Norwegian Cruise Line Holdings Reports Financial Results for the Fourth Quarter and Full Year 2014
Company Reports Strong Growth in Adjusted EPS of 61%
Acquisition of Prestige Cruise Holdings Completed in Fourth Quarter
Integration On Track with Identified Synergies of
Full Year 2014 Highlights
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Acquisition of
Prestige Cruise Holdings , parent company ofOceania Cruises andRegent Seven Seas Cruises , diversifies Company's product portfolio - Adjusted EPS improvement of 61.0% (64.5% on a Norwegian Stand-alone basis)
- Adjusted Net Yield increase of 4.8% (3.3% on a Norwegian Stand-alone basis)
- Revenue increase of 21.6% to $3.1 billion
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Introduction of Norwegian Getaway,
Norwegian Cruise Line's first year-round,Miami -based ship in over a decade
Full Year 2014 Results
"Looking back at our accomplishments over the past year, it is clear that 2014 will be remembered as one of solid growth and game-changing expansion for the company," said
The Company reported on an as reported basis a 61.0% increase in Adjusted EPS to
A 25.5% improvement in Adjusted Net Revenue to
On an as reported basis, Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased 3.5%. Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased 1.0% on a Norwegian Stand-alone basis (0.8% on a Constant Currency basis) due to investments in conjunction with the Norwegian NEXT program as well as increased marketing expenses to drive demand and stimulate close-in bookings in the fourth quarter and to carry momentum into Wave season.
The Company's fuel price per metric ton, excluding the impact of hedges, was
Interest expense, net was
Fourth Quarter 2014 Results
Due to the timing of the closing of the acquisition, results from the consolidation of Prestige are more evident in the fourth quarter compared to the full year. Adjusted EPS in the period was
Adjusted Net Revenue, for the period, which excludes the aforementioned deferred revenue fair value adjustment, increased 37.5% to
Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased 9.9% as a result of the addition of the Prestige fleet and was essentially flat on a Norwegian Stand-alone basis. Fuel price per metric ton, excluding hedges was
Interest expense, net increased to
2015 Guidance and Sensitivities
In addition to the results for the fourth quarter and full year 2014, the Company also provided the following guidance for the first quarter and full year 2015, along with accompanying sensitivities. Guidance for Adjusted Net Yield and Adjusted Net Cruise Cost Excluding Fuel per Capacity Day are provided on an as reported basis as well as a Combined Company basis which compares expectations to 2014 results that include Prestige results assuming the acquisition had occurred at the beginning of 2014.
"Until recently, our booked revenue had been on par with prior year; however, the last three weeks of this Wave season has seen a significant acceleration in booking volume. Norwegian Escape is in a better booked position than her last two predecessor sister ships, Norwegian Breakaway and Getaway, and Seven Seas Explorer has set both single day and single week booking records at the Regent brand. At year end, and as of today, the company has more booked revenue and the highest net yields on future sailings than ever before, including full year 2015 and 2016," said Del Rio. "As anticipated, the combined impacts of the challenging
| First Quarter 2015 | Full Year 2015 | |||||
| Combined Company (1) | Combined Company(1) | |||||
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As Reported |
As Reported |
Constant Currency |
As Reported |
As Reported |
Constant Currency |
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| Adjusted Net Yield | 17.0 to 18.0% | (1.0) to (2.0)% | Flat to (1.0)% | Approx. 17.5% | Approx. 1.5% | Approx. 3.0% |
| Adjusted Net Cruise Cost Excluding Fuel per Capacity Day | 27.0 to 28.0% | 4.5 to 5.5% | 5.0 to 6.0% | Approx. 23.5% | Approx. 2.75% | Approx. 3.25% |
| Adjusted EPS (2) |
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| Depreciation and amortization |
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| Interest expense, net |
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| Effect on Adjusted EPS of a 1% change in Adjusted Net Yield (3) |
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| (1) Combined Company compares 2015 estimates with the combined results of Norwegian and Prestige for the first quarter and full year 2014. | ||||||
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(2) Net of full year impact of Insignia incident of |
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| (3) Based on midpoint of guidance | ||||||
The following reflects the Company's expectations regarding fuel consumption and pricing, along with accompanying sensitivities.
| First Quarter 2015 | Full Year 2015 | |
| Fuel consumption in metric tons | 170,000 | 685,000 |
| Fuel price per metric ton |
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| Fuel price per metric ton, net of hedges |
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| Effect on Adjusted EPS of a 10% change in fuel prices, net of hedges |
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As of
Future capital commitments consist of contracted commitments, including future expected capital expenditures for business enhancements such as ship Dry-dock refurbishments as part of the Norwegian NEXT program and ship construction contracts. As of
| Full Year | |||
| 2015 | 2016 | 2017 | |
| Ship construction | $ 975,782 | $ 648,378 | $ 891,064 |
| Ship financing | (683,663) | (477,197) | (666,112) |
| Ship construction net of financing | $ 292,119 | $ 171,181 | $ 224,952 |
|
Business Enhancement Capital Expenditures, including ROI Capital Expenditures (1) (2) |
$ 154,000 | $ 160,000 | $ 156,000 |
| Incremental ROI Capital Expenditures for exhaust gas scrubbers | $ 28,000 | $ 8,000 | -- |
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(1) Full Year 2015 includes |
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| (2) Excludes amounts for exhaust gas scrubbers | |||
Company Updates and Other Business Highlights
In
At the time of the acquisition the Company announced cost synergies in the
In
In 2014 the Company continued its tradition of recruiting strong leaders with extensive experience both inside and outside of the cruise industry. With over 20 years of experience in the cruise industry,
Upcoming Fleet Additions
The line welcomes its largest ship and the first ship in its Breakaway Plus class fleet, Norwegian Escape, in
In November 2014 the Company announced the purchase of Ocean Princess, the 684-passenger sister ship to the line's Insignia, Regatta and
Designs and offerings of the line's upcoming newbuild, Seven Seas Explorer, were revealed to the public for the first time in
Conference Call
The Company has scheduled a conference call for
About
These brands operate a combined 21 ships with approximately 40,000 lower berths visiting more than 420 destinations worldwide. The Company's brands will introduce six ships through 2019.
Terminology
Acquisition of Prestige. In
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 Net Cruise Cost Excluding Fuel. Net Cruise Cost excluding fuel expense adjusted for supplemental adjustments.
Adjusted Net Income. Net income (loss) adjusted for supplemental adjustments.
Adjusted Net Revenue. Net Revenue adjusted for supplemental adjustments.
Adjusted Net Yield. Net Yield adjusted for supplemental adjustments.
Berths. Double occupancy capacity per stateroom (single occupancy per studio stateroom) even though many staterooms can accommodate three or more passengers.
Business Enhancement Capital Expenditures. Capital expenditures other than those related to new ship construction and ROI Capital Expenditures.
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 U.S. dollar exchange rate of a comparable period in order to eliminate the effects of foreign exchange fluctuations.
Corporate Reorganization. In connection with the consummation of the IPO, the Sponsors' ordinary shares in NCLC were exchanged for the ordinary shares of NCLH at a share exchange ratio of 1.0 to 8.42565 and NCLH became the owner of 100% of the ordinary shares and parent company of NCLC.
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, depreciation and amortization.
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 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.
Initial Public Offering (or "IPO"). The initial public offering of 27,058,824 ordinary shares, par value
Merger Agreement. Agreement and Plan of Merger, dated as of
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.
Norwegian Stand-alone. Results of operations excluding consolidation of results of Prestige.
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.
ROI Capital Expenditures. Comprised of project-based capital expenditures which have a quantified return on investment.
Secondary Equity Offering(s). Public offering(s) of the Company'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.
Sponsors. Refers to Genting HK, the Apollo Funds and/or the TPG Viking Funds.
Non-GAAP Financial Measures
We use certain non-GAAP financial measures, such as Net Revenue, Net Yield, Net Cruise Cost, Adjusted Net Revenue, Adjusted Net Yield, Adjusted Net Cruise Cost Excluding Fuel and Adjusted EBITDA, Adjusted Net Income and Adjusted EPS to enable us to analyze our performance. 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
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 the Company's performance as it reflects certain operating drivers of the Company's 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 measures 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 Income and Adjusted EPS are supplemental financial measures used to demonstrate GAAP net income and earnings per share excluding certain charges. We use Adjusted Net Income and Adjusted EPS as key performance measures of our earnings performance, and 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. These charges vary from period to period; thus, our presentation of Adjusted Net Income and Adjusted EPS 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 items in our consolidated financial statements below.
Note on Forward-Looking Statements
This release may contain "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. The words "expect," "anticipate," "goal," "project," "plan," "believe," "seek," "will," "may," "forecast," "estimate," "intend," "future," and similar expressions may identify forward-looking statements, which are not historical in nature. These forward-looking statements reflect Norwegian's current expectations, and are subject to a number of risks, uncertainties, and assumptions. Among the important risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements are the effects of costs incurred in connection with the Acquisition of Prestige; the ability to realize, or delays in realizing, the anticipated benefits of
the Acquisition of Prestige; the assumption of certain potential liabilities relating to Prestige's business; the diversion of management's attention away from operations as a result of the integration of Prestige's business; the effect that the Acquisition of Prestige may have on employee relations and on our ability to retain key personnel; the adverse impact of general economic conditions 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 risks associated with operating internationally, including changes in interest rates and/or foreign currency exchange rates; changes in fuel prices and/or other cruise operating costs; our efforts to
expand our business into new markets; our substantial indebtedness, including the ability to raise additional capital to fund our operations, and to generate the necessary amount of cash to service our existing debt; 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; our ability to incur significantly more debt despite our substantial existing indebtedness; the impact of 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; adverse events impacting the security of travel, such as terrorist acts, acts of piracy, armed conflict and threats thereof and other international events; the impact of the spread of epidemics and viral outbreaks; the impact of any future changes relating to how external distribution channels sell and market our cruises; our reliance on third parties to provide hotel management services to certain of our ships and certain other services; the impact of delays in our shipbuilding program and ship repairs, maintenance and refurbishments; the impact of any future increases in the price of, or major changes or reduction in, commercial airline services; the impact of seasonal variations in passenger fare rates and occupancy levels at different times of the year; the effect of adverse incidents involving cruise ships and our ability to obtain adequate insurance
coverage; the impact of any breaches in data security or other disturbances to our information technology and other networks; our ability to keep pace with developments in technology; the impact of amendments to our collective bargaining agreements for crew members and other employee relation issues; the continued availability of attractive port destinations; the impact of pending or threatened litigation, investigations and enforcement actions; changes involving the tax and environmental regulatory regimes in which we operate; the control of our business by our Sponsors; and other factors discussed in the Company's filings with the
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| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (Unaudited) | ||||
| (in thousands, except share and per share data) | ||||
| Three Months Ended | Year Ended | |||
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| 2014 | 2013 | 2014 | 2013 | |
| Revenue | ||||
| Passenger ticket | $ 556,881 | $ 415,399 | $ 2,212,547 | $ 1,815,869 |
| Onboard and other | 232,028 | 184,946 | 913,334 | 754,425 |
| Total revenue | 788,909 | 600,345 | 3,125,881 | 2,570,294 |
| Cruise operating expense | ||||
| Commissions, transportation and other | 129,006 | 108,166 | 503,722 | 455,816 |
| Onboard and other | 51,220 | 42,095 | 224,000 | 195,526 |
| Payroll and related | 131,261 | 92,887 | 452,647 | 340,430 |
| Fuel | 89,478 | 78,324 | 326,231 | 303,439 |
| Food | 43,004 | 35,553 | 168,240 | 136,785 |
| Other | 74,651 | 60,764 | 271,784 | 225,663 |
| Total cruise operating expense | 518,620 | 417,789 | 1,946,624 | 1,657,659 |
| Other operating expense | ||||
| Marketing, general and administrative | 139,585 | 64,232 | 403,169 | 301,155 |
| Depreciation and amortization | 84,262 | 56,894 | 273,147 | 215,593 |
| Total other operating expense | 223,847 | 121,126 | 676,316 | 516,748 |
| Operating income | 46,442 | 61,430 | 502,941 | 395,887 |
| Non-operating income (expense) | ||||
| Interest expense, net | (56,438) | (24,633) | (151,754) | (282,602) |
| Other income (expense) | (14,158) | 235 | (10,853) | 1,403 |
| Total non-operating income (expense) | (70,596) | (24,398) | (162,607) | (281,199) |
| Net income (loss) before income taxes | (24,154) | 37,032 | 340,334 | 114,688 |
| Income tax benefit (expense) | (1,494) | (625) | 2,267 | (11,802) |
| Net income (loss) | (25,648) | 36,407 | 342,601 | 102,886 |
| Net income (loss) attributable to non-controlling interest | (39) | 315 | 4,249 | 1,172 |
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Net income (loss) attributable to |
$ (25,609) | $ 36,092 | $ 338,352 | $ 101,714 |
| Weighted-average shares outstanding | ||||
| Basic | 212,698,622 | 205,112,064 | 206,524,968 | 202,993,839 |
| Diluted | 212,698,622 | 210,914,163 | 212,017,784 | 209,239,484 |
| Earnings (loss) per share | ||||
| Basic | $ (0.12) | $ 0.18 | $ 1.64 | $ 0.50 |
| Diluted | $ (0.12) | $ 0.17 | $ 1.62 | $ 0.49 |
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| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
| (Unaudited) | ||||
| (in thousands) | ||||
| Three Months Ended | Year Ended | |||
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| 2014 | 2013 | 2014 | 2013 | |
| Net income (loss) | $ (25,648) | $ 36,407 |
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$ 102,886 |
| Other comprehensive income (loss): | ||||
| Shipboard Retirement Plan | (2,595) | 2,187 | (2,311) | 2,538 |
| Cash flow hedges: | ||||
| Net unrealized gain (loss) | (194,076) | 14,866 | (238,436) | 2,247 |
| Amount realized and reclassified into earnings | 11,529 | (505) | 13,354 | (4,128) |
| Total other comprehensive income (loss) | (185,142) | 16,548 | (227,393) | 657 |
| Total comprehensive income (loss) | (210,790) | 52,955 | 115,208 | 103,543 |
| Comprehensive income (loss) attributable to non-controlling interest | (1,018) | 455 | 2,808 | 900 |
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Total comprehensive income (loss) attributable to |
$ (209,772) | $ 52,500 |
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$ 102,643 |
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| CONSOLIDATED BALANCE SHEETS | ||
| (Unaudited) | ||
| (in thousands, except share data) | ||
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| 2014 | 2013 | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 84,824 | $ 56,467 |
| Accounts receivable, net | 32,432 | 18,260 |
| Inventories | 56,555 | 43,715 |
| Prepaid expenses and other assets | 109,924 | 64,482 |
| Total current assets | 283,735 | 182,924 |
| Property and equipment, net | 8,623,773 | 5,647,670 |
| Goodwill, tradenames and other long-term assets | 2,675,980 | 820,384 |
| Total assets | $ 11,583,488 | $ 6,650,978 |
| Liabilities and shareholders' equity | ||
| Current liabilities: | ||
| Current portion of long-term debt | $ 576,947 | $ 286,575 |
| Accounts payable | 101,983 | 86,788 |
| Accrued expenses and other liabilities | 552,514 | 253,752 |
| Due to affiliate | 37,948 | 36,544 |
| Advance ticket sales | 817,207 | 411,829 |
| Total current liabilities | 2,086,599 | 1,075,488 |
| Long-term debt | 5,607,157 | 2,841,214 |
| Due to affiliate | 18,544 | 55,128 |
| Other long-term liabilities | 352,375 | 47,882 |
| Total liabilities | 8,064,675 | 4,019,712 |
| Commitments and contingencies | ||
| Shareholders' equity: | ||
|
Ordinary shares, |
228 | 205 |
| Additional paid-in capital | 3,702,346 | 2,822,864 |
| Accumulated other comprehensive income (loss) | (242,642) | (16,690) |
| Retained earnings (deficit) | 140,881 | (197,471) |
| Treasury shares (2,486,350 ordinary shares at cost) | (82,000) | -- |
| Total shareholders' equity controlling interest | 3,518,813 | 2,608,908 |
| Non-controlling interest | -- | 22,358 |
| Total shareholders' equity | 3,518,813 | 2,631,266 |
| Total liabilities and shareholders' equity | $ 11,583,488 | $ 6,650,978 |
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| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (Unaudited) | ||
| (in thousands) | ||
| Year Ended | ||
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| 2014 | 2013 | |
| Cash flows from operating activities | ||
| Net income | $ 342,601 | $ 102,886 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization expense | 304,877 | 245,111 |
| Loss (gain) on derivatives | 7,274 | (861) |
| Deferred income taxes, net | 6,187 | 2,844 |
| Write-off of deferred financing fees | 15,628 | 36,357 |
| Share-based compensation expense | 14,617 | 23,075 |
| Changes in operating assets and liabilities: | ||
| Accounts receivable, net | (7,256) | (3,198) |
| Inventories | (261) | (4,034) |
| Prepaid expenses and other assets | (6,373) | (15,667) |
| Accounts payable | 315 | 7,662 |
| Accrued expenses and other liabilities | (18,061) | 25,925 |
| Advance ticket sales | (23,947) | 55,181 |
| Net cash provided by operating activities | 635,601 | 475,281 |
| Cash flows from investing activities | ||
| Acquisition of Prestige, net of cash received | (826,686) | -- |
| Additions to property and equipment | (1,051,974) | (894,851) |
| Net cash used in investing activities | (1,878,660) | (894,851) |
| Cash flows from financing activities | ||
| Repayments of long-term debt | (1,688,720) | (2,393,613) |
| Repayments to Affiliate | (37,043) | (116,694) |
| Proceeds from long-term debt | 3,189,721 | 2,522,311 |
| Proceeds from the issuance of ordinary shares, net | -- | 473,914 |
| Proceeds from the exercise of share options | 5,857 | 2,020 |
| Purchases of treasury shares | (82,000) | -- |
| NCLC partnership tax distributions | (218) | -- |
| Deferred financing fees and other | (116,181) | (57,401) |
| Net cash provided by financing activities | 1,271,416 | 430,537 |
| Net increase in cash and cash equivalents | 28,357 | 10,967 |
| Cash and cash equivalents at beginning of the period | 56,467 | 45,500 |
| Cash and cash equivalents at end of the period | $ 84,824 | $ 56,467 |
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| NON-GAAP RECONCILING INFORMATION | ||||||||
| (Unaudited) | ||||||||
| The following table sets forth selected statistical information: | ||||||||
| Three Months Ended | Year Ended | |||||||
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| 2014 | 2013 | 2014 | 2013 | |||||
| Norwegian | Norwegian | |||||||
| As Reported | Stand-alone | As Reported | As Reported | Stand-alone | As Reported | |||
| Passengers carried | 627,463 | 611,920 | 405,007 | 2,133,981 | 2,118,438 | 1,628,278 | ||
| Passenger Cruise Days | 3,554,855 | 3,323,655 | 2,939,187 | 13,634,200 | 13,403,000 | 11,400,906 | ||
| Capacity Days | 3,398,468 | 3,138,164 | 2,745,734 | 12,512,459 | 12,252,155 | 10,446,216 | ||
| Occupancy Percentage | 104.6% | 105.9% | 107.0% | 109.0% | 109.4% | 109.1% | ||
| 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 | |||||||
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| 2014 | 2013 | 2014 | 2013 | |||||
| Norwegian | Norwegian | |||||||
| Stand-alone | Stand-alone | |||||||
| Norwegian | Constant | Norwegian | Constant | |||||
| As Reported | Stand-alone | Currency | As Reported | As Reported | Stand-alone | Currency | As Reported | |
| Passenger ticket revenue | $ 556,881 | $ 460,338 | $ 464,609 | $ 415,399 | $ 2,212,547 | $ 2,116,004 | $ 2,117,499 | $ 1,815,869 |
| Onboard and other revenue | 232,028 | 216,876 | 216,876 | 184,946 | 913,334 | 898,182 | 898,528 | 754,425 |
| Total revenue | 788,909 | 677,214 | 681,485 | 600,345 | 3,125,881 | 3,014,186 | 3,016,027 | 2,570,294 |
| Less: | ||||||||
| Commissions, transportation and other expense | 129,006 | 97,265 | 98,700 | 108,166 | 503,722 | 471,981 | 474,466 | 455,816 |
| Onboard and other expense | 51,220 | 45,253 | 45,253 | 42,095 | 224,000 | 218,033 | 218,379 | 195,526 |
| Net Revenue | 608,683 | 534,696 | 537,532 | 450,084 | 2,398,159 | 2,324,172 | 2,323,182 | 1,918,952 |
| Non-GAAP Adjustment: | ||||||||
| Deferred revenue (1) | 10,052 | -- | -- | -- | 10,052 | -- | -- | -- |
| Adjusted Net Revenue | $ 618,735 | $ 534,696 | $ 537,532 | $ 450,084 | $ 2,408,211 | $ 2,324,172 | $ 2,323,182 | $ 1,918,952 |
| Capacity Days | 3,398,468 | 3,138,164 | 3,138,164 | 2,745,734 | 12,512,459 | 12,252,155 | 12,252,155 | 10,446,216 |
| Gross Yield | $ 232.14 | $ 215.80 | $ 217.16 | $ 218.65 | $ 249.82 | $ 246.01 | $ 246.16 | $ 246.05 |
| Net Yield | $ 179.11 | $ 170.38 | $ 171.29 | $ 163.92 | $ 191.66 | $ 189.69 | $ 189.61 | $ 183.70 |
| Adjusted Net Yield | $ 182.06 | $ 170.38 | $ 171.29 | $ 163.92 | $ 192.47 | $ 189.69 | $ 189.61 | $ 183.70 |
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(1) Reflects deferred revenue fair value adjustments totalling |
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| 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 | Year Ended | |||||||
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| 2014 | 2013 | 2014 | 2013 | |||||
| Norwegian | Norwegian | |||||||
| Stand-alone | Stand-alone | |||||||
| Norwegian | Constant | Norwegian | Constant | |||||
| As Reported | Stand-alone | Currency | As Reported | As Reported | Stand-alone | Currency | As Reported | |
| Total cruise operating expense | $ 518,620 | $ 435,777 | $ 437,282 | $ 417,789 | $ 1,946,624 | $ 1,863,781 | $ 1,864,814 | $ 1,657,659 |
| Marketing, general and administrative expense | 139,585 | 111,046 | 111,673 | 64,232 | 403,169 | 374,630 | 374,080 | 301,155 |
| Gross Cruise Cost | 658,205 | 546,823 | 548,955 | 482,021 | 2,349,793 | 2,238,411 | 2,238,894 | 1,958,814 |
| Less: | ||||||||
| Commissions, transportation and other expense | 129,006 | 97,265 | 98,700 | 108,166 | 503,722 | 471,981 | 474,466 | 455,816 |
| Onboard and other expense | 51,220 | 45,253 | 45,253 | 42,095 | 224,000 | 218,033 | 218,379 | 195,526 |
| Net Cruise Cost | 477,979 | 404,305 | 405,002 | 331,760 | 1,622,071 | 1,548,397 | 1,546,049 | 1,307,472 |
| Less: Fuel expense | 89,478 | 78,592 | 78,592 | 78,324 | 326,231 | 315,345 | 315,345 | 303,439 |
| Net Cruise Cost Excluding Fuel | 388,501 | 325,713 | 326,410 | 253,436 | 1,295,840 | 1,233,052 | 1,230,704 | 1,004,033 |
| Less Non-GAAP Adjustments: | ||||||||
| Non-cash share-based compensation related to the IPO (1) | -- | -- | -- | -- | -- | -- | -- | 18,527 |
| Non-cash compensation payroll and related (2) | 2,549 | 2,549 | 2,549 | -- | 7,693 | 7,693 | 7,693 | -- |
| Non-cash compensation (3) | 11,075 | 11,075 | 11,075 | 4,841 | 20,627 | 20,627 | 20,627 | 8,898 |
| Secondary Equity Offerings' expenses (4) | -- | -- | -- | 851 | 2,075 | 2,075 | 2,075 | 2,251 |
| Acquisition expenses (5) | 37,245 | 28,298 | 28,298 | -- | 57,513 | 48,566 | 48,566 | -- |
| Other (6) | 860 | 860 | 860 | 50 | 3,804 | 3,804 | 3,804 | 3,373 |
| Adjusted Net Cruise Cost Excluding Fuel | $ 336,772 | $ 282,931 | $ 283,628 | $ 247,694 | $ 1,204,128 | $ 1,150,287 | $ 1,147,939 | $ 970,984 |
| Capacity Days | 3,398,468 | 3,138,164 | 3,138,164 | 2,745,734 | 12,512,459 | 12,252,155 | 12,252,155 | 10,446,216 |
| Gross Cruise Cost per Capacity Day | $ 193.68 | $ 174.25 | $ 174.93 | $ 175.55 | $ 187.80 | $ 182.70 | $ 182.73 | $ 187.51 |
| Net Cruise Cost per Capacity Day | $ 140.65 | $ 128.83 | $ 129.06 | $ 120.83 | $ 129.64 | $ 126.38 | $ 126.19 | $ 125.16 |
| Net Cruise Cost Excluding Fuel per Capacity Day | $ 114.32 | $ 103.79 | $ 104.01 | $ 92.30 | $ 103.56 | $ 100.64 | $ 100.45 | $ 96.11 |
| Adjusted Net Cruise Cost Excluding Fuel per Capacity Day | $ 99.10 | $ 90.16 | $ 90.38 | $ 90.21 | $ 96.23 | $ 93.88 | $ 93.69 | $ 92.95 |
| (1) Non-cash share-based compensation expenses related to the IPO, which are included in Marketing, general and administrative expense. | ||||||||
| (2) Non-cash compensation expenses related to the crew pension plan, which are included in Payroll and related expense. | ||||||||
| (3) Non-cash share-based compensation expenses related to equity grants, which are included in Marketing, general and administrative expense. | ||||||||
| (4) Expenses related to the Secondary Equity Offerings, which are included in Marketing, general and administrative expense. | ||||||||
| (5) Expenses related to the Acquisition of Prestige, including legal, accounting and consulting services, as well as integration and severance costs, which are included in Marketing, general and administrative expense. | ||||||||
| (6) Primarily expenses 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 | |||||
|
|
|
|||||
| 2014 | 2013 | 2014 | 2013 | |||
| Norwegian | Norwegian | |||||
| As Reported | Stand-alone | As Reported | As Reported | Stand-alone | As Reported | |
|
Net income (loss) attributable to |
$ (25,609) | $ 5,763 | $ 36,092 | $ 338,352 | $ 369,724 | $ 101,714 |
| Net income (loss) attributable to non-controlling interest | (39) | (39) | 315 | 4,249 | 4,249 | 1,172 |
| Net income (loss) | (25,648) | 5,724 | 36,407 | 342,601 | 373,973 | 102,886 |
| Non-GAAP Adjustments: | ||||||
| Non-cash share-based compensation related to the IPO (1) | -- | -- | -- | -- | -- | 18,527 |
| Non-cash compensation payroll and related (2) | 2,549 | 2,549 | -- | 7,693 | 7,693 | -- |
| Non-cash share-based compensation (3) | 11,075 | 11,075 | 4,842 | 20,627 | 20,627 | 9,408 |
| Taxes related to changes in corporate structure (4) | 10,551 | 10,551 | (1,676) | 5,247 | 5,247 | (5) |
| Secondary Equity Offerings' expenses (5) | -- | -- | 851 | 2,075 | 2,075 | 2,251 |
| Debt related expenses (6) | 15,397 | 23,762 | -- | 15,397 | 23,762 | 160,573 |
| Acquisition expenses (7) | 37,245 | 28,298 | -- | 57,513 | 48,566 | -- |
| Deferred revenue (8) | 13,004 | -- | -- | 13,004 | -- | -- |
| Amortization of intangibles (9) | 12,600 | -- | -- | 12,600 | -- | -- |
| Other (10) | 860 | 860 | 50 | 3,804 | 3,804 | 2,150 |
| Adjusted Net Income | $ 77,633 | $ 82,819 | $ 40,474 | $ 480,561 | $ 485,747 | $ 295,790 |
| Diluted weighted-average shares outstanding - Net income (loss) | 212,698,622 (11) | |||||
| Diluted weighted-average shares outstanding - Adjusted Net Income | 218,009,812 | 208,754,142 | 210,914,163 | 212,017,784 | 209,684,848 | 209,239,484 |
| Diluted earnings (loss) per share | $ (0.12) | $ 0.03 | $ 0.17 | $ 1.62 | $ 1.78 | $ 0.49 |
| Adjusted EPS | $ 0.36 | $ 0.40 | $ 0.19 | $ 2.27 | $ 2.32 | $ 1.41 |
| (1) Non-cash share-based compensation expenses related to the IPO, which are included in Marketing, general and administrative expense. | ||||||
| (2) Non-cash compensation expenses related to the crew pension plan, which are included in Payroll and related expense. | ||||||
| (3) Non-cash share-based compensation expenses related to equity grants, which are included in Marketing, general and administrative expense. | ||||||
| (4) Taxes related to the Corporate Reorganization, which are included in Income tax benefit (expense). | ||||||
| (5) Expenses related to the Secondary Equity Offerings, 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 Acquisition of Prestige, including legal, accounting and consulting services, as well as integration and severance costs, which are included in Marketing, general and administrative expense. | ||||||
| (8) 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. | ||||||
| (9) Amortization of intangible assets related to the Acquisition of Prestige, which are included in Depreciation and amortization. | ||||||
| (10) Primarily expenses related to the Corporate Reorganization and the settlement of a 2007 breach of contract claim, which are included in Marketing, general and administrative expense. | ||||||
| (11) Due to a net loss excludes 5,311,190 shares, as including these would be antidilutive. | ||||||
| EBITDA and Adjusted EBITDA was calculated as follows (in thousands): | ||||||
| Three Months Ended | Year Ended | |||||
|
|
|
|||||
| 2014 | 2013 | 2014 | 2013 | |||
| Norwegian | Norwegian | |||||
| As Reported | Stand-alone | As Reported | As Reported | Stand-alone | As Reported | |
|
Net income (loss) attributable to |
$ (25,609) | $ 5,763 | $ 36,092 | $ 338,352 | $ 369,724 | $ 101,714 |
| Interest expense, net | 56,438 | 55,555 | 24,633 | 151,754 | 150,871 | 282,602 |
| Income tax expense (benefit) | 1,494 | 1,482 | 625 | (2,267) | (2,279) | 11,802 |
| Depreciation and amortization expense | 84,262 | 64,268 | 56,894 | 273,147 | 253,153 | 215,593 |
| EBITDA | 116,585 | 127,068 | 118,244 | 760,986 | 771,469 | 611,711 |
| Non-GAAP Adjustments: | ||||||
| Net income (loss) attributable to non-controlling interest | (39) | (39) | 315 | 4,249 | 4,249 | 1,172 |
| Other (income) expense | 14,158 | 3,362 | (235) | 10,853 | 57 | (1,403) |
| Non-cash share-based compensation related to the IPO (1) | -- | -- | -- | -- | -- | 18,527 |
| Non-cash compensation payroll and related (2) | 2,549 | 2,549 | -- | 7,693 | 7,693 | -- |
| Non-cash share-based compensation (3) | 11,075 | 11,075 | 4,841 | 20,627 | 20,627 | 11,623 |
| Secondary Equity Offerings' expenses (4) | -- | -- | 851 | 2,075 | 2,075 | 2,251 |
| Acquisition expenses (5) | 37,245 | 28,298 | -- | 57,513 | 48,566 | -- |
| Deferred revenue (6) | 10,052 | -- | -- | 10,052 | -- | -- |
| Other (7) | 860 | 860 | 50 | 3,804 | 3,804 | 3,314 |
| Adjusted EBITDA | $ 192,485 | $ 173,173 | $ 124,066 | $ 877,852 | $ 858,540 | $ 647,195 |
| (1) Non-cash share-based compensation expenses related to the IPO, which are included in Marketing, general and administrative expense. | ||||||
| (2) Non-cash compensation expenses related to the crew pension plan, which are included in Payroll and related expense. | ||||||
| (3) Non-cash share-based compensation expenses related to equity grants, which are included in Marketing, general and administrative expense. | ||||||
| (4) Expenses related to the Secondary Equity Offerings, which are included in Marketing, general and administrative expense. | ||||||
| (5) Expenses related to the Acquisition of Prestige, including legal, accounting and consulting services, as well as integration and severance costs, which are included in Marketing, general and administrative expense. | ||||||
| (6) Deferred revenue fair value adjustments related to the Acquisition of Prestige that were made pursuant to business combination accounting rules, which are included in Net Revenue. | ||||||
| (7) Primarily expenses 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) | ||
|
|
||
|
|
||
| 2014 | 2013 | |
| Long-term debt, net of current portion | $ 5,607,157 | $ 2,841,214 |
| Current portion of long-term | 576,947 | 286,575 |
| Total debt | 6,184,104 | 3,127,789 |
| Less: Cash and cash equivalents | 84,824 | 56,467 |
| Net Debt | 6,099,280 | 3,071,322 |
| Total shareholders' equity | 3,518,813 | 2,631,266 |
| Net Debt and shareholders' equity ("Capital") | $ 9,618,093 | $ 5,702,588 |
|
|
63.4% | 53.9% |
| Free Cash Flow and Adjusted Free Cash Flow were calculated as follows (in thousands): | ||
| Year Ended | ||
|
|
||
| 2014 | 2013 | |
| Net cash provided by operating activities | $ 635,601 | $ 475,281 |
| Less: Capital expenditures for ship construction (1) | (843,542) | (794,671) |
| Less: Capital expenditures for business enhancements and other | (208,432) | (100,180) |
| Free Cash Flow | (416,373) | (419,570) |
| Proceeds from ship construction financing facilities (1) | 818,062 | 640,586 |
| Fees related to debt prepayment | -- | 124,215 |
| Adjusted Free Cash Flow | $ 401,689 | $ 345,231 |
|
(1) Includes a ship purchased from a third party to join the |
||
CONTACT: Investor Relations Contact
Wendy Beck
(305) 436-4098
InvestorRelations@ncl.com
Media Contact
AnneMarie Mathews
(305) 436-4799
PublicRelations@ncl.com
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