Norwegian Cruise Line Holdings Reports Financial Results for the First Quarter 2017
Company Reports Record First Quarter Revenue of
Strong Operating Environment Results in an Increase of Full Year Guidance
Norwegian Joy, Custom-Built Ship for
Highlights
- The Company generated GAAP net income of
$61.9 million or EPS of$0.27 compared to$73.2 million or$0.32 in the prior year. Adjusted Net Income was$91.2 million or Adjusted EPS of$0.40 compared to$86.7 million or$0.38 in the prior year.
- Total revenue increased 6.8% to
$1.2 billion . Gross Yield increased 5.7%. Adjusted Net Yield increased 5.5% on a Constant Currency basis.
- 2017 full year Adjusted Net Yield growth guidance on a Constant Currency basis increased 100 basis points to 2.75%.
- The Company expects to generate record earnings for full year 2017 and has increased its outlook, with Adjusted EPS now expected to be in the range of
$3.79 to$3.89 .
"2017 is off to a solid start with strong first quarter results which include record revenue of
First Quarter 2017 Results
GAAP net income was
Revenue increased 6.8% to
Gross Cruise Cost increased 7.9% compared to 2016 due to an increase in total cruise operating expense and marketing, general and administrative expenses. Gross Cruise Costs per Capacity Day increased 6.8%. Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased 5.8% on both a Constant Currency and as reported basis primarily due to an increase in maintenance and repairs including Dry-dock and crew payroll and related costs.
Fuel price per metric ton, net of hedges increased 3.4% to
Interest expense, net decreased to
Other income (expense), net was an expense of
Company Outlook
"A strong end to the most successful Wave season in recent history resulted in a meaningful improvement in our full year booked position, with both occupancy and pricing now well ahead of prior year," said
2017 Guidance and Sensitivities
In addition to announcing the results for the first quarter, the Company also provided guidance for the second quarter and full year 2017, 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 2017 guidance and the most directly comparable GAAP measures because it would be too difficult to prepare a reliable
Second Quarter 2017 | Full Year 2017 | |||||||||||||
As Reported | Constant Currency |
As Reported | Constant Currency |
|||||||||||
Adjusted Net Yield | Approx. 4.75% | Approx. 5.5% | Approx. 2.25% | Approx. 2.75% | ||||||||||
Adjusted Excluding Fuel per Capacity Day |
Approx. 2.75% | Approx. 2.75% | Approx. 1.5% | Approx. 1.5% | ||||||||||
Adjusted EPS | Approx. |
|||||||||||||
Adjusted Depreciation and Amortization (1) |
|
Approx. |
||||||||||||
Adjusted Interest Expense, net | Approx. |
Approx. |
||||||||||||
Effect on Adjusted EPS of a 1% change in Adjusted Net Yield (2) |
$ | 0.05 | ||||||||||||
Effect on Adjusted EPS of a 1% change in Adjusted Excluding Fuel per Capacity Day (2) |
$ | 0.02 | ||||||||||||
(1) Excludes |
||||||||||||||
(2) Based on midpoint of guidance. | ||||||||||||||
(3) For the remaining quarters of 2017. | ||||||||||||||
The following reflects the Company's expectations regarding fuel consumption and pricing, along with accompanying sensitivities.
|
Second Quarter 2017 |
Full Year 2017 |
|||
Fuel consumption in metric tons | 185,000 | 780,000 | |||
Fuel price per metric ton, net of hedges | |||||
Effect on Adjusted EPS of a 10% change in fuel prices, net of hedges |
(1) For the remaining quarters of 2017.
As of
Remainder of 2017 | 2018 | 2019 | 2020 | ||||||||||||
% of HFO Consumption Hedged | 83 | % | 78 | % | 56 | % | 50 | % | |||||||
Average USGC Price / Barrel | |||||||||||||||
% of MGO Consumption Hedged | 67 | % | 23 | % | 23 | % | - | ||||||||
Average |
- |
The following reflects the foreign currency exchange rates the Company used in its Second Quarter and Full Year 2017 guidance.
Current Guidance - May | Prior Guidance - February | |||||||
Euro | ||||||||
British pound | ||||||||
Australian Dollar | ||||||||
Canadian Dollar | ||||||||
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
Project Leonardo will introduce an additional four ships with expected delivery dates through 2025 with an option to introduce two additional ships for delivery in 2026 and 2027, subject to certain conditions. These four ships are each approximately 140,000 Gross Tons with approximately 3,300 Berths. The contract price for each of the additional four ships is approximately €800.0 million or
Company Updates and Other Business Highlights
Company Receives Approval to Sail to
The Company made history this spring as the first major
Share Repurchase Program Extended Through
The Company's Board of Directors extended its three-year,
Company Releases 2016 Environmental Report
The Company released its 2016 Environmental Report and unveiled its global environmental program, ‘Sail & Sustain'. This encompassing program highlights the Company's progress on its global environmental initiatives as well as the Company's environmental objectives, which include increasing sustainable sourcing, minimizing landfill waste, investing in emerging technologies, and reducing CO2 emissions.
Update on The Norwegian Edge™
In March, Norwegian Jade sailed into her seasonal homeport of
Delivery of Norwegian Joy
On
The Company recently announced the launch of a new partnership with
Conference Call
The Company has scheduled a conference call for
About
With a combined fleet of 25 ships with approximately 50,400 berths, these brands offer itineraries to more than 510 destinations worldwide. The Company will introduce seven additional ships through 2025, and has an option to introduce two additional ships for delivery in 2026 and 2027.
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.
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 cabin (single occupancy per studio cabin) even though many cabins can accommodate three or more passengers.
Breakaway Class Ships. Norwegian Breakaway and Norwegian Getaway.
Breakaway Plus Class Ships. The next generation of ships which are similar in design and innovation to Breakaway Class Ships.
Capacity Days. Available Berths multiplied by the number of cruise days for the period.
Constant Currency. A calculation whereby foreign currency-denominated revenues and expenses in a period are converted at the
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.
Explorer Class Ships. Regent's Seven Seas Explorer and a second ship on order.
GAAP. Generally accepted accounting principles in the
Gross Cruise Cost. The sum of total cruise operating expense and marketing, general and administrative expense.
Gross Tons. A unit of enclosed passenger space on a cruise ship, such that one gross ton = 100 cubic feet or 2.831 cubic meters.
Gross Yield. Total revenue per Capacity Day.
Merger Agreement. Agreement and Plan of Merger, dated as of
Net Cruise Cost Excluding Fuel.
Net Revenue. Total revenue less commissions, transportation and other expense and onboard and other expense.
Net Yield. Net Revenue per Capacity Day.
Occupancy Percentage or Load Factor. The ratio of Passenger Cruise Days to Capacity Days. A percentage in excess of 100% indicates that three or more passengers occupied some cabins.
Passenger Cruise Days. The number of passengers carried for the period, multiplied by the number of days in their respective cruises.
Project Leonardo. The next generation of ships for our Norwegian brand.
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, Net Yield, Adjusted Net Yield,
As our business includes the sourcing of passengers and deployment of vessels outside of the
We believe that Adjusted EBITDA is appropriate as a supplemental financial measure as it is used by management to assess operating performance. We believe that Adjusted EBITDA is a useful measure in determining our performance as it reflects certain operating drivers of our business, such as sales growth, operating costs, marketing, general and administrative expense and other operating income and expense. Adjusted EBITDA is not a defined term under GAAP. Adjusted EBITDA is not intended to be a measure of liquidity or cash flows from operations or a measure comparable to net income as it does not take into account certain requirements such as capital expenditures and related depreciation, principal and interest payments and tax payments and it includes other supplemental adjustments.
In addition, Adjusted Net Revenue and Adjusted Net Yield, which exclude certain business combination accounting entries, are non-GAAP financial measures that we believe are useful as supplemental measures in evaluating the performance of our operating business and provide greater transparency into our results of operations. Adjusted Net Income and Adjusted EPS are non-GAAP financial measures that exclude certain amounts and are used to supplement GAAP net income and EPS. We use Adjusted Net Income and Adjusted EPS as key performance measures of our earnings performance. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparison to our historical performance. 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 Revenue, Adjusted Net Yield, Adjusted Net Income, and Adjusted EPS may not be indicative of future adjustments or results. For example, for the year 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 constitute forward-looking statements within the meaning of the
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(in thousands, except share and per share data) | ||||||||||||||||
Three Months Ended | ||||||||||||||||
2017 | 2016 | |||||||||||||||
Revenue | ||||||||||||||||
Passenger ticket | $ | 786,694 | $ | 740,112 | ||||||||||||
Onboard and other | 364,087 | 337,520 | ||||||||||||||
Total revenue | 1,150,781 | 1,077,632 | ||||||||||||||
Cruise operating expense | ||||||||||||||||
Commissions, transportation and other | 194,140 | 175,437 | ||||||||||||||
Onboard and other | 68,411 | 63,965 | ||||||||||||||
Payroll and related | 192,636 | 177,143 | ||||||||||||||
Fuel | 88,886 | 81,672 | ||||||||||||||
Food | 46,178 | 51,003 | ||||||||||||||
Other | 129,547 | 115,261 | ||||||||||||||
Total cruise operating expense | 719,798 | 664,481 | ||||||||||||||
Other operating expense | ||||||||||||||||
Marketing, general and administrative | 192,044 | 180,574 | ||||||||||||||
Depreciation and amortization | 119,205 | 101,295 | ||||||||||||||
Total other operating expense | 311,249 | 281,869 | ||||||||||||||
Operating income | 119,734 | 131,282 | ||||||||||||||
Non-operating income (expense) | ||||||||||||||||
Interest expense, net | (52,960 | ) | (59,754 | ) | ||||||||||||
Other income (expense), net | (2,815 | ) | 2,805 | |||||||||||||
Total non-operating income (expense) | (55,775 | ) | (56,949 | ) | ||||||||||||
Net income before income taxes | 63,959 | 74,333 | ||||||||||||||
Income tax expense | (2,049 | ) | (1,104 | ) | ||||||||||||
Net income | $ | 61,910 | $ | 73,229 | ||||||||||||
Weighted-average shares outstanding | ||||||||||||||||
Basic | 227,468,526 | 227,239,533 | ||||||||||||||
Diluted | 228,555,952 | 228,112,035 | ||||||||||||||
Earnings per share | ||||||||||||||||
Basic | $ | 0.27 | $ | 0.32 | ||||||||||||
Diluted | $ | 0.27 | $ | 0.32 | ||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||
(Unaudited) | ||||||||||||
(in thousands) | ||||||||||||
Three Months Ended | ||||||||||||
2017 | 2016 | |||||||||||
Net income | $ | 61,910 | $ | 73,229 | ||||||||
Other comprehensive income: | ||||||||||||
Shipboard Retirement Plan | 105 | 108 | ||||||||||
Cash flow hedges: | ||||||||||||
Net unrealized gain (loss) | (7,283 | ) | 70,450 | |||||||||
Amount realized and reclassified into earnings | 9,705 | 34,550 | ||||||||||
Total other comprehensive income | 2,527 | 105,108 | ||||||||||
Total comprehensive income | $ | 64,437 | $ | 178,337 | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||
(Unaudited) | ||||||||||
(in thousands, except share data) | ||||||||||
2017 | 2016 | |||||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 219,789 | $ | 128,347 | ||||||
Accounts receivable, net | 47,949 | 63,215 | ||||||||
Inventories | 71,439 | 66,255 | ||||||||
Prepaid expenses and other assets | 149,174 | 153,276 | ||||||||
Total current assets | 488,351 | 411,093 | ||||||||
Property and equipment, net | 10,149,166 | 10,117,689 | ||||||||
1,388,931 | 1,388,931 | |||||||||
Tradenames | 817,525 | 817,525 | ||||||||
Other long-term assets | 232,278 | 238,673 | ||||||||
Total assets | $ | 13,076,251 | $ | 12,973,911 | ||||||
Liabilities and shareholders' equity | ||||||||||
Current liabilities: | ||||||||||
Current portion of long-term debt | $ | 531,778 | $ | 560,193 | ||||||
Accounts payable | 71,123 | 38,002 | ||||||||
Accrued expenses and other liabilities | 531,375 | 541,753 | ||||||||
Advance ticket sales | 1,372,483 | 1,172,870 | ||||||||
Total current liabilities | 2,506,759 | 2,312,818 | ||||||||
Long-term debt | 5,644,175 | 5,838,494 | ||||||||
Other long-term liabilities | 300,035 | 284,873 | ||||||||
Total liabilities | 8,450,969 | 8,436,185 | ||||||||
Commitments and contingencies | ||||||||||
Shareholders' equity: | ||||||||||
Ordinary shares, |
||||||||||
and 227,904,496 shares outstanding at |
||||||||||
227,243,976 shares outstanding at |
232 | 232 | ||||||||
Additional paid-in capital | 3,911,085 | 3,890,119 | ||||||||
Accumulated other comprehensive income (loss) | (311,946 | ) | (314,473 | ) | ||||||
Retained earnings | 1,265,166 | 1,201,103 | ||||||||
(239,255 | ) | (239,255 | ) | |||||||
Total shareholders' equity | 4,625,282 | 4,537,726 | ||||||||
Total liabilities and shareholders' equity | $ | 13,076,251 | $ | 12,973,911 |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||
(Unaudited) | ||||||||||||||
(in thousands) | ||||||||||||||
Three Months Ended | ||||||||||||||
2017 | 2016 | |||||||||||||
Cash flows from operating activities | ||||||||||||||
Net income | $ | 61,910 | $ | 73,229 | ||||||||||
Adjustments to reconcile net income to | ||||||||||||||
net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization expense | 121,593 | 104,686 | ||||||||||||
Loss (gain) on derivatives | 406 | (11,948 | ) | |||||||||||
Deferred income taxes, net | 1,186 | 158 | ||||||||||||
Provision for bad debts and inventory | 323 | 575 | ||||||||||||
Share-based compensation expense | 18,203 | 15,245 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Accounts receivable, net | 14,943 | (1,042 | ) | |||||||||||
Inventories | (5,184 | ) | (4,360 | ) | ||||||||||
Prepaid expenses and other assets | (9,473 | ) | (5,390 | ) | ||||||||||
Accounts payable | 27,423 | 2,750 | ||||||||||||
Accrued expenses and other liabilities | (19,321 | ) | 7,572 | |||||||||||
Advance ticket sales | 222,935 | 148,621 | ||||||||||||
Net cash provided by operating activities | 434,944 | 330,096 | ||||||||||||
Cash flows from investing activities | ||||||||||||||
Additions to property and equipment, net | (117,777 | ) | (132,027 | ) | ||||||||||
Settlement of derivatives | - | (1,167 | ) | |||||||||||
Net cash used in investing activities | (117,777 | ) | (133,194 | ) | ||||||||||
Cash flows from financing activities | ||||||||||||||
Repayments of long-term debt | (465,237 | ) | (308,248 | ) | ||||||||||
Proceeds from long-term debt | 236,000 | 204,000 | ||||||||||||
Proceeds from employee related plans | 9,466 | 3,148 | ||||||||||||
Net share settlement of restricted share units | (4,550 | ) | - | |||||||||||
Purchases of treasury shares | - | (49,999 | ) | |||||||||||
Deferred financing fees and other | (1,404 | ) | (6,873 | ) | ||||||||||
Net cash used in financing activities | (225,725 | ) | (157,972 | ) | ||||||||||
Net increase in cash and cash equivalents | 91,442 | 38,930 | ||||||||||||
Cash and cash equivalents at beginning of the period | 128,347 | 115,937 | ||||||||||||
Cash and cash equivalents at end of the period | $ | 219,789 | $ | 154,867 |
NON-GAAP RECONCILING INFORMATION | ||||||||||||||
(Unaudited) | ||||||||||||||
The following table sets forth selected statistical information: | ||||||||||||||
Three Months Ended | ||||||||||||||
2017 | 2016 | |||||||||||||
Passengers carried | 528,354 | 551,475 | ||||||||||||
Passenger Cruise Days | 4,230,518 | 4,285,294 | ||||||||||||
Capacity Days | 4,030,616 | 3,990,942 | ||||||||||||
Occupancy Percentage | 105.0 | % | 107.4 | % | ||||||||||
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 | ||||||||||||||
2017 | ||||||||||||||
Constant | ||||||||||||||
2017 | Currency | 2016 | ||||||||||||
Passenger ticket revenue | $ | 786,694 | $ | 794,507 | $ | 740,112 | ||||||||
Onboard and other revenue | 364,087 | 364,087 | 337,520 | |||||||||||
Total revenue | 1,150,781 | 1,158,594 | 1,077,632 | |||||||||||
Less: | ||||||||||||||
Commissions, transportation | ||||||||||||||
and other expense | 194,140 | 196,518 | 175,437 | |||||||||||
Onboard and other expense | 68,411 | 68,411 | 63,965 | |||||||||||
Net Revenue | 888,230 | 893,665 | 838,230 | |||||||||||
Non-GAAP Adjustment: | ||||||||||||||
Deferred revenue (1) | - | - | 460 | |||||||||||
Adjusted Net Revenue | $ | 888,230 | $ | 893,665 | $ | 838,690 | ||||||||
Capacity Days | 4,030,616 | 4,030,616 | 3,990,942 | |||||||||||
Gross Yield | $ | 285.51 | $ | 287.45 | $ | 270.02 | ||||||||
Net Yield | $ | 220.37 | $ | 221.72 | $ | 210.03 | ||||||||
Adjusted Net Yield | $ | 220.37 | $ | 221.72 | $ | 210.15 | ||||||||
(1) Reflects deferred revenue fair value adjustments related to the Acquisition of Prestige that were made pursuant to business combination accounting rules. | ||||||||||||||
NON-GAAP RECONCILING INFORMATION | ||||||||||||||
(Unaudited) | ||||||||||||||
Gross Cruise Cost, |
||||||||||||||
Three Months Ended | ||||||||||||||
2017 | ||||||||||||||
Constant | ||||||||||||||
2017 | Currency | 2016 | ||||||||||||
Total cruise operating expense | $ | 719,798 | $ | 721,967 | $ | 664,481 | ||||||||
Marketing, general and | ||||||||||||||
administrative expense | 192,044 | 192,363 | 180,574 | |||||||||||
Gross Cruise Cost | 911,842 | 914,330 | 845,055 | |||||||||||
Less: | ||||||||||||||
Commissions, transportation | ||||||||||||||
and other expense | 194,140 | 196,518 | 175,437 | |||||||||||
Onboard and other expense | 68,411 | 68,411 | 63,965 | |||||||||||
|
649,291 | 649,401 | 605,653 | |||||||||||
Less: Fuel expense | 88,886 | 88,886 | 81,672 | |||||||||||
Net Cruise Cost Excluding Fuel | 560,405 | 560,515 | 523,981 | |||||||||||
Less Non-GAAP Adjustments: | ||||||||||||||
Non-cash deferred compensation (1) | 823 | 823 | 791 | |||||||||||
Non-cash share-based compensation (2) | 18,203 | 18,203 | 15,245 | |||||||||||
Severance payments and other fees (3) | 2,399 | 2,399 | 2,030 | |||||||||||
Acquisition of Prestige expenses (4) | 250 | 250 | 1,741 | |||||||||||
Adjusted Net Cruise Cost Excluding Fuel | $ | 538,730 | $ | 538,840 | $ | 504,174 | ||||||||
Capacity Days | 4,030,616 | 4,030,616 | 3,990,942 | |||||||||||
Gross Cruise Cost per Capacity Day | $ | 226.23 | $ | 226.85 | $ | 211.74 | ||||||||
$ | 161.09 | $ | 161.12 | $ | 151.76 | |||||||||
Net Cruise Cost Excluding Fuel per Capacity Day | $ | 139.04 | $ | 139.06 | $ | 131.29 | ||||||||
Adjusted Net Cruise Cost Excluding Fuel per Capacity Day | $ | 133.66 | $ | 133.69 | $ | 126.33 | ||||||||
(1) Non-cash deferred compensation expenses related to the crew pension plan and other crew expenses, which are included in payroll and related expense. | ||||||||||||||
(2) Non-cash share-based compensation expenses related to equity awards, which are included in marketing, general and administrative expense and payroll and related expense. | ||||||||||||||
(3) Severance payments and other expenses related to restructuring costs and other severance arrangements, which are included in marketing, general and administrative expense. | ||||||||||||||
(4) Expenses related to the Acquisition of Prestige, 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 | ||||||||
2017 | 2016 | |||||||
Net income | $ | 61,910 | $ | 73,229 | ||||
Non-GAAP Adjustments: | ||||||||
Non-cash deferred compensation (1) | 823 | 791 | ||||||
Non-cash share-based compensation (2) | 18,203 | 15,245 | ||||||
Severance payments and other fees (3) | 2,399 | 2,030 | ||||||
Acquisition of Prestige expenses (4) | 250 | 1,741 | ||||||
Deferred revenue (5) | - | 460 | ||||||
Amortization of intangible assets (6) | 7,568 | 5,268 | ||||||
Derivative adjustment (7) | - | (12,096 | ) | |||||
Adjusted Net Income | $ | 91,153 | $ | 86,668 | ||||
Diluted weighted-average shares outstanding | 228,555,952 | 228,112,035 | ||||||
Diluted earnings per share | $ | 0.27 | $ | 0.32 | ||||
Adjusted EPS | $ | 0.40 | $ | 0.38 | ||||
(1) Non-cash deferred compensation expenses related to the crew pension plan and other crew expenses, which are included in payroll and related expense. | ||||||||
(2) Non-cash share-based compensation expenses related to equity awards, which are included in marketing, general and administrative expense and payroll and related expense. | ||||||||
(3) Severance payments and other expenses related to restructuring costs and other severance arrangements, which are included in marketing, general and administrative expense. | ||||||||
(4) Expenses related to the Acquisition of Prestige, which are included in marketing, general and administrative expense. | ||||||||
(5) 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 passenger ticket revenue. | ||||||||
(6) Amortization of intangible assets related to the Acquisition of Prestige, which are included in depreciation and amortization expense. | ||||||||
(7) A gain of approximately |
||||||||
NON-GAAP RECONCILING INFORMATION | ||||||||
(Unaudited) | ||||||||
EBITDA and Adjusted EBITDA were calculated as follows (in thousands): | ||||||||
Three Months Ended | ||||||||
2017 | 2016 | |||||||
Net income | $ | 61,910 | $ | 73,229 | ||||
Interest expense, net | 52,960 | 59,754 | ||||||
Income tax expense | 2,049 | 1,104 | ||||||
Depreciation and amortization expense | 119,205 | 101,295 | ||||||
EBITDA | 236,124 | 235,382 | ||||||
Other (income) expense, net (1) | 2,815 | (2,805 | ) | |||||
Non-GAAP Adjustments: | ||||||||
Non-cash deferred compensation (2) | 823 | 791 | ||||||
Non-cash share-based compensation (3) | 18,203 | 15,245 | ||||||
Severance payments and other fees (4) | 2,399 | 2,030 | ||||||
Acquisition of Prestige expenses (5) | 250 | 1,741 | ||||||
Deferred revenue (6) | - | 460 | ||||||
Adjusted EBITDA | $ | 260,614 | $ | 252,844 | ||||
(1) Primarily consists of gains and losses, net for derivative contracts and forward 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) 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) 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 passenger ticket revenue. | ||||||||
Investor Relations ContactAndrea DeMarco (305) 468-2339 InvestorRelations@nclcorp.com Media ContactsVanessa Picariello (305) 436-4713 PublicRelations@ncl.com
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