-off (15) | 12,988 | - | 12,988 | - | |||||||||||||
| Other (16) | - | 861 | - | 3,804 | |||||||||||||
| Adjusted Net Income | $ | 117,293 | $ | 77,634 | $ | 662,654 | $ | 480,561 | |||||||||
| Diluted weighted-average shares outstanding - Net income (loss) | 212,698,622 | (17 | ) | ||||||||||||||
| Diluted weighted-average shares outstanding - Adjusted Net income | 230,153,510 | 218,009,812 | 230,040,132 | 212,017,784 | |||||||||||||
| Diluted earnings (loss) per share | $ | 0.17 | $ | (0.12 | ) | $ | 1.86 | $ | 1.62 | ||||||||
| Adjusted EPS | $ | 0.51 | $ | 0.36 | $ | 2.88 | $ | 2.27 | |||||||||
| (1) Non-cash deferred compensation expenses related to the crew pension plan, and other crew expenses which are included in payroll and related expense. | |||||||||||||||||
| (2) Non-cash share-based compensation expense related to equity awards, which are included in marketing, general and administrative expense. | |||||||||||||||||
| (3) Expenses related to the Secondary Equity Offerings, which are included in marketing, general and administrative expense. | |||||||||||||||||
| (4) Taxes related to the change in our corporate entity structure, which are included in income tax benefit (expense). | |||||||||||||||||
| (5) Severance payments and other expenses related to restructuring costs and other severance arrangements, which are included in marketing, general and administrative expense. | |||||||||||||||||
| (6) Write-off of deferred financing fees, premiums paid and other expenses related to prepayments of debt, which are included in interest expense, net. | |||||||||||||||||
| (7) Expenses related to the exchange of Management NCL Corporation Units for ordinary shares, which are included in marketing, general and administrative expense. | |||||||||||||||||
| (8) Expenses related to the Acquisition of Prestige, which are primarily included in marketing, general and administrative expense. | |||||||||||||||||
| (9) Deferred revenue fair value adjustments related to the Acquisition of Prestige that were made pursuant to business combination accounting rules, which are primarily included in Net Revenue. | |||||||||||||||||
| (10) Amortization of intangible assets related to the Acquisition of Prestige, which are included in depreciation and amortization expense. | |||||||||||||||||
| (11) Contingent consideration fair value adjustment related to the Acquisition of Prestige, which is included in marketing, general and administrative expense. | |||||||||||||||||
| (12) Loss on extinguishment of debt, which is included in interest expense, net. | |||||||||||||||||
| (13) Losses of approximately | |||||||||||||||||
| (14) Contract termination expenses related to the Acquisition of Prestige, which are included in other cruise operating expense and depreciation and amortization expense. | |||||||||||||||||
| (15) Expenses related to the write-off of certain information technology items, which are included in depreciation and amortization expense. | |||||||||||||||||
| (16) Expenses primarily related with the tax restructuring and costs related to the settlement of a 2007 breach of contract claim, which are included in marketing, general and administrative expense. | |||||||||||||||||
| (17) Due to a net loss excludes 5,311,190 shares, as including these would be antidilutive. | |||||||||||||||||
| EBITDA and Adjusted EBITDA were calculated as follows (in thousands): | |||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||
| Net income (loss) attributable to | $ | 38,312 | $ | (25,609 | ) | $ | 427,137 | $ | 338,352 | ||||||||
| Interest expense, net | 68,690 | 56,438 | 221,909 | 151,754 | |||||||||||||
| Income tax (benefit) expense | (159 | ) | 1,494 | 6,772 | (2,267 | ) | |||||||||||
| Depreciation and amortization expense | 117,733 | 84,262 | 432,114 | 273,147 | |||||||||||||
| EBITDA | 224,576 | 116,585 | 1,087,932 | 760,986 | |||||||||||||
| Net income (loss) attributable to non-controlling interest | - | (39 | ) | - | 4,249 | ||||||||||||
| Other expense | 11,079 | 14,158 | 46,668 | 10,853 | |||||||||||||
| Non-GAAP Adjustments: | |||||||||||||||||
| Crew expenses (1) | 4,395 | 2,549 | 10,154 | 7,693 | |||||||||||||
| Non-cash share-based compensation (2) | 14,354 | 11,075 | 42,211 | 20,627 | |||||||||||||
| Secondary Equity Offerings' expenses (3) | 842 | - | 2,226 | 2,075 | |||||||||||||
| Severance payments and other fees (4) | 2,535 | - | 17,580 | - | |||||||||||||
| Management NCL Corporation Units exchange expenses (5) | - | - | 624 | - | |||||||||||||
| Acquisition of Prestige expenses (6) | 9,781 | 37,245 | 27,170 | 57,513 | |||||||||||||
| Deferred revenue (7) | 917 | 10,052 | 32,431 | 10,052 | |||||||||||||
| Contingent consideration adjustment (8) | - | - | (43,400 | ) | - | ||||||||||||
| Contract termination expenses (9) | - | - | 3,319 | - | |||||||||||||
| Other (10) | - | 861 | - | 3,804 | |||||||||||||
| Adjusted EBITDA | $ | 268,479 | $ | 192,486 | $ | 1,226,915 | $ | 877,852 | |||||||||
| (1) Non-cash deferred compensation expenses related to the crew pension plan and other crew expenses, which are included in payroll and related expense. | |||||||||||||||||
| (2) Non-cash share-based compensation expense related to equity awards, which are included in marketing, general and administrative expense. | |||||||||||||||||
| (3) Expenses related to the Secondary Equity Offerings, which are included in marketing, general and administrative expense. | |||||||||||||||||
| (4) Severance payments and other expenses related to restructuring costs and other severance arrangements, which are included in marketing, general and administrative expense. | |||||||||||||||||
| (5) Expenses related to the exchange of Management NCL Corporation Units for ordinary shares, which are included in marketing, general and administrative expense. | |||||||||||||||||
| (6) Expenses related to the Acquisition of Prestige, which are included in marketing, general and administrative expense. | |||||||||||||||||
| (7) Deferred revenue fair value adjustments related to the Acquisition of Prestige that were made pursuant to business combination accounting rules, which are primarily included in Net Revenue. | |||||||||||||||||
| (8) Contingent consideration fair value adjustment related to the Acquisition of Prestige, which is included in marketing general and administrative expense. | |||||||||||||||||
| (9) Contract termination expenses related to the Acquisition of Prestige, which are included in other cruise operating expense. | |||||||||||||||||
| (10) Expenses primarily related with the tax restructuring and costs related to the settlement of a 2007 breach of contract claim, which are included in marketing, general and administrative expense. | |||||||||||||||||
| NON-GAAP RECONCILING INFORMATION | |||||||
| (Unaudited) | |||||||
| 2015 | 2014 | ||||||
| Long-term debt, net of current portion | $ | 5,767,697 | $ | 5,503,076 | |||
| Current portion of long-term | 629,840 | 576,947 | |||||
| Total debt | 6,397,537 | 6,080,023 | |||||
| Less: Cash and cash equivalents | 115,937 | 84,824 | |||||
| Net Debt | 6,281,600 | 5,995,199 | |||||
| Total shareholders' equity | 3,780,880 | 3,518,813 | |||||
| Net Debt and shareholders' equity | $ | 10,062,480 | $ | 9,514,012 | |||
| 62.4 | % | 63.0 | % | ||||
| Adjusted Free Cash Flow was calculated as follows (in thousands): | |||||||
| Year Ended | |||||||
| 2015 | 2014 | ||||||
| Net cash provided by operating activities | $ | 1,043,719 | $ | 635,601 | |||
| Less: Capital expenditures for ship construction | (902,251 | ) | (892,185 | ) | |||
| Less: Capital expenditures for business enhancements and other | (222,274 | ) | (72,455 | ) | |||
| Free Cash Flow | (80,806 | ) | (329,039 | ) | |||
| Proceeds from ship construction financing facilities | 686,756 | 818,062 | |||||
| Adjusted Free Cash Flow | $ | 605,950 | $ | 489,023 | |||
| Adjusted Return On Invested Capital was calculated as follows (in thousands): | |||||||
|
Year Ended | |||||||
| 2015 | |||||||
| Adjusted EBITDA (1) | $ | 1,226,915 | |||||
| Less: Adjusted Depreciation | (359,197 | ) | |||||
| Total | $ | 867,718 | |||||
| Total debt and shareholders' equity (2) | 9,651,780 | ||||||
| Adjusted Return On Invested Capital | 9.0 | % | |||||
| (1) See the reconciliation of Net income to Adjusted EBITDA presented within. | |||||||
| (2) Calculation consists of a four quarter average of debt and shareholders' equity. Debt includes certain amounts due to affiliate. | |||||||
Investor Relations ContactAndrea DeMarco (305) 468-2463 InvestorRelations@ncl.com Media ContactsJason Lasecki (305) 514-3912Vanessa Picariello (305) 436-4713 PublicRelations@ncl.com
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