Norwegian Cruise Line Holdings Reports Financial Results for the Second Quarter 2015
Second Quarter Adjusted EPS Improves 29.3% to
Second Quarter Adjusted EBITDA Improves 42.8% to
2016 Synergy Capture Increased to
New Exotic Itineraries Announced for the Norwegian Brand, Including Australia and
Second Quarter 2015 Highlights
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Improvement in Adjusted EPS of 29.3% to
$0.75 on Adjusted Net Income of$171.6 million .
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Increase in Adjusted Net Yield on a Combined Company basis of 1.5%, or 3.2% on a Constant Currency basis, driven by pricing improvement in the quarter. Increase of 18.2% on an as reported basis.
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Continued synergy identification efforts from the integration of Norwegian and Prestige lead to synergies of
$75 million in 2015 and$125 million in 2016 prior to reinvestment.
Second Quarter 2015 Results
"The benefits of the combination of Norwegian and Prestige are beginning to hit their full stride, resulting in strong earnings growth in the quarter," said
The Company generated Adjusted Net Income of
Adjusted Net Yield improved 18.2% (20.2% on a Constant Currency basis) mainly due to the addition of the
Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased 21.1% (22.0% on a Constant Currency basis), primarily as a result of the Acquisition of Prestige, while on a Combined Company basis decreased 4.7% (4.0% on a Constant Currency basis), primarily due to the timing of certain expenses that will now occur in the second half of the year. The Company's fuel price per metric ton, net of hedges, decreased 10.3% to
Interest expense, net increased to
2015 Guidance and Sensitivities
In addition to the results for the second quarter, the Company also provided guidance for the third 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 the results of Prestige assuming the acquisition had occurred at the beginning of 2014.
The strong booking environment that began with the 2015 wave season has continued into the second and third quarters with volumes continually outpacing the same time last year. Looking to 2016, resurgence in
"Building on the strong results for the first half of the year, we are raising the midpoint of our 2015 full year earnings guidance," said
Third Quarter 2015 | Full Year 2015 | |||||||
Combined Company (1) | Combined Company (1) | |||||||
As Reported |
Constant Currency |
As Reported |
Constant Currency |
As Reported |
Constant Currency |
As Reported |
Constant Currency |
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Adjusted Net Yield |
18.0 to 19.0% |
20.5 to 21.5% |
0.5 to 1.5% |
2.75 to 3.75% |
Approx. 17.5% |
Approx. 19.0% |
Approx. 1.5% |
Approx. 3.0% |
Adjusted Net Cruise Cost Excluding Fuel per Capacity Day |
28.5 to 29.5% |
29.75 to 30.75% |
5.0 to 6.0% |
6.0 to 7.0% |
Approx. 23.25% |
Approx. 23.75% |
Approx. 2.5% |
Approx. 3.0% |
Adjusted EPS |
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Depreciation and amortization (2) |
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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 third quarter and full year 2014 | ||||||||
(2) Adjusted to exclude amortization of intangible assets related to the Acquisition of Prestige | ||||||||
(3) Based on midpoint of guidance |
The following reflects the Company's expectations regarding fuel consumption and pricing, along with accompanying sensitivities.
Third Quarter 2015 | Full Year 2015 | |
Fuel consumption in metric tons | 160,000 | 675,000 |
Fuel price per metric ton, excluding hedges |
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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 ship construction contracts, and future expected capital expenditures necessary for operations. As of
Company Updates and Other Business Highlights
Integration Update
The integration efforts as a result of the Acquisition of Prestige are substantially complete. The Company reiterates its 2015 gross synergy capture of
As part of the Acquisition of Prestige a contingent consideration of up to
International Business Development Update
A number of milestones supporting the Company's international business development strategy are well underway, including the establishment of a sales and marketing center in
The Company has substantially completed its study and assessment of entering the
Other Highlights
The Company announced new exotic itineraries for 2016, including
Conference Call
The Company has scheduled a conference call for
About
These brands operate a combined 21 ships with approximately 40,000 lower berths and offer itineraries to approximately 510 destinations worldwide. The Company's brands will introduce six additional 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.
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 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.
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.
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 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.
Management NCL Corporation Units. NCLC's previously outstanding profits interests issued to management (or former management) of NCLC which were converted into units in NCLC in connection with the Corporate Reorganization.
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 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). 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.
Non-GAAP Financial Measures
We use certain non-GAAP financial measures, such as Net Revenue, Adjusted Net Revenue, Gross Yield, Net Yield, Adjusted 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
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 Income and Adjusted EPS are non-GAAP financial measures that exclude certain charges 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, 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. The charges excluded in the presentation of Adjusted Net Income and Adjusted EPS may vary from period to period; accordingly, 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 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 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, including, without limitation, those regarding our business strategy, financial position, results of operations, plans, prospects and objectives of management for future operations (including development plans and objectives relating to our activities), 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 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; the impact of our hedging strategies; 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 significant percentage of ordinary shares held by our Sponsors; 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
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CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(Unaudited) | ||||
(in thousands, except share and per share data) | ||||
Three Months Ended |
Six Months Ended |
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2015 | 2014 | 2015 | 2014 | |
Revenue | ||||
Passenger ticket | $ 787,991 | $ 528,782 | $ 1,458,474 | $ 977,362 |
Onboard and other | 297,442 | 237,145 | 565,141 | 452,593 |
Total revenue | 1,085,433 | 765,927 | 2,023,615 | 1,429,955 |
Cruise operating expense | ||||
Commissions, transportation and other | 192,438 | 114,712 | 364,265 | 231,522 |
Onboard and other | 67,885 | 55,467 | 126,530 | 103,391 |
Payroll and related | 161,930 | 106,352 | 319,559 | 205,418 |
Fuel | 91,581 | 77,832 | 178,955 | 156,872 |
Food | 43,699 | 42,734 | 85,550 | 80,417 |
Other | 98,746 | 73,699 | 205,120 | 139,086 |
Total cruise operating expense | 656,279 | 470,796 | 1,279,979 | 916,706 |
Other operating expense | ||||
Marketing, general and administrative | 107,164 | 83,084 | 261,321 | 166,473 |
Depreciation and amortization | 104,607 | 63,459 | 204,583 | 125,099 |
Total other operating expense | 211,771 | 146,543 | 465,904 | 291,572 |
Operating income | 217,383 | 148,588 | 277,732 | 221,677 |
Non-operating income (expense) | ||||
Interest expense, net | (52,446) | (31,860) | (103,435) | (63,032) |
Other income (expense) | (3,717) | (325) | (33,856) | 63 |
Total non-operating income (expense) | (56,163) | (32,185) | (137,291) | (62,969) |
Net income before income taxes | 161,220 | 116,403 | 140,441 | 158,708 |
Income tax benefit (expense) | (2,726) | (3,124) | (3,403) | 6,263 |
Net income | 158,494 | 113,279 | 137,038 | 164,971 |
Net income attributable to non-controlling interest | -- | 1,663 | -- | 2,088 |
Net income attributable to |
$ 158,494 | $ 111,616 | $ 137,038 | $ 162,883 |
Weighted-average shares outstanding | ||||
Basic | 225,698,078 | 204,965,718 | 225,003,460 | 205,063,870 |
Diluted | 230,228,144 | 210,472,991 | 229,664,210 | 210,742,655 |
Earnings (loss) per share | ||||
Basic | $ 0.70 | $ 0.54 | $ 0.61 | $ 0.79 |
Diluted | $ 0.69 | $ 0.54 | $ 0.60 | $ 0.78 |
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
(Unaudited) | ||||
(in thousands) | ||||
Three Months Ended |
Six Months Ended |
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2015 | 2014 | 2015 | 2014 | |
Net income | $ 158,494 | $ 113,279 | $ 137,038 |
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Other comprehensive income (loss): | ||||
Shipboard Retirement Plan | 120 | 95 | 239 | 189 |
Cash flow hedges: | ||||
Net unrealized income (loss) | 70,491 | 8,797 | (33,274) | (6,559) |
Amount realized and reclassified into earnings | 26,564 | (147) | 48,450 | 6 |
Total other comprehensive income (loss) | 97,175 | 8,745 | 15,415 | (6,364) |
Total comprehensive income | 255,669 | 122,024 | 152,453 | 158,607 |
Comprehensive income attributable to non-controlling interest | -- | 1,757 | -- | 2,045 |
Total comprehensive income attributable to |
$ 255,669 | $ 120,267 | $ 152,453 |
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CONSOLIDATED BALANCE SHEETS | |||
(Unaudited) | |||
(in thousands, except share data) | |||
2015 |
2014 |
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Assets | |||
Current assets: | |||
Cash and cash equivalents | $ 172,958 | $ 84,824 | |
Accounts receivable, net | 36,801 | 32,432 | |
Inventories | 59,801 | 56,555 | |
Prepaid expenses and other assets | 130,357 | 109,924 | |
Total current assets | 399,917 | 283,735 | |
Property and equipment, net | 8,674,815 | 8,623,773 | |
Goodwill | 1,388,931 | 1,388,931 | |
Intangible assets | 958,394 | 994,997 | |
Other long-term assets | 265,330 | 281,641 | |
Total assets | $ 11,687,387 | $ 11,573,077 | |
Liabilities and shareholders' equity | |||
Current liabilities: | |||
Current portion of long-term debt | $ 585,875 | $ 576,947 | |
Accounts payable | 55,061 | 101,983 | |
Accrued expenses and other liabilities | 581,216 | 552,514 | |
Due to affiliate | 38,737 | 37,948 | |
Advance ticket sales | 1,213,199 | 817,207 | |
Total current liabilities | 2,474,088 | 2,086,599 | |
Long-term debt | 5,178,044 | 5,607,157 | |
Due to affiliate | -- | 18,544 | |
Other long-term liabilities | 294,800 | 341,964 | |
Total liabilities | 7,946,932 | 8,054,264 | |
Commitments and contingencies | |||
Shareholders' equity: | |||
Ordinary shares, |
232 | 230 | |
Additional paid-in capital | 3,771,531 | 3,702,344 | |
Accumulated other comprehensive income (loss) | (227,227) | (242,642) | |
Retained earnings | 277,919 | 140,881 | |
Treasury shares (3,152,770 and 2,486,350 ordinary shares at |
(82,000) | (82,000) | |
Total shareholders' equity | 3,740,455 | 3,518,813 | |
Total liabilities and shareholders' equity | $ 11,687,387 | $ 11,573,077 |
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CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
(Unaudited) | ||
(in thousands) | ||
Six Months Ended |
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2015 | 2014 | |
Cash flows from operating activities | ||
Net income | $ 137,038 | $ 164,971 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 214,717 | 141,228 |
Loss (gain) on derivatives | 27,475 | (62) |
Deferred income taxes, net | 424 | 2,786 |
Contingent consideration | (43,400) | -- |
Write-off of deferred financing fees | 195 | -- |
Share-based compensation expense | 14,166 | 5,079 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (4,369) | (8,885) |
Inventories | (3,246) | (8,851) |
Prepaid expenses and other assets | (15,472) | (8,943) |
Accounts payable | (47,038) | 15,967 |
Accrued expenses and other liabilities | (949) | 20,905 |
Advance ticket sales | 412,602 | 194,913 |
Net cash provided by operating activities | 692,143 | 519,108 |
Cash flows from investing activities | ||
Additions to property and equipment | (186,504) | (787,566) |
Net cash used in investing activities | (186,504) | (787,566) |
Cash flows from financing activities | ||
Repayments of long-term debt | (791,403) | (540,237) |
Repayments to Affiliate | (18,522) | (18,521) |
Proceeds from long-term debt | 340,060 | 914,545 |
Proceeds from the exercise of share options | 55,023 | 2,158 |
Purchases of treasury shares | -- | (79,155) |
NCLC partnership tax distributions | -- | (3,115) |
Deferred financing fees and other | (2,663) | (201) |
Net cash provided by (used in) financing activities | (417,505) | 275,474 |
Net increase in cash and cash equivalents | 88,134 | 7,016 |
Cash and cash equivalents at beginning of the period | 84,824 | 56,467 |
Cash and cash equivalents at end of the period | $ 172,958 | $ 63,483 |
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NON-GAAP RECONCILING INFORMATION | ||||||
(Unaudited) | ||||||
The following table sets forth selected statistical information: | ||||||
Three Months Ended |
Six Months Ended |
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2015 | 2014 | 2015 | 2014 | |||
Passengers carried | 527,676 | 482,837 | 1,041,202 | 990,109 | ||
Passenger Cruise Days | 3,948,773 | 3,394,649 | 7,716,888 | 6,470,051 | ||
Capacity Days | 3,634,143 | 3,074,415 | 7,190,611 | 5,970,399 | ||
Occupancy Percentage | 108.7% | 110.4% | 107.3% | 108.4% | ||
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 |
Six Months Ended |
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2015 |
2015 Constant Currency |
2014 |
2015 |
2015 Constant Currency |
2014 |
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Passenger ticket revenue | $ 787,991 | $ 806,372 | $ 528,782 | $ 1,458,474 | $ 1,485,065 | $ 977,362 |
Onboard and other revenue | 297,442 | 296,994 | 237,145 | 565,141 | 564,693 | 452,593 |
Total revenue | 1,085,433 | 1,103,366 | 765,927 | 2,023,615 | 2,049,758 | 1,429,955 |
Less: | ||||||
Commissions, transportation and other expense | 192,438 | 196,721 | 114,712 | 364,265 | 370,510 | 231,522 |
Onboard and other expense | 67,885 | 67,435 | 55,467 | 126,530 | 126,080 | 103,391 |
Net Revenue | 825,110 | 839,210 | 595,748 | 1,532,820 | 1,553,168 | 1,095,042 |
Non-GAAP Adjustment: | ||||||
Deferred revenue (1) | 7,294 | 7,294 | -- | 28,488 | 28,488 | -- |
Adjusted Net Revenue | $ 832,404 | $ 846,504 | $ 595,748 | $ 1,561,308 | $ 1,581,656 | $ 1,095,042 |
Capacity Days | 3,634,143 | 3,634,143 | 3,074,415 | 7,190,611 | 7,190,611 | 5,970,399 |
Gross Yield | $ 298.68 | $ 303.61 | $ 249.13 | $ 281.42 | $ 285.06 | $ 239.51 |
Net Yield | $ 227.04 | $ 230.92 | $ 193.78 | $ 213.17 | $ 216.00 | $ 183.41 |
Adjusted Net Yield | $ 229.05 | $ 232.93 | $ 193.78 | $ 217.13 | $ 219.96 | $ 183.41 |
(1) Reflects deferred revenue fair value adjustments totaling |
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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 |
Six Months Ended |
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2015 |
2015 Constant Currency |
2014 |
2015 |
2015 Constant Currency |
2014 |
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Total cruise operating expense | $ 656,279 | $ 661,730 | $ 470,796 | $ 1,279,979 | $ 1,288,029 | $ 916,706 |
Marketing, general and administrative expense | 107,164 | 108,738 | 83,084 | 261,321 | 264,051 | 166,473 |
Gross Cruise Cost | 763,443 | 770,468 | 553,880 | 1,541,300 | 1,552,080 | 1,083,179 |
Less: | ||||||
Commissions, transportation and other expense | 192,438 | 196,722 | 114,712 | 364,265 | 370,510 | 231,522 |
Onboard and other expense | 67,885 | 67,435 | 55,467 | 126,530 | 126,080 | 103,391 |
Net Cruise Cost | 503,120 | 506,311 | 383,701 | 1,050,505 | 1,055,490 | 748,266 |
Less: Fuel expense | 91,581 | 91,581 | 77,832 | 178,955 | 178,955 | 156,872 |
Net Cruise Cost Excluding Fuel | 411,539 | 414,730 | 305,869 | 871,550 | 876,535 | 591,394 |
Less Non-GAAP Adjustments: | ||||||
Non-cash deferred compensation (1) | 1,029 | 1,029 | 1,770 | 2,482 | 2,482 | 2,609 |
Non-cash share-based compensation (2) | 2,161 | 2,161 | 3,244 | 14,166 | 14,166 | 5,079 |
Secondary Equity Offerings' expenses (3) | 1,022 | 1,022 | -- | 1,022 | 1,022 | 1,877 |
Severance payments and other fees (4) | 3,289 | 3,289 | -- | 13,676 | 13,676 | -- |
Management NCL Corporation Units exchange expenses (5) | -- | -- | -- | 624 | 624 | -- |
Acquisition of Prestige expenses (6) | 10,891 | 10,891 | -- | 11,291 | 11,291 | -- |
Contingent consideration adjustment (7) | (34,300) | (34,300) | -- | (43,400) | (43,400) | -- |
Other (8) | -- | -- | 2,331 | -- | -- | 2,331 |
Adjusted Net Cruise Cost Excluding Fuel | $ 427,447 | $ 430,638 | $ 298,524 | $ 871,689 | $ 876,674 | $ 579,498 |
Capacity Days | 3,634,143 | 3,634,143 | 3,074,415 | 7,190,611 | 7,190,611 | 5,970,399 |
Gross Cruise Cost per Capacity Day | $ 210.08 | $ 212.01 | $ 180.16 | $ 214.35 | $ 215.85 | $ 181.42 |
Net Cruise Cost per Capacity Day | $ 138.44 | $ 139.32 | $ 124.80 | $ 146.09 | $ 146.79 | $ 125.33 |
Net Cruise Cost Excluding Fuel per Capacity Day | $ 113.24 | $ 114.12 | $ 99.49 | $ 121.21 | $ 121.90 | $ 99.05 |
Adjusted Net Cruise Cost Excluding Fuel per Capacity Day | $ 117.62 | $ 118.50 | $ 97.10 | $ 121.23 | $ 121.92 | $ 97.06 |
(1) Non-cash share-based compensation expenses related to the crew pension plan, which are included in payroll and related expense. | ||||||
(2) Non-cash share-based compensation expense related to equity grants, 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) 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. |
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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 |
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2015 | 2014 | 2015 | 2014 | |||||||||||
Net income attributable to |
$ 158,494 | $ 111,616 | $ 137,038 | $ 162,883 | ||||||||||
Net income attributable to non-controlling interest | -- | 1,663 | -- | 2,088 | ||||||||||
Net income | 158,494 | 113,279 | 137,038 | 164,971 | ||||||||||
Non-GAAP Adjustments: | ||||||||||||||
Non-cash deferred compensation (1) | 1,029 | 1,770 | 2,482 | 2,609 | ||||||||||
Non-cash share-based compensation (2) | 2,334 | 3,244 | 14,339 | 5,079 | ||||||||||
Secondary Equity Offerings' expenses (3) | 1,022 | -- | 1,022 | 1,877 | ||||||||||
Tax benefit (4) | -- | 511 | -- | (6,174) | ||||||||||
Severance payments and other fees (5) | 3,289 | -- | 13,676 | -- | ||||||||||
Management NCL Corporation Units exchange expenses (6) | -- | -- | 624 | -- | ||||||||||
Acquisition of Prestige expenses (7) | 10,891 | -- | 11,291 | -- | ||||||||||
Deferred revenue (8) | 7,294 | -- | 28,488 | -- | ||||||||||
Amortization of intangible assets (9) | 20,913 | -- | 39,059 | -- | ||||||||||
Contingent consideration adjustment (10) | (34,300) | -- | (43,400) | -- | ||||||||||
Derivative adjustment (11) | 650 | -- | 29,603 | -- | ||||||||||
Other (12) | -- | 2,331 | -- | 2,331 | ||||||||||
Adjusted Net Income | $ 171,616 | $ 121,135 | $ 234,222 | $ 170,693 | ||||||||||
Diluted weighted-average shares outstanding - Net income | 230,228,144 | 210,472,991 | 229,664,210 | 210,742,655 | ||||||||||
Diluted weighted-average shares outstanding - Adjusted Net Income | 230,228,144 | 210,472,991 | 229,664,210 | 210,742,655 | ||||||||||
Diluted earnings per share | $ 0.69 | $ 0.54 | $ 0.60 | $ 0.78 | ||||||||||
Adjusted EPS | $ 0.75 | $ 0.58 | $ 1.02 | $ 0.81 | ||||||||||
(1) Non-cash share-based compensation expenses related to the crew pension plan, which are included in payroll and related expense. | ||||||||||||||
(2) Non-cash share-based compensation expense related to equity grants, 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) Tax benefit of |
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(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 exchange of Management NCL Corporation Units for ordinary shares, which are included in marketing, general and administrative expense. | ||||||||||||||
(7) Expenses related to the Acquisition of Prestige, 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 expense. | ||||||||||||||
(10) Contingent consideration fair value adjustment related to the Acquisition of Prestige, which is included in marketing, general and administrative expense. | ||||||||||||||
(11) Losses of approximately |
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(12) Expenses primarily associated 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. | ||||||||||||||
EBITDA and Adjusted EBITDA was calculated as follows (in thousands): | ||||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
Net income attributable to |
$ 158,494 | $ 111,616 | $ 137,038 | $ 162,883 | ||||||||||
Interest expense, net | 52,446 | 31,860 | 103,435 | 63,032 | ||||||||||
Income tax (benefit) expense | 2,726 | 3,124 | 3,403 | (6,263) | ||||||||||
Depreciation and amortization expense | 104,607 | 63,459 | 204,583 | 125,099 | ||||||||||
EBITDA | 318,273 | 210,059 | 448,459 | 344,751 | ||||||||||
Net income attributable to non-controlling interest | -- | 1,663 | -- | 2,088 | ||||||||||
Other (income) expense | 3,717 | 325 | 33,856 | (63) | ||||||||||
Non-GAAP Adjustments: | ||||||||||||||
Non-cash deferred compensation (1) | 1,029 | 1,770 | 2,482 | 2,609 | ||||||||||
Non-cash share-based compensation (2) | 2,161 | 3,244 | 14,166 | 5,079 | ||||||||||
Secondary Equity Offerings' expenses (3) | 1,022 | -- | 1,022 | 1,877 | ||||||||||
Severance payments and other fees (4) | 3,289 | -- | 13,676 | -- | ||||||||||
Management NCL Corporation Units exchange expenses (5) | -- | -- | 624 | -- | ||||||||||
Acquisition of Prestige expenses (6) | 10,891 | -- | 11,291 | -- | ||||||||||
Deferred revenue (7) | 7,294 | -- | 28,488 | -- | ||||||||||
Contingent consideration adjustment (8) | (34,300) | -- | (43,400) | -- | ||||||||||
Other (9) | -- | 2,331 | -- | 2,331 | ||||||||||
Adjusted EBITDA | $ 313,376 | $ 219,392 | $ 510,664 | $ 358,672 | ||||||||||
(1) Non-cash share-based compensation expenses related to the crew pension plan, which are included in payroll and related expense. | ||||||||||||||
(2) Non-cash share-based compensation expense related to equity grants, 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) Expenses primarily associated 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. |
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NON-GAAP RECONCILING INFORMATION | ||
(Unaudited) | ||
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2015 |
2014 |
|
Long-term debt, net of current portion | $ 5,178,044 | $ 5,607,157 |
Current portion of long-term | 585,875 | 576,947 |
Total debt | 5,763,919 | 6,184,104 |
Less: Cash and cash equivalents | 172,958 | 84,824 |
Net Debt | 5,590,961 | 6,099,280 |
Total shareholders' equity | 3,740,455 | 3,518,813 |
Net Debt and shareholders' equity | $ 9,331,416 | $ 9,618,093 |
|
59.9% | 63.4% |
Adjusted Free Cash Flow was calculated as follows (in thousands): | ||
Six Months Ended |
||
2015 | 2014 | |
Net cash provided by operating activities | $ 692,143 | $ 519,108 |
Less: Capital expenditures for ship construction | (105,203) | (731,682) |
Less: Capital expenditures for business enhancements and other | (81,301) | (55,884) |
Free Cash Flow | 505,639 | (268,458) |
Proceeds from ship construction financing facilities | 36,021 | 660,430 |
Adjusted Free Cash Flow | $ 541,660 | $ 391,972 |
CONTACT: Investor Relations ContactSource:Andrea DeMarco (305) 468-2463 InvestorRelations@ncl.com Media ContactsJason Lasecki (305) 514-3912Vanessa Picariello (305) 436-4713 PublicRelations@ncl.com
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