Form 8-K Filing

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 8-K 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): February 21, 2019  

NORWEGIAN CRUISE LINE HOLDINGS LTD.

(Exact Name of Registrant as Specified in Charter)

Bermuda
(State of Incorporation)

001-35784
(Commission File Number)

98-0691007
(I.R.S. Employer Identification Number)

 

7665 Corporate Center Drive
Miami, Florida
33126
(Address of Principal Executive Offices)(Zip Code)

(305) 436-4000
(Registrant's telephone number, including area code)



(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 [ ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 [ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 [ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 [ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [  ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]


Item 2.02. Results of Operations and Financial Condition.

On February 21, 2019, Norwegian Cruise Line Holdings Ltd. issued a press release regarding its financial results for the quarter and full year ended December 31, 2018. A copy of the press release is furnished as Exhibit 99.1 to this report.

The information furnished with this report, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit
Number
 Description
   
99.1 Press release, dated February 21, 2019.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 21, 2019NORWEGIAN CRUISE LINE HOLDINGS LTD.
  
  By:  /s/ MARK A. KEMPA
  Mark A. Kempa
Executive Vice President and Chief Financial Officer
  

EdgarFiling

EXHIBIT 99.1

Norwegian Cruise Line Holdings Reports Fourth Quarter and Full Year 2018 Financial Results

Strong Global Demand Drives Record Revenue and Earnings for Fourth Quarter and Full Year 2018

EPS Growth of 28% - Fifth Consecutive Year of Double-digit EPS Growth

Company Enters 2019 in Record Booked Position at Higher Pricing

Growth Profile Enhanced with 11 Ships on Order Across Three Award-Winning Brands

MIAMI, Feb. 21, 2019 (GLOBE NEWSWIRE) -- Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) (together with NCL Corporation Ltd., “Norwegian Cruise Line Holdings”, “Norwegian” or the “Company”) today reported financial results for the fourth quarter and full year ended December 31, 2018, as well as provided guidance for the first quarter and full year 2019.

Full Year 2018 Highlights

Full Year 2019 Highlights

“The team at Norwegian Cruise Line Holdings delivered a breakout year in 2018, once again generating industry-leading record financial performance.  Strong global demand for our portfolio of brands, the successful, record-breaking introduction of Norwegian Bliss and the flawless execution of our demand creation strategies drove our fifth consecutive year of double-digit earnings per share growth," said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings Ltd.  “Building on this momentum, we entered 2019 in the best booked position in our Company’s history, with pricing above prior year’s record levels.  The strong start to this year’s WAVE season, coupled with our moderate in-year capacity growth and our solid booked position across our three brands, has us well-positioned to continue driving price throughout the year and into 2020, where we will also benefit from the first full year of sailings from Norwegian Encore and the addition of Regent’s Seven Seas Splendor.”

Full Year 2018 Results

GAAP net income was $954.8 million or EPS of $4.25 compared to $759.9 million or $3.31 in the prior year.  The Company generated Adjusted Net Income of $1.1 billion or Adjusted EPS of $4.92 compared to $907.7 million or $3.96 in the prior year.  Strong growth in 2018 including an increase in GAAP EPS of 28.4% and Adjusted EPS of 24.2% follows strong 2017 growth of 19.1% and 16.1%, respectively, further demonstrating the Company’s continued underlying earnings power.

Revenue increased 12.2% to $6.1 billion compared to $5.4 billion in 2017. This increase was primarily attributed to an 8.5% increase in Capacity Days due to the delivery of Norwegian Bliss in April 2018 and Norwegian Joy in April 2017, as well as strong organic pricing growth across all core markets.  Gross Yield increased 3.4%. Net Yield increased 3.5% on a Constant Currency basis and 3.7% on an as reported basis.

Cruise operating expense increased 10.2% in 2018 compared to 2017, primarily due to an increase in Capacity Days.  Gross Cruise Costs per Capacity Day increased 2.7%.  Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased 2.6% on a Constant Currency basis and 2.9% on an as reported basis.

Fuel price per metric ton, net of hedges increased to $483 from $465 in 2017.  The Company reported fuel expense of $392.7 million in the period. 

Interest expense, net was $270.4 million in 2018 compared to $267.8 million in 2017. The increase in interest expense primarily reflects additional debt incurred in connection with the delivery of Norwegian Bliss and Norwegian Joy in the second quarter of 2018 and 2017, respectively, Project Leonardo financing costs, and higher interest rates due to LIBOR rate increases. The increase in interest expense was partially offset by the benefit from the October 2017 full redemption of our 4.625% Senior Notes due 2020 and the benefit from the partial redemption totaling $135 million of our 4.75% Senior Notes due 2021 in April. This year’s results included a non-recurring $6.3 million redemption premium and write-off of fees in connection with the partial redemption. 2017 included losses on extinguishment of debt and debt modification costs of $23.9 million.

Other income (expense), net was income of $20.7 million in 2018 compared to expense of $10.4 million in 2017. Other income in 2018 was primarily due to gains on foreign currency exchange.  Other expense in 2017 was primarily due to losses on foreign currency exchange.

Fourth Quarter 2018 Results

GAAP net income was $154.6 million or EPS of $0.70 compared to $98.8 million or $0.43 in the prior year.  The Company generated Adjusted Net Income of $188.8 million or Adjusted EPS of $0.85 compared to $156.8 million or $0.68 in the prior year.

Revenue increased 10.5% to $1.4 billion compared to $1.2 billion in 2017.  These increases were primarily attributed to the addition of Norwegian Bliss to the fleet, along with strong organic ticket pricing growth across all core markets and robust onboard spending.  Gross Yield increased 3.0%. Net Yield increased 4.7% on a Constant Currency basis and 4.2% on an as reported basis.

Total cruise operating expense increased 8.5% in 2018 compared to 2017, primarily due to an increase in Capacity Days.  Gross Cruise Costs per Capacity Day increased 1.8%.  Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased 3.6% on a Constant Currency basis and 3.4% on an as reported basis.

Fuel price per metric ton, net of hedges increased to $496 from $460 in 2017.  The Company reported fuel expense of $104.4 million in the period. 

Interest expense, net decreased to $68.2 million in 2018 from $84.3 million in 2017. In connection with the redemption of senior notes and refinancing of certain of our credit facilities, interest expense, net included losses on extinguishment of debt and debt modification costs of $23.9 million in 2017.

2019 Outlook

“2018 marked a key inflection point for the Company as we have made significant progress towards achieving our Full Speed Ahead 2020 Targets.  Our cash generation continues to accelerate and we remain keenly focused on returning meaningful capital to our shareholders, already returning approximately one-third of our three-year targeted capital distribution,” said Mark Kempa, executive vice president and chief financial officer of Norwegian Cruise Line Holdings Ltd.  “We are confident in our outlook for 2019 and beyond, and have built upon our foundation for measured capacity growth by enhancing our growth profile through 2027, with announced orders for all three of our award-winning brands, now totaling eleven vessels, enabling us to expand our presence both globally and domestically and further diversify our product offerings to continue driving outsized shareholder returns.”

2019 Guidance and Sensitivities

In addition to announcing the results for the fourth quarter and full year 2018, the Company also provided guidance for the first quarter and full year 2019, 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 2019 guidance and the most directly comparable GAAP measures because it would be too difficult to prepare a reliable U.S. GAAP quantitative reconciliation without unreasonable effort.

        
 First Quarter 2019 Full Year 2019
 As Reported Constant
Currency
 As Reported Constant
Currency
Net YieldApprox. 2.0% Approx. 2.5% 2.5% to 3.5% 3.0% to 4.0%
Adjusted Net Cruise Cost Excluding Fuel per Capacity DayApprox. 2.0% Approx. 2.5% Approx. 2.75% Approx. 3.25%
Adjusted EPSApprox. $0.70 $5.20 to $5.30
Adjusted Depreciation and Amortization (1)Approx. $145 million Approx. $595 million (2)
Interest Expense, netApprox. $68 million Approx. $265 million
Effect on EPS of a 1% change in Adjusted Net Yield (3)$0.05 $0.23
Effect on Adjusted EPS of a 1% change in Adjusted Net Cruise Cost Excluding Fuel per Capacity Day (3)$0.03 $0.12
    

(1)  Excludes $4.6 million and $18.4 million of amortization of intangible assets related to the Acquisition of Prestige in the first quarter and full year 2019, respectively.
(2)  Excludes a one-time, non-cash write-off in depreciation and amortization of approximately $25 million for enhancements to Norwegian Joy associated with her redeployment to North America.
(3)  Based on midpoint of guidance.

The following reflects the Company’s expectations regarding fuel consumption and pricing, along with accompanying sensitivities.

    
 First Quarter 2019 Full Year 2019
Fuel consumption in metric tons215,000 860,000
Fuel price per metric ton, net of hedges$456 $465
Effect on Adjusted EPS of a 10% change in fuel prices, net of hedges$0.03 $0.09
    

As of December 31, 2018, the Company had hedged approximately 57%, 53%, and 33% of its total projected metric tons of fuel consumption for the full year 2019, 2020, and 2021, respectively.  The following table provides amounts hedged and price per barrel of heavy fuel oil (“HFO”) which is hedged utilizing U.S. Gulf Coast 3% (“USGC”) and marine gas oil (“MGO”) which is hedged utilizing Brent in 2019 and Gasoil in 2019, 2020 and 2021.          

      
 2019 2020 2021
% of HFO Consumption Hedged63% 58% 25%
Average USGC Price / Barrel$47.82 $41.14 $44.84
% of MGO Consumption Hedged43% 50% 38%
Average Gasoil Price / Barrel$90.14 $88.57 (1) $81.56
Average Brent Price / Barrel$49.25 - -
      

(1)  Represents a blended rate that includes a $7.4 million benefit from 2020 Brent hedges that were replaced with Gasoil hedges in the third quarter of 2018.

The following reflects the foreign currency exchange rates the Company used in its first quarter and full year 2019 guidance. 

   
 Current Guidance - FebruaryPrior Guidance – November
Euro$1.14$1.16
British pound$1.30$1.30
Australian Dollar$0.73$0.72
Canadian Dollar$0.76$0.77
   

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 December 31, 2018, anticipated capital expenditures were $1.6 billion, $1.2 billion and $0.7 billion for the years ending December 31, 2019, 2020 and 2021, respectively. We have export credit financing in place for the anticipated expenditures related to ship construction contracts of $0.6 billion, $0.5 billion and $0.2 billion for the years ended December 31, 2019, 2020 and 2021, respectively.

Company Updates and Other Business Highlights

Oceania Cruises Announces Order for Two Allura Class Ships

The Company announced an order for the next generation of ships for Oceania Cruises.  The two Allura Class Ships mark the next phase of the line's OceaniaNEXT initiative and will be designed and built by Fincantieri S.p.A. for delivery in 2022 and 2025.  The two 67,000 gross ton Allura Class ships will each accommodate approximately 1,200 guests. This new class of mid-size cruise vessels will retain all the warmth, popular design elements, and signature amenities of the line’s award-winning Marina and Riviera while affording guests an elevated level of comfort and convenience with the addition of new luxury offerings.  The contract price for each of the two vessels is approximately €575 million per ship.  The Company has obtained export credit financing with favorable terms to fund 80 percent of the contract price of each ship, subject to certain Italian government approvals.

Regent Seven Seas Cruises Announces Order for Third Explorer Class Ship 

The Company announced an order for a new Explorer Class Ship for Regent Seven Seas Cruises, which will be a sister ship to Seven Seas Explorer®, the most luxurious ship ever built, and Seven Seas SplendorTM, the ship that perfects luxury. The ship will be designed and built by Fincantieri S.p.A. for delivery in late 2023.  Building on the success of its predecessors, Regent Seven Seas Cruises’ newest addition will continue to set the standard for defining elegance at sea. Accommodating up to 750 guests, the intimate and spacious new ship will be the brand’s sixth-all-suite vessel. Voyages for the ship’s inaugural season will go on sale in 2021. The contract price for the vessel is approximately €475 million.  The Company has obtained export credit financing with favorable terms to fund 80 percent of the contract price of the ship, subject to certain Italian government approvals.

Sponsors Exit from Long-Term Investment in Company

In connection with the closing of the secondary public offering by certain funds affiliated with Apollo Global Management, LLC (“Apollo”) and Star NCLC Holdings Ltd. (together, the “Sponsors”) in December, the  Company announced the Sponsor’s exit from their long-term investment in Norwegian Cruise Line Holdings Ltd.  The Company repurchased approximately $85 million of ordinary shares of Norwegian from the underwriter in connection with the offering under its existing $1.0 billion share repurchase program, of which approximately $600 million remains available for future share repurchases.

Refinancing of Senior Secured Credit Facility

In January 2019, the Company announced the refinancing of its senior secured credit facility to strengthen its liquidity profile. The Company amended its existing senior secured credit facility by repricing its $875 million revolving credit facility ("Revolver"), repricing and increasing its Term A loan facility to approximately $1.6 billion ("Term A Loan") and extending the maturity dates for both to January 2024. The proceeds from the increase in the Term A Loan were used to prepay the entire outstanding amount under the Company's then existing Term B loan facility.  The amendment also reduced the applicable margin under the Revolver and Term A Loan by 25 basis points.

Company Partners with Huna Totem Corporation to Construct New Pier at Icy Strait Point in Alaska

The Company announced a partnership with Alaska Native-owned Huna Totem Corporation to develop a second cruise pier in Icy Strait Point, Huna Totem’s world-class cruise ship destination in Hoonah, Alaska. The pier is scheduled to be completed for the summer 2020 Alaska cruise season and will be built to accommodate Norwegian Cruise Line’s Breakaway Plus Class ships. The partnership will provide Norwegian Cruise Line Holdings’ brands with preferential berthing rights in the popular port destination and allow the Company to increase its calls to Icy Strait Point.  In addition, the new pier will provide more cruise passengers with access to Icy Strait’s newly upgraded retail, restaurant and shore excursion amenities.

Norwegian Encore Entertainment and Recreation Line-Up Revealed at Keel Laying Ceremony

Norwegian Cruise Line held an unforgettable keel laying ceremony for Norwegian Encore, unveiling the award-winning entertainment line-up and leading recreational amenities scheduled for the ship’s fall 2019 debut, which include the Tony Award®-Winning Broadway musical “Kinky Boots” as well as an enhanced two-level 1,150 foot race track with ten exhilarating turns, the largest open-air laser tag arena in the fleet and the Galaxy Pavilion, a 10,000-square-foot virtual reality complex. Following the major construction milestone and maritime tradition of embedding a “commemorative coin” within the keel blocks of the ship, attendees were treated to a surprise performance from “Kinky Boots”.  At approximately 168,000 gross tons and accommodating up to 4,000 guests, Norwegian Encore will cruise out of Miami every Sunday and sail seven-day voyages to the Eastern Caribbean, beginning with her first journey in November 2019.

Second School Built with Proceeds from Hope Starts Here Hurricane Relief Campaign

The Company announced the re-opening of the Morne Prosper Pre and Primary Schools in Morne Prosper Village, Dominica, the second school to benefit from the Company’s Hope Starts Here hurricane relief campaign.  Together with All Hands and Hearts, the Company raised over $2.5 million dollars to deliver early relief response and rebuild safe, resilient schools in the Caribbean communities impacted by Hurricanes Irma and Maria.  A portion of the proceeds were used to rebuild the pre and primary schools in Morne Prosper Village, which suffered extensive damage from Hurricane Maria. On January 10, officials from Norwegian Cruise Line Holdings and All Hands and Hearts along with local representatives from Dominica attended the grand opening celebration of the pre-Kindergarten through sixth grade school, which opened its doors to teachers and students on January 14.

Conference Call

The Company has scheduled a conference call for Thursday, February 21, 2019 at 10:00 a.m. Eastern Time to discuss fourth quarter and full year 2018 results.  A link to the live webcast along with a slide presentation can be found on the Company’s Investor Relations website at www.nclhltdinvestor.com.  A replay of the conference call will also be available on the website for 30 days after the call.

About Norwegian Cruise Line Holdings Ltd.

Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) is a leading global cruise company which operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands.  With a combined fleet of 26 ships with approximately 54,400 berths, these brands offer itineraries to more than 450 destinations worldwide. The Company will introduce eleven additional ships through 2027.

Terminology

Acquisition of Prestige. In November 2014, we acquired Prestige in a cash and stock transaction for total consideration of $3.025 billion, including the assumption of debt.

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 EBITDA Margin.  EBITDA adjusted for other income (expense), net and other supplemental adjustments, divided by total revenue.

Adjusted EPS. Adjusted Net Income divided by the number of diluted weighted-average shares outstanding.

Adjusted Interest Expense.  Interest expense adjusted to exclude write-offs of deferred financing fees related to the refinancing of certain of our credit facilities.

Adjusted Net Cruise Cost Excluding Fuel. Net Cruise Cost less fuel expense adjusted for supplemental adjustments.

Adjusted Net Income.   Net income adjusted for supplemental adjustments.

Adjusted ROIC.  Adjusted EBITDA less Adjusted Depreciation and Amortization divided by debt and shareholders’ equity, averaged for four quarters.

Allura Class Ships.  Oceania Cruises’ two ships on order.

Berths.  Double occupancy capacity per cabin (single occupancy per studio cabin) even though many cabins can accommodate three or more passengers.

Breakaway Plus Class. Norwegian Escape, Norwegian Joy, Norwegian Bliss and Norwegian Encore.

Capacity Days.  Available Berths multiplied by the number of cruise days for the period.

Constant Currency. A calculation whereby foreign currency-denominated revenues and expenses in a period are converted at the U.S. dollar exchange rate of a comparable period in order to eliminate the effects of foreign exchange fluctuations.

Dry-dock. A process whereby a ship is positioned in a large basin where all of the fresh/sea water is pumped out in order to carry out cleaning and repairs of those parts of a ship which are below the water line.

EBITDA.  Earnings before interest, taxes, and depreciation and amortization.

EPS. Diluted earnings per share.

Explorer Class Ships. Regent’s Seven Seas Explorer, Seven Seas Splendor, and an additional ship on order.

Full Speed Ahead 2020 Targets. The Full Speed Ahead 2020 Targets refer to long-term financial targets announced at the Company’s 2018 Investor Day.  These targets are (i) double-digit three-year Adjusted EPS CAGR (2018 to 2020), Adjusted ROIC of approximately 12% in 2020, Net Leverage of approximately 2.5x to 2.75x by 2020 and approximately $1.0 to $1.5 billion of cash available for potential shareholders returns from 2018 to 2020. The Company does not provide targets 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 targets and the most directly comparable GAAP measures because it would be too difficult to prepare a reliable U.S. GAAP quantitative reconciliation without unreasonable effort. Any determination to pay dividends or repurchase shares in the future will be entirely at the discretion of the Board of Directors or management, respectively, and will depend upon our results of operations, cash requirements, financial condition, business operations, contractual restrictions, restrictions imposed by applicable law and other factors that the Board of Directors or management deems relevant.

GAAP. Generally accepted accounting principles in the U.S.

Gross Cruise Cost.  The sum of total cruise operating expense and marketing, general and administrative expense.

Gross Yield.  Total revenue per Capacity Day.

Net Cruise Cost.  Gross Cruise Cost less commissions, transportation and other expense and onboard and other expense.

Net Cruise Cost Excluding Fuel.  Net Cruise Cost less fuel expense.

Net Leverage. Long-term debt, including current portion, less cash and cash equivalents divided by Adjusted EBITDA. 

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.

Secondary Equity Offering(s). Secondary public offering(s) of NCLH’s ordinary shares in December 2018, March 2018, November 2017, August 2017, December 2015, August 2015, May 2015, March 2015, March 2014, December 2013 and August 2013.

Shipboard Retirement Plan. An unfunded defined benefit pension plan for certain crew members which computes benefits based on years of service, subject to certain requirements.

Non-GAAP Financial Measures

We use certain non-GAAP financial measures, such as Net Revenue, Net Yield, Net Cruise Cost, Adjusted Net Cruise Cost Excluding Fuel, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted ROIC, Net Leverage, Adjusted Net Income and Adjusted EPS, to enable us to analyze our performance. See “Terminology” for the definitions of these non-GAAP financial measures. We utilize Net Revenue and Net Yield to manage our business on a day-to-day basis and believe that they are the most relevant measures of our revenue performance because they reflect the revenue earned by us net of significant variable costs. In measuring our ability to control costs in a manner that positively impacts net income, we believe changes in Net Cruise Cost and Adjusted Net Cruise Cost Excluding Fuel to be the most relevant indicators of our performance.

As our business includes the sourcing of passengers and deployment of vessels outside of the U.S., a portion of our revenue and expenses are denominated in foreign currencies, particularly British pound, Canadian dollar, euro and Australian dollar, which are subject to fluctuations in currency exchange rates versus our reporting currency, the U.S. dollar. In order to monitor results excluding these fluctuations, we calculate certain non-GAAP measures on a Constant Currency basis whereby current period revenue and expenses denominated in foreign currencies are converted to U.S. dollars using currency exchange rates of the comparable period. We believe that presenting these non-GAAP measures on both a reported and Constant Currency basis is useful in providing a more comprehensive view of trends in our business.

We believe that Adjusted EBITDA and Adjusted EBITDA Margin are appropriate as supplemental financial measures as they are used by management to assess operating performance. We also believe that Adjusted EBITDA is a useful measure in determining our performance as it reflects certain operating drivers of our business, such as sales growth, operating costs, marketing, general and administrative expense and other operating income and expense and Adjusted EBITDA Margin is useful for period-over-period comparisons. Adjusted EBITDA and Adjusted EBITDA Margin are not defined terms under GAAP nor are they intended to be measures of liquidity or cash flows from operations or measures comparable to net income, as they do not take into account certain requirements such as capital expenditures and related depreciation, principal and interest payments and tax payments and they include other supplemental adjustments.

Net Leverage is a performance measure that we believe provides management and investors a more complete understanding of our leverage position and borrowing capacity after factoring in cash and cash equivalents.  Adjusted Net Income and Adjusted EPS are non-GAAP financial measures that exclude certain amounts and are used to supplement GAAP net income and EPS. We use Adjusted Net Income and Adjusted EPS as key performance measures of our earnings performance. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparison to our historical performance. Our management believes the presentation of Adjusted ROIC provides a useful performance metric to both management and investors for evaluating our effective use of capital. In addition, management uses Adjusted EPS and Adjusted ROIC as performance measures for our incentive compensation. The amounts excluded in the presentation of these non-GAAP financial measures may vary from period to period; accordingly, our presentation of Adjusted Net Income and Adjusted EPS, Adjusted EBITDA Margin, Adjusted ROIC and Net Leverage may not be indicative of future adjustments or results. For example, for the year ended December 31, 2017, we incurred an impairment of $2.9 million related to assets held for sale. A similar impairment was not incurred in the years ended December 31, 2018 or December 31, 2016. We included this as an adjustment in the reconciliation of Adjusted Net Income since this impairment amount was not representative of our day-to-day operations and we have included similar non-representative adjustments in prior periods.

You are encouraged to evaluate each adjustment used in calculating our non-GAAP financial measures and the reasons we consider our non-GAAP financial measures appropriate for supplemental analysis. In evaluating our non-GAAP financial measures, you should be aware that in the future we may incur expenses similar to the adjustments in our presentation. Our non-GAAP financial measures have limitations as analytical tools, and you should not consider these measures in isolation or as a substitute for analysis of our results as reported under GAAP. Our presentation of our non-GAAP financial measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our non-GAAP financial measures may not be comparable to other companies. Please see a historical reconciliation of these measures to the most comparable GAAP measure presented in our consolidated financial statements below.

Cautionary Statement Concerning Forward-Looking Statements
Certain statements in this release or that may be mentioned on our conference call constitute forward-looking statements within the meaning of the U.S. federal securities laws intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this release or that may be mentioned on our conference call, including, without limitation, those regarding our business strategy, financial position and results of operations, including our 2019 guidance and Full Speed Ahead 2020 Targets, plans, potential share repurchases or dividends, future deleveraging, prospects and objectives of management for future operations (including expected fleet additions, development plans, demand environment, objectives relating to our activities and expected performance in new markets), are forward-looking statements. Many, but not all, of these statements can be found by looking for words like "expect," "anticipate," "goal," "project," "plan," "believe," "seek," "will," "may," "forecast," "estimate," "intend," "future," and similar words. Forward-looking statements do not guarantee future performance and may involve risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in those forward-looking statements. Examples of these risks, uncertainties and other factors include, but are not limited to the impact of: adverse events impacting the security of travel, such as terrorist acts, armed conflict and threats thereof, acts of piracy, and other international events; adverse incidents involving cruise ships; adverse general economic and related factors, such as fluctuating or increasing levels of unemployment, underemployment and the volatility of fuel prices, declines in the securities and real estate markets, and perceptions of these conditions that decrease the level of disposable income of consumers or consumer confidence; the spread of epidemics and viral outbreaks; breaches in data security or other disturbances to our information technology and other networks; the risks and increased costs associated with operating internationally; changes in fuel prices and/or other cruise operating costs; fluctuations in foreign currency exchange rates; our expansion into and investments in new markets;  overcapacity in key markets or globally; the unavailability of attractive port destinations; our inability to obtain adequate insurance coverage; evolving requirements and regulations regarding data privacy and protection and any actual or perceived compliance failures by us; our indebtedness and restrictions in the agreements governing our indebtedness that limit our flexibility in operating our business, including the significant portion of assets that are collateral under these agreements; volatility and disruptions in the global credit and financial markets, which may adversely affect our ability to borrow and could increase our counterparty credit risks, including those under our credit facilities, derivatives, contingent obligations, insurance contracts and new ship progress payment guarantees; our inability to recruit or retain qualified personnel or the loss of key personnel; delays in our shipbuilding program and ship repairs, maintenance and refurbishments; our reliance on third parties to provide hotel management services to certain ships and certain other services; future increases in the price of, or major changes or reduction in, commercial airline services; amendments to our collective bargaining agreements for crew members and other employee relation issues;  pending or threatened litigation, investigations and enforcement actions; our ability to keep pace with developments in technology; seasonal variations in passenger fare rates and occupancy levels at different times of the year; changes involving the tax and environmental regulatory regimes in which we operate; and other factors set forth under "Risk Factors" in our most recently filed Annual Report on Form 10-K, Quarterly Report on Form 10-Q and subsequent filings by the Company with the Securities and Exchange Commission. The above examples are not exhaustive and new risks emerge from time to time. Such forward-looking statements are based on our current beliefs, assumptions, expectations, estimates and projections regarding our present and future business strategies and the environment in which we expect to operate in the future. These forward-looking statements speak only as of the date made. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein or that may be mentioned on our conference call to reflect any change in our expectations with regard thereto or any change of events, conditions or circumstances on which any such statement was based, except as required by law.

Investor Relations & Media Contacts
Andrea DeMarco
(305) 468-2339
InvestorRelations@nclcorp.com

Jordan Kever
(305) 436-4961


               
NORWEGIAN CRUISE LINE HOLDINGS LTD. 
CONSOLIDATED STATEMENTS OF OPERATIONS 
(Unaudited) 
(in thousands, except share and per share data) 
               
       Three Months Ended Year Ended 
       December 31, December 31, 
       2018 2017 2018 2017 
               
Revenue         
 Passenger ticket $  958,443 $  833,299 $  4,259,815 $  3,750,030 
 Onboard and other   422,750   416,254   1,795,311   1,646,145 
    Total revenue  1,381,193   1,249,553   6,055,126   5,396,175 
Cruise operating expense        
 Commissions, transportation and other  229,384   210,778   998,948   894,406 
 Onboard and other  67,424   69,039   348,656   319,293 
 Payroll and related  224,738   210,130   881,606   803,632 
 Fuel     104,399   94,252   392,685   361,032 
 Food     55,246   50,956   216,031   198,357 
 Other    136,067   118,284   539,150   486,924 
    Total cruise operating expense  817,258   753,439   3,377,076   3,063,644 
Other operating expense        
 Marketing, general and administrative208,943 185,841 897,929 773,755 
 Depreciation and amortization 145,412 133,079 561,060 509,957 
    Total other operating expense  354,355   318,920   1,458,989   1,283,712 
     Operating income 209,580 177,194 1,219,061 1,048,819 
Non-operating income (expense)        
 Interest expense, net(68,178) (84,309) (270,404) (267,804) 
 Other income (expense), net9,299 1,285 20,653 (10,401) 
    Total non-operating income (expense)(58,879) (83,024) (249,751) (278,205) 
Net income before income taxes150,701 94,170 969,310 770,614 
Income tax expense3,933 4,627 (14,467) (10,742) 
Net income $  154,634 $  98,797 $  954,843 $  759,872 
               
Weighted-average shares outstanding      
 Basic    219,941,120   228,482,697   223,001,739   228,040,825 
 Diluted    221,443,295   230,196,680   224,419,205   229,418,326 
               
Earnings per share        
 Basic  $  0.70 $  0.43 $  4.28 $  3.33 
 Diluted  $  0.70 $  0.43 $  4.25 $  3.31 
               

 

             
NORWEGIAN CRUISE LINE HOLDINGS LTD. 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  
(Unaudited) 
(in thousands) 
             
    Three Months Ended  Year Ended 
    December 31,  December 31, 
    2018 2017  2018 2017 
             
 Net income $  154,634 $  98,797  $  954,843 $  759,872 
 Other comprehensive income (loss):          
  Shipboard Retirement Plan   2,378   (353)    2,697   (40) 
  Cash flow hedges:          
  Net unrealized gain (loss) related to cash flow hedges   (209,261)   83,172    (161,214)   304,684 
  Amount realized and reclassified into earnings   (10,882)   5,202    (30,096)   36,795 
  Total other comprehensive income (loss)   (217,765)   88,021    (188,613)   341,439 
 Total comprehensive income  $  (63,131) $  186,818  $  766,230 $  1,101,311 
             

 

        
NORWEGIAN CRUISE LINE HOLDINGS LTD. 
CONSOLIDATED BALANCE SHEETS 
(Unaudited) 
(in thousands, except share data)  
   December 31,  December 31, 
   2018  2017 
 Assets       
 Current assets:       
 Cash and cash equivalents $  163,851  $  176,190 
 Accounts receivable, net  55,249  43,961 
 Inventories  90,202  82,121 
 Prepaid expenses and other assets  241,011  216,065 
 Total current assets  550,313  518,337 
 Property and equipment, net  12,119,253  11,040,488 
 Goodwill 1,388,931  1,388,931 
 Tradenames 817,525  817,525 
 Other long-term assets 329,948  329,588 
 Total assets  $  15,205,970  $  14,094,869 
 Liabilities and shareholders' equity       
 Current liabilities:       
 Current portion of long-term debt  $  681,218  $  619,373 
 Accounts payable  159,564  53,433 
 Accrued expenses and other liabilities  716,499  513,717 
 Advance ticket sales  1,593,219  1,303,498 
 Total current liabilities  3,150,500  2,490,021 
 Long-term debt  5,810,873  5,688,392 
 Other long-term liabilities  281,596  166,690 
 Total liabilities  9,242,969  8,345,103 
 Commitments and contingencies       
 Shareholders' equity:       
 Ordinary shares, $.001 par value; 490,000,000 shares authorized; 235,484,613 shares issued      
 and 217,650,644 shares outstanding at December 31, 2018 and 233,840,523 shares issued and      
 228,528,562 shares outstanding at December 31, 2017 235  233 
 Additional paid-in capital 4,129,639  3,998,694 
 Accumulated other comprehensive income (161,647)  26,966 
 Retained earnings 2,898,840  1,963,128 
 Treasury shares (17,833,969 and 5,311,961 ordinary shares at December 31, 2018 and December 31, 2017,    
 respectively, at cost) (904,066)  (239,255) 
 Total shareholders' equity 5,963,001  5,749,766 
 Total liabilities and shareholders' equity $  15,205,970  $  14,094,869 
        

 

           
NORWEGIAN CRUISE LINE HOLDINGS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
           
        Year Ended
        December 31,
        2018 2017
Cash flows from operating activities    
Net income  $  954,843 $  759,872
Adjustments to reconcile net income to    
 net cash provided by operating activities:    
  Depreciation and amortization expense 566,972 521,484
  Gain on derivatives - (103)
  Deferred income taxes, net 1,508 9,153
  Loss on extinguishment of debt 6,346 22,211
  Provision for bad debts and inventory 5,570 2,431
  Share-based compensation expense 115,983 87,039
  Net foreign currency adjustments (5,537) -
Changes in operating assets and liabilities:    
  Accounts receivable, net (15,886) 15,050
  Inventories (9,052) (17,129)
  Prepaid expenses and other assets (29,519) (22,714)
  Accounts payable 106,387 14,047
  Accrued expenses and other liabilities 114,953 55,894
  Advance ticket sales 262,603 154,012
     Net cash provided by operating activities 2,075,171 1,601,247
Cash flows from investing activities    
Additions to property and equipment, net (1,566,796) (1,372,214)
Net proceeds from sale of Hawaii land-based operations - 499
Promissory note receipts 1,011 165
Cash received on settlement of derivatives 64,796 2,346
Cash paid on settlement of derivatives (1,719) (35,694)
     Net cash used in investing activities (1,502,708) (1,404,898)
Cash flows from financing activities    
Repayments of long-term debt (1,716,244) (1,916,885)
Proceeds from long-term debt 1,904,865 1,816,390
Proceeds from employee related plans 28,819 30,032
Net share settlement of restricted share units (13,855) (6,342)
Purchase of treasury shares (664,811) -
Early redemption premium (5,154) (15,506)
Deferred financing fees and other (118,422) (56,195)
      Net cash used in financing activities (584,802) (148,506)
     Net increase (decrease) in cash and cash equivalents (12,339) 47,843
Cash and cash equivalents at beginning of the period 176,190 128,347
Cash and cash equivalents at end of the period $  163,851 $  176,190
           

 

              
NORWEGIAN CRUISE LINE HOLDINGS LTD. 
NON-GAAP RECONCILING INFORMATION 
(Unaudited) 
              
 The following table sets forth selected statistical information:            
              
    Three Months Ended Year Ended   
    December 31, December 31,   
    2018 2017 2018 2017   
              
 Passengers carried  666,428 650,812 2,795,101 2,519,324   
 Passenger Cruise Days  5,098,586 4,703,609 20,276,568 18,523,030   
 Capacity Days   4,883,347 4,552,267 18,841,678 17,363,422   
 Occupancy Percentage  104.4% 103.3% 107.6% 106.7%   
              
              
 Net Revenue, Gross Yield and Net Yield were calculated as follows (in thousands, except Capacity Days and Yield data):  
   
  Three Months Ended Year Ended 
  December 31, December 31, 
    2018     2018   
    Constant     Constant   
  2018 Currency 2017 2018 Currency 2017 
              
 Passenger ticket revenue$  958,443 $  963,914 $  833,299 $  4,259,815 $  4,244,494 $  3,750,030 
 Onboard and other revenue422,750 422,750 416,254 1,795,311 1,795,311 1,646,145 
 Total revenue1,381,193   1,386,664 1,249,553 6,055,126   6,039,805   5,396,175 
 Less:            
 Commissions, transportation            
  and other expense 229,384 230,496 210,778 998,948 995,097 894,406 
 Onboard and other expense67,424 67,424 69,039 348,656 348,656 319,293 
 Net Revenue1,084,385 1,088,744 969,736 4,707,522 4,696,052 4,182,476 
              
 Capacity Days 4,883,347 4,883,347 4,552,267 18,841,678 18,841,678 17,363,422 
              
 Gross Yield$  282.84 $  283.96 $  274.49 $  321.37 $  320.56 $  310.78 
 Net Yield$  222.06 $  222.95 $  213.02 $  249.85 $  249.24 $  240.88 
              
NORWEGIAN CRUISE LINE HOLDINGS LTD. 
 NON-GAAP RECONCILING INFORMATION 
(Unaudited) 
 Gross Cruise Cost, Net Cruise Cost, Net Cruise Cost Excluding Fuel and Adjusted Net Cruise Cost Excluding Fuel were calculated as follows (in thousands, except Capacity Days and per Capacity Day data):  
   
   
              
  Three Months Ended Year Ended 
  December 31, December 31, 
    2018     2018   
    Constant     Constant   
  2018 Currency 2017 2018 Currency 2017 
 Total cruise operating expense$  817,258 $  818,153 $  753,439 $  3,377,076 $  3,365,030 $  3,063,644 
 Marketing, general and             
 administrative expense208,943 210,708 185,841 897,929 897,438 773,755 
 Gross Cruise Cost  1,026,201   1,028,861   939,280   4,275,005   4,262,468   3,837,399 
 Less:            
 Commissions, transportation            
 and other expense229,384 230,496 210,778 998,948 995,097 894,406 
 Onboard and other expense67,424 67,424 69,039 348,656 348,656 319,293 
 Net Cruise Cost729,393 730,941 659,463 2,927,401 2,918,715 2,623,700 
 Less: Fuel expense104,399 104,399 94,252 392,685 392,685 361,032 
 Net Cruise Cost Excluding Fuel  624,994   626,542   565,211   2,534,716   2,526,030   2,262,668 
 Less Non-GAAP Adjustments:            
 Non-cash deferred compensation expenses (1)  540   540   768   2,167   2,167   3,292 
 Non-cash share-based compensation expenses (2)  27,186   27,186   23,375   115,983   115,983   87,039 
 Secondary Equity Offering expenses (3)  401   401   487   883   883   949 
 Severance payments and other fees (4)  -   -   513   -   -   2,912 
 Acquisition of Prestige expenses (5)  -   -   -   -   -   500 
 Other (6)  (500)   (500)   1,281   (1,412)   (1,412)   3,886 
 Adjusted Net Cruise Cost Excluding Fuel$  597,367 $  598,915 $  538,787 $  2,417,095 $  2,408,409 $  2,164,090 
              
 Capacity Days 4,883,347 4,883,347 4,552,267 18,841,678 18,841,678 17,363,422 
              
 Gross Cruise Cost per Capacity Day$  210.14 $  210.69 $  206.33 $  226.89 $  226.23 $  221.00 
 Net Cruise Cost per Capacity Day$  149.36 $  149.68 $  144.86 $  155.37 $  154.91 $  151.11 
 Net Cruise Cost Excluding Fuel per Capacity Day$  127.98 $  128.30 $  124.16 $  134.53 $  134.07 $  130.31 
 Adjusted Net Cruise Cost Excluding Fuel per Capacity Day$  122.33 $  122.64 $  118.36 $  128.28 $  127.82 $  124.63 
              
 (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) Secondary Equity Offering expenses are included in marketing, general and administrative expense. 
 (4) Severance payments and other fees related to restructuring costs and other severance arrangements are included in marketing, general and administrative expense. 
 (5) Acquisition of Prestige expenses are included in marketing, general and administrative expense. 
 (6) Other primarily related to expenses and reimbursements for certain legal costs included in marketing, general and administrative expense. 
                    

 

            
NORWEGIAN CRUISE LINE HOLDINGS LTD.    
NON-GAAP RECONCILING INFORMATION    
(Unaudited)    
            
Adjusted Net Income and Adjusted EPS were calculated as follows (in thousands, except share and per share data):        
            
 Three Months Ended Year Ended    
 December 31, December 31,    
 2018 2017 2018 2017    
            
Net income$  154,634 $  98,797 $  954,843 $  759,872    
Non-GAAP Adjustments:           
Non-cash deferred compensation expenses (1)862 768 3,453 3,292    
Non-cash share-based compensation expenses (2)27,186 23,375 115,983 87,039    
Secondary Equity Offering expenses (3)  401   487 883   949    
Severance payments and other fees (4)  -    513   -  2,912    
Acquisition of Prestige expenses (5)  -    -    -    500    
Amortization of intangible assets (6)  6,224   7,569   24,890   30,273    
Extinguishment of debt (7)  -    23,859   6,346   23,859    
Impairment of assets held for sale (8)  -    -    -    2,935    
Tax benefit (9)  -    148   -    (7,802)    
Other (10)  (500)   1,281   (1,412)   3,886    
Adjusted Net Income$  188,807 $  156,797 $  1,104,986 $  907,715    
Diluted weighted-average shares outstanding 221,443,295 230,196,680 224,419,205 229,418,326    
Diluted earnings per share$  0.70 $  0.43 $  4.25 $  3.31    
Adjusted EPS$  0.85 $  0.68 $  4.92 $  3.96    
            
(1) Non-cash deferred compensation expenses related to the crew pension plan and other crew expenses, which are included in payroll and related expense and other income (expense), net.    
    
(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) Secondary Equity Offering expenses are included in marketing, general and administrative expense.    
(4) Severance payments and other fees related to restructuring costs and other severance arrangements are included in marketing, general and administrative expense.    
(5) Acquisition of Prestige expenses are included in marketing, general and administrative expense.
(6) Amortization of intangible assets related to the Acquisition of Prestige, which are included in depreciation and amortization expense.       
(7) Losses on extinguishments of debt are included in interest expense, net, and legal expenses related to the extinguishments are included in marketing, general and administrative expense.  
(8) Impairment charge related to Hawaii land-based operations, which is included in depreciation and amortization expense.    
(9) Tax benefit primarily due to the reversal of tax contingency reserves in 2017.    
(10) Other primarily related to expenses and reimbursements for certain legal costs included in marketing, general and administrative expense.    
     
NORWEGIAN CRUISE LINE HOLDINGS LTD.    
NON-GAAP RECONCILING INFORMATION    
(Unaudited)    
            
EBITDA and Adjusted EBITDA were calculated as follows (in thousands):           
 Three Months Ended Year Ended    
 December 31, December 31,    
 2018 2017 2018 2017    
            
Net income $  154,634 $  98,797 $  954,843 $  759,872    
Interest expense, net  68,178   84,309   270,404   267,804    
Income tax expense  (3,933)   (4,627)   14,467   10,742    
Depreciation and amortization expense  145,412   133,079   561,060   509,957    
EBITDA  364,291 311,558   1,800,774 1,548,375    
            
Other (income) expense, net (1)  (9,299)   (1,285)   (20,653)   10,401    
Non-GAAP Adjustments:           
Non-cash deferred compensation expenses (2)  540   768   2,167   3,292    
Non-cash share-based compensation expenses (3)  27,186   23,375   115,983   87,039    
Secondary Equity Offering expenses (4)  401   487   883   949    
Severance payments and other fees (5)  -    513   -    2,912    
Acquisition of Prestige expenses (6)  -    -    -    500    
Other (7)  (500)   1,281   (1,412)   3,886    
 Adjusted EBITDA$  382,619 $  336,697 $  1,897,742 $  1,657,354    
 Total Revenue$  1,381,193 $  1,249,553 $  6,055,126 $  5,396,175    
 Adjusted EBITDA Margin27.7% 26.9% 31.3% 30.7%    
            
(1) Primarily consists of gains and losses, net for foreign currency exchanges.           
(2) Non-cash deferred compensation expenses related to the crew pension plan and other crew expenses are included in payroll and related expense.    
(3) Non-cash share-based compensation expenses related to equity awards are included in marketing, general and administrative expense and payroll and related expense.    
(4) Secondary Equity Offering expenses are included in marketing, general and administrative expense.    
(5) Severance payments and other fees related to restructuring costs and other severance arrangements are included in marketing, general and administrative expense.    
(6) Acquisition of Prestige expenses are included in marketing, general and administrative expense.          
(7) Other primarily related to expenses and reimbursements for certain legal costs included in marketing, general and administrative expense.    
                

 

    
NORWEGIAN CRUISE LINE HOLDINGS LTD. 
NON-GAAP RECONCILING INFORMATION 
(Unaudited) 
    
    
    
 Adjusted Return on Invested Capital (Adjusted ROIC) was calculated as follows (in thousands): 
  
  Year Ended 
  December 31, 
  2018 
    
 Adjusted EBITDA (1)$  1,897,742 
 Less: Adjusted Depreciation and Amortization  536,170 
 Total  1,361,572 
 Total long-term debt plus shareholder's equity (2)  12,428,918  
 Adjusted Return on Invested Capital11.0% 
    
 (1) See the reconciliation of Net income to Adjusted EBITDA presented within. 
 (2) Calculation consists of a four quarter average of long-term debt and shareholder's equity.

 

    
NORWEGIAN CRUISE LINE HOLDINGS LTD. 
NON-GAAP RECONCILING INFORMATION 
(Unaudited) 
    
Net Leverage was calculated as follows (in thousands):   
    
 Year Ended
 December 31,
 
  
 20182017 
Long-term debt, net of current portion$  5,810,873$  5,688,392 
Current portion of long-term681,218619,373 
Total debt6,492,0916,307,765 
Less: Cash and cash equivalents163,851176,190 
Net Debt6,328,2406,131,575 
Total shareholders' equity  5,963,001  5,749,766 
Net Debt and shareholders' equity$  12,291,241$  11,881,341 
Net Debt-to-Capital51.5%51.6% 
    
Adjusted EBITDA (1)1,897,7421,657,354 
    
Net Leverage3.3x3.7x 
    
(1) See the reconciliation of Net income to Adjusted EBITDA presented within.