Norwegian Cruise Line Holdings Reports Financial Results for the Second Quarter 2018
Company Reports Record Second Quarter Revenue and Earnings
Strong Global Demand Environment and Revenue Initiatives Drive Increase in
Company’s Growth Profile Extended with Confirmation of Two Additional Leonardo Class Ships for Delivery in 2026 and 2027
Company Executed
Highlights
- The Company generated GAAP net income of
$226.7 million or EPS of$1.01 compared to$198.5 million or$0.87 in the prior year. Adjusted Net Income was$271.9 million or Adjusted EPS of$1.21 compared to$232.7 million or$1.02 in the prior year. Adjusted EPS outperformed guidance by$0.19 .
- Total revenue increased 13.2% to
$1.5 billion . Gross Yield increased 4.3%. Net Yield increased 4.0% on a Constant Currency basis, outperforming guidance by 200 basis points.
- The Company expects to generate record earnings for full year 2018 and has increased its outlook above the high end of its previous guidance range, with Adjusted EPS now expected to be in the range of
$4.70 to $4.80 . This includes an expected$0.10 impact, split evenly between revenue and expense, as a result of the recently announced itinerary optimization initiatives which will benefit future periods. Excluding this impact, the midpoint of Adjusted EPS guidance would have increased to approximately$4.85 .
- 2018 full year Net Yield growth guidance on a Constant Currency basis increased 75 basis points from prior guidance to approximately 3.25%, or 125 basis points from the Company’s initial full year outlook provided in February.
“The continuation of the robust booking environment from our core source markets, combined with the successful execution of demand creation strategies drove higher pricing across all three brands, resulting in second quarter revenue, yield and earnings growth well above expectations,” said
Second Quarter 2018 Results
GAAP net income was
Revenue increased 13.2% to
Total cruise operating expense increased 14.7% in 2018 compared to 2017 primarily due to the increase in Capacity Days. Gross Cruise Costs per Capacity Day increased 6.0% due to an increase in maintenance and repairs including Dry-dock expenses and an increase in marketing, general and administrative expenses. Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased 7.4% on a Constant Currency basis and 8.4% on an as reported basis.
Fuel price per metric ton, net of hedges increased to
Interest expense, net was
Other income (expense), net was income of
Company Outlook
“2018 is well on track for yet another year of record financial performance. Furthermore, robust global demand has accelerated year-over-year gains in occupancy and pricing for full year 2019, which remains well ahead of this year’s record levels across all three brands,” continued
2018 Guidance and Sensitivities
In addition to announcing the results for the second quarter, the Company also provided guidance for the third quarter and full year 2018, along with accompanying sensitivities. The Company does not provide guidance on a GAAP basis because the Company is unable to predict, with reasonable certainty, the future movement of foreign exchange rates or the future impact of certain gains and charges. These items are uncertain and will depend on several factors, including industry conditions, and could be material to the Company’s results computed in accordance with GAAP. The Company has not provided reconciliations between the Company’s 2018 guidance and the most directly comparable GAAP measures because it would be too difficult to prepare a reliable U.S. GAAP quantitative reconciliation without unreasonable effort.
Third Quarter 2018 | Full Year 2018 | |||||||||
As Reported | Constant Currency |
As Reported | Constant Currency |
|||||||
Net Yield | Approx. 3.5% | Approx. 3.5% | Approx. 3.5% | Approx. 3.25% | ||||||
Adjusted Net Cruise Cost Excluding Fuel per Capacity Day |
Approx. 2.75% | Approx. 2.50% | Approx. 2.0% | Approx. 1.5% | ||||||
Adjusted EPS | Approx. $2.20 | $4.70 to $4.80 | ||||||||
Adjusted Depreciation and Amortization (1) | Approx. $140 million | Approx. $547 million | ||||||||
Adjusted Interest Expense, net | Approx. $70 million | Approx. $270 million | ||||||||
Effect on Adjusted EPS of a 1% change in Net Yield (2) | $0.06 | $0.11 (3) | ||||||||
Effect on Adjusted EPS of a 1% change in Adjusted Net Cruise Cost Excluding Fuel per Capacity Day (2) | $0.03 | $0.05 (3) |
(1) | Excludes $6.2 million and $24.9 million of amortization of intangible assets related to the Acquisition of Prestige in the third quarter and full year 2018, respectively. |
(2) | Based on midpoint of guidance. |
(3) | For the remaining quarters of 2018. |
The following reflects the Company’s expectations regarding fuel consumption and pricing, along with accompanying sensitivities.
|
Third Quarter 2018 | Full Year 2018 | |||
Fuel consumption in metric tons | 205,000 | 825,000 | |||
Fuel price per metric ton, net of hedges | $505 | $475 | |||
Effect on Adjusted EPS of a 10% change in fuel prices, net of hedges |
$0.02 | $0.05 (1) |
(1) | For the remaining quarters of 2018. |
As of
Remainder of 2018 | 2019 | 2020 | |||||||||
% of HFO Consumption Hedged | 83% | 59% | 53% | ||||||||
Average USGC Price / Barrel | $53.02 | $47.82 | $39.50 | ||||||||
% of MGO Consumption Hedged | 17% | 20% | 11% | ||||||||
Average Brent Price / Barrel | $46.50 | $49.25 | $51.85 | ||||||||
The following reflects the foreign currency exchange rates the Company used in its third quarter and full year 2018 guidance.
Current Guidance – August | Prior Guidance – May | |||
Euro | $1.17 | $1.21 | ||
British pound | $1.32 | $1.38 | ||
Australian Dollar | $0.74 | $0.75 | ||
Canadian Dollar | $0.76 | $0.78 | ||
Future capital commitments consist of contracted commitments, including ship construction contracts, and future expected capital expenditures necessary for operations as well as our ship refurbishment projects. As of
Company Updates and Other Business Highlights
Norwegian Bliss Launch and Christening
Norwegian Cruise Line Announced Enhancements to its 2019 and 2020 Itineraries
In July,
Additionally, Norwegian Pearl, Jewel and Jade will expand the brand’s presence in
Norwegian Cruise Line Confirms Options for Fifth and Sixth Ships in Next Generation of Newbuilds
The Company confirmed its previously announced options for the fifth and sixth Project Leonardo Class ships with
Appointment of
At the Company’s 2018 annual general meeting, the Board of Directors (the "Board") appointed Mr.
Company Joins Ocean Conservancy’s
In June, Norwegian announced its partnership with
Norwegian Cruise Line Announced Cruise Freedom™
Record Bookings for
In June,
Conference Call
The Company has scheduled a conference call for
About
With a combined fleet of 26 ships with approximately 54,400 berths, these brands offer itineraries to more than 450 destinations worldwide. The Company will introduce eight additional ships through 2027.
Celebrating its 15th anniversary in 2018,
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), net and other supplemental adjustments.
Adjusted EPS. Adjusted Net Income divided by the number of diluted weighted-average shares outstanding.
Adjusted Interest Expense. Interest expense adjusted to exclude write-offs of deferred financing fees related to the refinancing of certain of our credit facilities.
Adjusted Net Cruise Cost Excluding Fuel. Net Cruise Cost less fuel expense adjusted for supplemental adjustments.
Adjusted Net Income. Net income adjusted for supplemental adjustments.
Berths. Double occupancy capacity per cabin (single occupancy per studio cabin) even though many cabins can accommodate three or more passengers.
Breakaway Plus Class Ships. Norwegian Escape, Norwegian Joy, Norwegian Bliss and a fourth ship on order, Norwegian Encore.
Capacity Days. Available Berths multiplied by the number of cruise days for the period.
Constant Currency. A calculation whereby foreign currency-denominated revenues and expenses in a period are converted at the U.S. dollar exchange rate of a comparable period in order to eliminate the effects of foreign exchange fluctuations.
Dry-dock. A process whereby a ship is positioned in a large basin where all of the fresh/sea water is pumped out in order to carry out cleaning and repairs of those parts of a ship which are below the water line.
EBITDA. Earnings before interest, taxes, and depreciation and amortization.
EPS. Diluted earnings per share.
GAAP. Generally accepted accounting principles in the U.S.
Gross Cruise Cost. The sum of total cruise operating expense and marketing, general and administrative expense.
Gross Yield. Total revenue per Capacity Day.
Net Cruise Cost. Gross Cruise Cost less commissions, transportation and other expense and onboard and other expense.
Net Cruise Cost Excluding Fuel. Net Cruise Cost less fuel expense.
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 cabins.
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 in
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.
Non-GAAP Financial Measures
We use certain non-GAAP financial measures, such as Net Revenue, Net Yield, Net Cruise Cost, Adjusted Net Cruise Cost Excluding Fuel, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS, to enable us to analyze our performance. See “Terminology” for the definitions of these non-GAAP financial measures. We utilize Net Revenue and Net Yield to manage our business on a day-to-day basis and believe that they are the most relevant measures of our revenue performance because they reflect the revenue earned by us net of significant variable costs. In measuring our ability to control costs in a manner that positively impacts net income, we believe changes in Net Cruise Cost and Adjusted Net Cruise Cost Excluding Fuel to be the most relevant indicators of our performance.
As our business includes the sourcing of passengers and deployment of vessels outside of the U.S., a portion of our revenue and expenses are denominated in foreign currencies, particularly British pound, Canadian dollar, euro and Australian dollar, which are subject to fluctuations in currency exchange rates versus our reporting currency, the U.S. dollar. In order to monitor results excluding these fluctuations, we calculate certain non-GAAP measures on a Constant Currency basis whereby current period revenue and expenses denominated in foreign currencies are converted to U.S. dollars using currency exchange rates of the comparable period. We believe that presenting these non-GAAP measures on both a reported and Constant Currency basis is useful in providing a more comprehensive view of trends in our business.
We believe that Adjusted EBITDA is appropriate as a supplemental financial measure as it is used by management to assess operating performance. We also 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 nor is it intended to be a measure of liquidity or cash flows from operations or a measure comparable to net income as it does not take into account certain requirements such as capital expenditures and related depreciation, principal and interest payments and tax payments and it includes other supplemental adjustments.
Adjusted 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. In addition, management uses Adjusted EPS as a performance measure for 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 Income, Adjusted EPS, and Adjusted EBITDA may not be indicative of future adjustments or results. For example, for the three and six months ended
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 or that may be mentioned on our conference call constitute forward-looking statements within the meaning of the U.S. federal securities laws intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this release or that may be mentioned on our conference call, including, without limitation, those regarding our business strategy, financial position, results of operations, plans, potential share repurchases or dividends, future deleveraging, prospects and objectives of management for future operations (including expected fleet additions, development plans, demand environment, objectives relating to our activities and expected performance in new markets), are forward-looking statements. Many, but not all, of these statements can be found by looking for words like "expect," "anticipate," "goal," "project," "plan," "believe," "seek," "will," "may," "forecast," "estimate," "intend," "future," and similar words. Forward-looking statements do not guarantee future performance and may involve risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in those forward-looking statements. Examples of these risks, uncertainties and other factors include, but are not limited to the impact of: adverse events impacting the security of travel, such as terrorist acts, armed conflict and threats thereof, acts of piracy, and other international events; adverse incidents involving cruise ships; adverse general economic and related factors, such as fluctuating or increasing levels of unemployment, underemployment and the volatility of fuel prices, declines in the securities and real estate markets, and perceptions of these conditions that decrease the level of disposable income of consumers or consumer confidence; the spread of epidemics and viral outbreaks; our expansion into and investments in new markets; the risks and increased costs associated with operating internationally; breaches in data security or other disturbances to our information technology and other networks; changes in fuel prices and/or other cruise operating costs; fluctuations in foreign currency exchange rates; overcapacity in key markets or globally; the unavailability of attractive port destinations; evolving requirements and regulations regarding data privacy and protection and any actual or perceived compliance failures by us; our indebtedness and restrictions in the agreements governing our indebtedness that limit our flexibility in operating our business; the significant portion of our assets pledged as collateral under our existing debt agreements and the ability of our creditors to accelerate the repayment of our indebtedness; volatility and disruptions in the global credit and financial markets, which may adversely affect our ability to borrow and could increase our counterparty credit risks, including those under our credit facilities, derivatives, contingent obligations, insurance contracts and new ship progress payment guarantees; our inability to recruit or retain qualified personnel or the loss of key personnel; delays in our shipbuilding program and ship repairs, maintenance and refurbishments; our reliance on third parties to provide hotel management services to certain ships and certain other services; future increases in the price of, or major changes or reduction in, commercial airline services; amendments to our collective bargaining agreements for crew members and other employee relation issues; our inability to obtain adequate insurance coverage; future changes relating to how external distribution channels sell and market our cruises; pending or threatened litigation, investigations and enforcement actions; our ability to keep pace with developments in technology; seasonal variations in passenger fare rates and occupancy levels at different times of the year; changes involving the tax and environmental regulatory regimes in which we operate; and other factors set forth under "Risk Factors" in our most recently filed Annual Report on Form 10-K and subsequent filings by the Company with the
Investor Relations & Media Contacts |
Andrea DeMarco |
(305) 468-2339 InvestorRelations@nclcorp.com Jordan Kever (305) 436-4961 |
NORWEGIAN CRUISE LINE HOLDINGS LTD. | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(in thousands, except share and per share data) | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||
Revenue | ||||||||||||||||||||
Passenger ticket | $ | 1,077,046 | $ | 938,014 | $ | 1,966,912 | $ | 1,724,708 | ||||||||||||
Onboard and other | 445,128 | 406,089 | 848,665 | 770,176 | ||||||||||||||||
Total revenue | 1,522,174 | 1,344,103 | 2,815,577 | 2,494,884 | ||||||||||||||||
Cruise operating expense | ||||||||||||||||||||
Commissions, transportation and other | 249,875 | 223,315 | 468,215 | 417,455 | ||||||||||||||||
Onboard and other | 92,797 | 83,367 | 163,485 | 151,778 | ||||||||||||||||
Payroll and related | 219,337 | 194,724 | 429,161 | 387,360 | ||||||||||||||||
Fuel | 95,212 | 86,663 | 188,643 | 175,549 | ||||||||||||||||
Food | 54,091 | 47,340 | 104,747 | 93,518 | ||||||||||||||||
Other | 151,471 | 116,833 | 276,623 | 246,380 | ||||||||||||||||
Total cruise operating expense | 862,783 | 752,242 | 1,630,874 | 1,472,040 | ||||||||||||||||
Other operating expense | ||||||||||||||||||||
Marketing, general and administrative | 226,535 | 193,649 | 453,550 | 385,693 | ||||||||||||||||
Depreciation and amortization | 140,704 | 123,141 | 271,948 | 242,346 | ||||||||||||||||
Total other operating expense | 367,239 | 316,790 | 725,498 | 628,039 | ||||||||||||||||
Operating income | 292,152 | 275,071 | 459,205 | 394,805 | ||||||||||||||||
Non-operating income (expense) | ||||||||||||||||||||
Interest expense, net | (72,988 | ) | (64,196 | ) | (132,686 | ) | (117,156 | ) | ||||||||||||
Other income (expense), net | 12,922 | (5,609 | ) | 11,256 | (8,424 | ) | ||||||||||||||
Total non-operating income (expense) | (60,066 | ) | (69,805 | ) | (121,430 | ) | (125,580 | ) | ||||||||||||
Net income before income taxes | 232,086 | 205,266 | 337,775 | 269,225 | ||||||||||||||||
Income tax expense | (5,410 | ) | (6,793 | ) | (7,944 | ) | (8,842 | ) | ||||||||||||
Net income | $ | 226,676 | $ | 198,473 | $ | 329,831 | $ | 260,383 | ||||||||||||
Weighted-average shares outstanding | ||||||||||||||||||||
Basic | 223,308,350 | 227,931,135 | 225,314,816 | 227,701,109 | ||||||||||||||||
Diluted | 224,390,879 | 229,090,085 | 226,778,106 | 228,824,296 | ||||||||||||||||
Earnings per share | ||||||||||||||||||||
Basic | $ | 1.02 | $ | 0.87 | $ | 1.46 | $ | 1.14 | ||||||||||||
Diluted | $ | 1.01 | $ | 0.87 | $ | 1.45 | $ | 1.14 | ||||||||||||
NORWEGIAN CRUISE LINE HOLDINGS LTD. | |||||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Net income | $ | 226,676 | $ | 198,473 | $ | 329,831 | $ | 260,383 | |||||||||
Other comprehensive income (loss): | |||||||||||||||||
Shipboard Retirement Plan | 107 | 104 | 212 | 209 | |||||||||||||
Cash flow hedges: | |||||||||||||||||
Net unrealized gain (loss) | (15,894 | ) | 131,519 | 32,682 | 124,236 | ||||||||||||
Amount realized and reclassified into earnings | (6,723 | ) | 10,244 | (8,508 | ) | 19,949 | |||||||||||
Total other comprehensive income (loss) | (22,510 | ) | 141,867 | 24,386 | 144,394 | ||||||||||||
Total comprehensive income | $ | 204,166 | $ | 340,340 | $ | 354,217 | $ | 404,777 | |||||||||
NORWEGIAN CRUISE LINE HOLDINGS LTD. | |||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||
(Unaudited) | |||||||||
(in thousands, except share data) | |||||||||
June 30, | December 31, | ||||||||
2018 | 2017 | ||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 205,007 | $ | 176,190 | |||||
Accounts receivable, net | 44,212 | 43,961 | |||||||
Inventories | 93,136 | 82,121 | |||||||
Prepaid expenses and other assets | 329,135 | 216,065 | |||||||
Total current assets | 671,490 | 518,337 | |||||||
Property and equipment, net | 12,085,701 | 11,040,488 | |||||||
Goodwill | 1,388,931 | 1,388,931 | |||||||
Tradenames | 817,525 | 817,525 | |||||||
Other long-term assets | 365,999 | 329,588 | |||||||
Total assets | $ | 15,329,646 | $ | 14,094,869 | |||||
Liabilities and shareholders' equity | |||||||||
Current liabilities: | |||||||||
Current portion of long-term debt | $ | 679,767 | $ | 619,373 | |||||
Accounts payable | 54,676 | 53,433 | |||||||
Accrued expenses and other liabilities | 620,021 | 513,717 | |||||||
Advance ticket sales | 1,951,701 | 1,303,498 | |||||||
Total current liabilities | 3,306,165 | 2,490,021 | |||||||
Long-term debt | 6,149,221 | 5,688,392 | |||||||
Other long-term liabilities | 187,467 | 166,690 | |||||||
Total liabilities | 9,642,853 | 8,345,103 | |||||||
Commitments and contingencies | |||||||||
Shareholders' equity: | |||||||||
Ordinary shares, $.001 par value; 490,000,000 shares authorized; 235,174,511 shares issued | |||||||||
and 221,378,084 shares outstanding at June 30, 2018 and 233,840,523 shares issued and | |||||||||
228,528,562 shares outstanding at December 31, 2017 | 235 | 233 | |||||||
Additional paid-in capital | 4,064,138 | 3,998,694 | |||||||
Accumulated other comprehensive income | 51,352 | 26,966 | |||||||
Retained earnings | 2,273,828 | 1,963,128 | |||||||
Treasury shares (13,796,427 and 5,311,961 ordinary shares at June 30, 2018 and December 31, 2017, | |||||||||
respectively, at cost) | (702,760 | ) | (239,255 | ) | |||||
Total shareholders' equity | 5,686,793 | 5,749,766 | |||||||
Total liabilities and shareholders' equity | $ | 15,329,646 | $ | 14,094,869 | |||||
NORWEGIAN CRUISE LINE HOLDINGS LTD. | |||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
(Unaudited) | |||||||||||
(in thousands) | |||||||||||
Six Months Ended | |||||||||||
June 30, | |||||||||||
2018 | 2017 | ||||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | 329,831 | $ | 260,383 | |||||||
Adjustments to reconcile net income to | |||||||||||
net cash provided by operating activities: | |||||||||||
Depreciation and amortization expense | 274,842 | 248,618 | |||||||||
Loss on derivatives | 4 | 375 | |||||||||
Deferred income taxes, net | 2,180 | 5,165 | |||||||||
Loss on extinguishment of debt | 6,346 | - | |||||||||
Provision for bad debts and inventory | 2,197 | 535 | |||||||||
Share-based compensation expense | 59,835 | 42,220 | |||||||||
Net foreign currency adjustments | (3,884 | ) | - | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable, net | (2,087 | ) | 12,301 | ||||||||
Inventories | (11,422 | ) | (10,814 | ) | |||||||
Prepaid expenses and other assets | (74,980 | ) | (21,719 | ) | |||||||
Accounts payable | 3,645 | 10,129 | |||||||||
Accrued expenses and other liabilities | 54,962 | (28,382 | ) | ||||||||
Advance ticket sales | 612,332 | 400,920 | |||||||||
Net cash provided by operating activities | 1,253,801 | 919,731 | |||||||||
Cash flows from investing activities | |||||||||||
Additions to property and equipment, net | (1,251,434 | ) | (1,065,265 | ) | |||||||
Promissory note receipts | 501 | - | |||||||||
Settlement of derivatives | 64,796 | (35,255 | ) | ||||||||
Net cash used in investing activities | (1,186,137 | ) | (1,100,520 | ) | |||||||
Cash flows from financing activities | |||||||||||
Repayments of long-term debt | (906,897 | ) | (921,329 | ) | |||||||
Proceeds from long-term debt | 1,445,352 | 1,217,060 | |||||||||
Proceeds from employee related plans | 19,026 | 13,213 | |||||||||
Net share settlement of restricted share units | (13,415 | ) | (6,187 | ) | |||||||
Repurchases of shares | (463,505 | ) | - | ||||||||
Early redemption premium | (5,154 | ) | - | ||||||||
Deferred financing fees | (114,254 | ) | (31,000 | ) | |||||||
Net cash provided by (used in) financing activities | (38,847 | ) | 271,757 | ||||||||
Net increase in cash and cash equivalents | 28,817 | 90,968 | |||||||||
Cash and cash equivalents at beginning of the period | 176,190 | 128,347 | |||||||||
Cash and cash equivalents at end of the period | $ | 205,007 | $ | 219,315 | |||||||
NORWEGIAN CRUISE LINE HOLDINGS LTD. | ||||||||||||||||||||||
NON-GAAP RECONCILING INFORMATION | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
The following table sets forth selected statistical information: | ||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
Passengers carried | 687,820 | 598,942 | 1,305,260 | 1,127,296 | ||||||||||||||||||
Passenger Cruise Days | 4,959,446 | 4,517,788 | 9,684,050 | 8,748,306 | ||||||||||||||||||
Capacity Days | 4,550,217 | 4,189,750 | 9,016,688 | 8,220,366 | ||||||||||||||||||
Occupancy Percentage | 109.0 | % | 107.8 | % | 107.4 | % | 106.4 | % | ||||||||||||||
Net Revenue, Gross Yield and Net Yield were calculated as follows (in thousands, except Capacity Days and Yield data): | ||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||
2018 | 2018 | |||||||||||||||||||||
Constant | Constant | |||||||||||||||||||||
2018 | Currency | 2017 | 2018 | Currency | 2017 | |||||||||||||||||
Passenger ticket revenue | $ | 1,077,046 | $ | 1,067,224 | $ | 938,014 | $ | 1,966,912 | $ | 1,944,016 | $ | 1,724,708 | ||||||||||
Onboard and other revenue | 445,128 | 445,128 | 406,089 | 848,665 | 848,665 | 770,176 | ||||||||||||||||
Total revenue | 1,522,174 | 1,512,352 | 1,344,103 | 2,815,577 | 2,792,681 | 2,494,884 | ||||||||||||||||
Less: | ||||||||||||||||||||||
Commissions, transportation | ||||||||||||||||||||||
and other expense | 249,875 | 247,696 | 223,315 | 468,215 | 462,987 | 417,455 | ||||||||||||||||
Onboard and other expense | 92,797 | 92,797 | 83,367 | 163,485 | 163,485 | 151,778 | ||||||||||||||||
Net Revenue | 1,179,502 | 1,171,859 | 1,037,421 | 2,183,877 | 2,166,209 | 1,925,651 | ||||||||||||||||
Capacity Days | 4,550,217 | 4,550,217 | 4,189,750 | 9,016,688 | 9,016,688 | 8,220,366 | ||||||||||||||||
Gross Yield | $ | 334.53 | $ | 332.37 | $ | 320.81 | $ | 312.26 | $ | 309.72 | $ | 303.50 | ||||||||||
Net Yield | $ | 259.22 | $ | 257.54 | $ | 247.61 | $ | 242.20 | $ | 240.24 | $ | 234.25 | ||||||||||
NORWEGIAN CRUISE LINE HOLDINGS LTD. | ||||||||||||||||||||||
NON-GAAP RECONCILING INFORMATION | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Gross Cruise Cost, Net Cruise Cost, Net Cruise Cost Excluding Fuel and Adjusted Net Cruise Cost Excluding Fuel were calculated as follows (in thousands, except Capacity Days and per Capacity Day data): | ||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||
2018 | 2018 | |||||||||||||||||||||
Constant | Constant | |||||||||||||||||||||
2018 | Currency | 2017 | 2018 | Currency | 2017 | |||||||||||||||||
Total cruise operating expense | $ | 862,783 | $ | 855,300 | $ | 752,242 | $ | 1,630,874 | $ | 1,618,893 | $ | 1,472,040 | ||||||||||
Marketing, general and | ||||||||||||||||||||||
administrative expense | 226,535 | 225,870 | 193,649 | 453,550 | 450,563 | 385,693 | ||||||||||||||||
Gross Cruise Cost | 1,089,318 | 1,081,170 | 945,891 | 2,084,424 | 2,069,456 | 1,857,733 | ||||||||||||||||
Less: | ||||||||||||||||||||||
Commissions, transportation | ||||||||||||||||||||||
and other expense | 249,875 | 247,696 | 223,315 | 468,215 | 462,987 | 417,455 | ||||||||||||||||
Onboard and other expense | 92,797 | 92,797 | 83,367 | 163,485 | 163,485 | 151,778 | ||||||||||||||||
Net Cruise Cost | 746,646 | 740,677 | 639,209 | 1,452,724 | 1,442,984 | 1,288,500 | ||||||||||||||||
Less: Fuel expense | 95,212 | 95,212 | 86,663 | 188,643 | 188,643 | 175,549 | ||||||||||||||||
Net Cruise Cost Excluding Fuel | 651,434 | 645,465 | 552,546 | 1,264,081 | 1,254,341 | 1,112,951 | ||||||||||||||||
Less Non-GAAP Adjustments: | ||||||||||||||||||||||
Non-cash deferred compensation (1) | 542 | 542 | 823 | 1,084 | 1,084 | 1,646 | ||||||||||||||||
Non-cash share-based compensation (2) | 31,733 | 31,733 | 24,017 | 59,835 | 59,835 | 42,220 | ||||||||||||||||
Secondary Equity Offering expenses (3) | - | - | - | 482 | 482 | - | ||||||||||||||||
Severance payments and other fees (4) | - | - | - | - | - | 2,399 | ||||||||||||||||
Acquisition of Prestige expenses (5) | - | - | 250 | - | - | 500 | ||||||||||||||||
Other (6) | 80 | 80 | 1,606 | (912 | ) | (912 | ) | 1,606 | ||||||||||||||
Adjusted Net Cruise Cost Excluding Fuel | $ | 619,079 | $ | 613,110 | $ | 525,850 | $ | 1,203,592 | $ | 1,193,852 | $ | 1,064,580 | ||||||||||
Capacity Days | 4,550,217 | 4,550,217 | 4,189,750 | 9,016,688 | 9,016,688 | 8,220,366 | ||||||||||||||||
Gross Cruise Cost per Capacity Day | $ | 239.40 | $ | 237.61 | $ | 225.76 | $ | 231.17 | $ | 229.51 | $ | 225.99 | ||||||||||
Net Cruise Cost per Capacity Day | $ | 164.09 | $ | 162.78 | $ | 152.56 | $ | 161.12 | $ | 160.03 | $ | 156.74 | ||||||||||
Net Cruise Cost Excluding Fuel per Capacity Day | $ | 143.17 | $ | 141.85 | $ | 131.88 | $ | 140.19 | $ | 139.11 | $ | 135.39 | ||||||||||
Adjusted Net Cruise Cost Excluding Fuel per Capacity Day | $ | 136.05 | $ | 134.74 | $ | 125.51 | $ | 133.48 | $ | 132.40 | $ | 129.51 | ||||||||||
(1) Non-cash deferred compensation expenses related to the crew pension plan and other crew expenses, which are included in payroll and related expense and other income (expense). | ||||||||||||||||||||||
(2) Non-cash share-based compensation expenses related to equity awards, which are included in marketing, general and administrative expense and payroll and related expense. | ||||||||||||||||||||||
(3) Expenses related to a Secondary Equity Offering, 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 Acquisition of Prestige, which are included in marketing, general and administrative expense. | ||||||||||||||||||||||
(6) Primarily related to expenses and reimbursements related to certain legal costs, which are included in marketing, general and administrative expense. | ||||||||||||||||||||||
NORWEGIAN CRUISE LINE HOLDINGS LTD. | ||||||||||||||
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 | Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||
Net income | $ | 226,676 | $ | 198,473 | $ | 329,831 | $ | 260,383 | ||||||
Non-GAAP Adjustments: | ||||||||||||||
Non-cash deferred compensation (1) | 864 | 823 | 1,727 | 1,646 | ||||||||||
Non-cash share-based compensation (2) | 31,733 | 24,017 | 59,835 | 42,220 | ||||||||||
Secondary Equity Offering expenses (3) | - | - | 482 | - | ||||||||||
Severance payments and other fees (4) | - | - | - | 2,399 | ||||||||||
Acquisition of Prestige expenses (5) | - | 250 | - | 500 | ||||||||||
Amortization of intangible assets (6) | 6,222 | 7,568 | 12,444 | 15,136 | ||||||||||
Extinguishment of debt (7) | 6,346 | - | 6,346 | - | ||||||||||
Other (8) | 80 | 1,606 | (912 | ) | 1,606 | |||||||||
Adjusted Net Income | $ | 271,921 | $ | 232,737 | $ | 409,753 | $ | 323,890 | ||||||
Diluted weighted-average shares outstanding | 224,390,879 | 229,090,085 | 226,778,106 | 228,824,296 | ||||||||||
Diluted earnings per share | $ | 1.01 | $ | 0.87 | $ | 1.45 | $ | 1.14 | ||||||
Adjusted EPS | $ | 1.21 | $ | 1.02 | $ | 1.81 | $ | 1.42 | ||||||
(1) Non-cash deferred compensation expenses related to the crew pension plan and other crew expenses, which are included in payroll and related expense and other income (expense). | ||||||||||||||
(2) Non-cash share-based compensation expenses related to equity awards, which are included in marketing, general and administrative expense and payroll and related expense. | ||||||||||||||
(3) Expenses related to a Secondary Equity Offering, 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 Acquisition of Prestige, which are primarily included in marketing, general and administrative expense. | ||||||||||||||
(6) Amortization of intangible assets related to the Acquisition of Prestige, which are included in depreciation and amortization expense. | ||||||||||||||
(7) Losses on extinguishments of debt due to the partial redemption of our 4.750% Senior Notes due 2021, which are included in interest expense, net. | ||||||||||||||
(8) Primarily related to expenses and reimbursements related to certain legal costs, which are included in marketing, general and administrative expense. | ||||||||||||||
NORWEGIAN CRUISE LINE HOLDINGS LTD. | ||||||||||||||
NON-GAAP RECONCILING INFORMATION | ||||||||||||||
(Unaudited) | ||||||||||||||
EBITDA and Adjusted EBITDA were calculated as follows (in thousands): | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||
Net income | $ | 226,676 | $ | 198,473 | $ | 329,831 | $ | 260,383 | ||||||
Interest expense, net | 72,988 | 64,196 | 132,686 | 117,156 | ||||||||||
Income tax expense | 5,410 | 6,793 | 7,944 | 8,842 | ||||||||||
Depreciation and amortization expense | 140,704 | 123,141 | 271,948 | 242,346 | ||||||||||
EBITDA | 445,778 | 392,603 | 742,409 | 628,727 | ||||||||||
Other (income) expense (1) | (12,922 | ) | 5,609 | (11,256 | ) | 8,424 | ||||||||
Non-GAAP Adjustments: | ||||||||||||||
Non-cash deferred compensation (2) | 542 | 823 | 1,084 | 1,646 | ||||||||||
Non-cash share-based compensation (3) | 31,733 | 24,017 | 59,835 | 42,220 | ||||||||||
Secondary Equity Offering expenses (4) | - | - | 482 | - | ||||||||||
Severance payments and other fees (5) | - | - | - | 2,399 | ||||||||||
Acquisition of Prestige expenses (6) | - | 250 | - | 500 | ||||||||||
Other (7) | 80 | 1,606 | (912 | ) | 1,606 | |||||||||
Adjusted EBITDA | $ | 465,211 | $ | 424,908 | $ | 791,642 | $ | 685,522 | ||||||
(1) Primarily consists of gains and losses, net for foreign currency exchanges. | ||||||||||||||
(2) Non-cash deferred compensation expenses related to the crew pension plan and other crew expenses, which are included in payroll and related expense. | ||||||||||||||
(3) Non-cash share-based compensation expenses related to equity awards, which are included in marketing, general and administrative expense and payroll and related expense. | ||||||||||||||
(4) Expenses related to a Secondary Equity Offering, which are included in marketing, general and administrative expenses. | ||||||||||||||
(5) Severance payments and other expenses related to restructuring costs and other severance arrangements, 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) Primarily related to expenses and reimbursements related to certain legal costs, which are included in marketing, general and administrative expense. | ||||||||||||||
Source: Norwegian Cruise Line Holdings Ltd.