Norwegian Cruise Line Holdings Reports Financial Results for the Fourth Quarter and Full Year 2016
Strong Revenue Growth Drives Record Earnings for Fourth Quarter and Full Year 2016
Company's 2017 Booked Position at
Growth Trajectory Strengthened with Recent Newbuild Order for
Full Year 2016 Highlights
- The Company generated GAAP net income of
$633.1 million or EPS of$2.78 compared to$427.1 million or$1.86 in the prior year. Adjusted Net Income was$776.3 million or Adjusted EPS of$3.41 compared to$662.7 million or$2.88 in the prior year.
- Total revenue increased 12.2% to
$4.9 billion . Gross Yield increased 0.7%. Adjusted Net Yield increased 1.8% on a Constant Currency basis.
- Fivefold growth in EPS since 2013, the year of the Company's initial public offering.
- Successful launch of Seven Seas Explorer and Oceania Cruises' Sirena.
Norwegian Cruise Line announced 2018 newbuild, Norwegian Bliss, will be custom designed forAlaska cruising.
Regent Seven Seas Cruises placed order for second Explorer Class Ship for delivery in 2020.
- Debuted
Western Caribbean destination, Harvest Caye.
- Received approval for all three of its award-winning brands to sail to
Cuba in 2017.
Full Year 2017 Highlights
- Company continues strong earnings growth track record and anticipates fourth consecutive year of double-digit EPS growth.
- Excluding the benefit of Norwegian Joy, Company's 2017 booked position at historic high with pricing slightly higher than prior year.
- Renewed demand from North American guests for European voyages, with
Caribbean ,Alaska andHawaii itineraries showing continued strength.
- Norwegian Joy, the first purpose-built ship customized for the Chinese cruise market, will join the fleet, marking the Company's entry into the Chinese cruise market.
Norwegian Cruise Line ,Oceania Cruises andRegent Seven Seas Cruises will sail a total of 41 voyages toCuba in 2017.
- The Company announced the next generation of newbuilds for
Norwegian Cruise Line with a contract to build four 3,300 passenger ships to be delivered in 2022, 2023, 2024 and 2025 with an option for two additional ships to be delivered in 2026 and 2027.
"2016 marks another record year of earnings, continuing our track record of solid EPS growth, which has grown fivefold since 2013, the year of our initial public offering," said
Fourth Quarter 2016 Results
GAAP net income was
Revenue increased 8.5% to
Gross Cruise Cost increased 7.0% in 2016 compared to 2015 due to increases in Capacity Days, total cruise operating expense and marketing, general and administrative expenses. Gross Cruise Costs per Capacity Day decreased 2.9%. Adjusted Net Cruise Cost Excluding Fuel per Capacity Day decreased 0.7% on a Constant Currency and as reported basis.
Fuel price per metric ton, net of hedges decreased 9.8% to
Interest expense, net increased to
Full Year 2016 Results
GAAP net income was
Revenue increased 12.2% to
Gross Cruise Cost increased 9.5% in 2016 compared to 2015 due to an increase in total cruise operating expense as a result of an increase in Capacity Days along with an increase in marketing, general and administrative expenses. Gross Cruise Costs per Capacity Day decreased 1.7%. Adjusted Net Cruise Cost Excluding Fuel per Capacity Day increased 1.7% on a Constant Currency basis and 1.5% on an as reported basis.
Fuel price per metric ton, net of hedges decreased 13.5% to
Interest expense, net increased to
Other income (expense), net was an expense of
2017 Outlook
"With our strong booked position and continuing momentum we look forward to another year of solid financial performance, including double-digit Adjusted EPS growth in 2017," said
2017 Guidance and Sensitivities
In addition to announcing the results for the fourth quarter and full year 2016, the Company also provided guidance for the first 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
| First Quarter 2017 | Full Year 2017 | |||||||||||
| As Reported | Constant Currency |
As Reported | Constant Currency |
|||||||||
| Adjusted Net Yield | Approx. 4.0% | Approx. 4.5% | Approx. 1.25% | Approx. 1.75% | ||||||||
| Adjusted Net Cruise Cost Excluding Fuel per Capacity Day | Approx. 5.25% | Approx. 5.25% | Approx. 1.0% | Approx. 1.0% | ||||||||
| 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) | ||||||||||||
| Effect on Adjusted EPS of a 1% change in Adjusted Net Cruise Cost Excluding Fuel per Capacity Day (2) | ||||||||||||
| (1) Excludes |
||||||||||||
| (2) Based on midpoint of guidance. | ||||||||||||
The following reflects the Company's expectations regarding fuel consumption and pricing, along with accompanying sensitivities.
| First Quarter 2017 | Full Year 2017 | ||||||||
| Fuel consumption in metric tons | 190,000 | 765,000 | |||||||
| Fuel price per metric ton, net of hedges | |||||||||
| Effect on Adjusted EPS of a 10% change in fuel prices, net of hedges | |||||||||
As of
| 2017 | 2018 | 2019 | 2020 | |||||||||||||||||
| % of HFO Consumption Hedged | 81 | % | 78 | % | 56 | % | 50 | % | ||||||||||||
| Average USGC Price / Barrel | $ | 59.69 | $ | 53.02 | $ | 47.82 | $ | 39.50 | ||||||||||||
| % of MGO Consumption Hedged | 70 | % | 23 | % | 22 | % | 0 | % | ||||||||||||
| Average |
$ | 41.11 | $ | 46.50 | $ | 49.25 | - | |||||||||||||
The following reflects the foreign currency exchange rates the Company used in its First Quarter and Full Year 2017 guidance.
| Current Guidance - February | Prior Guidance - November | |||||||||
| 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
Company Updates and Other Business Highlights
Full Portfolio of Brands Receive Approval to Sail to
The Company became the first
Senior Notes Offering
In December, the Company opportunistically entered into an agreement to sell
Next Generation of Ships for the Norwegian Cruise
The Company announced it reached an agreement with Fincantieri S.p.A. to construct the next generation of ships for its Norwegian Cruise Line brand. Four ships are on order for delivery in 2022, 2023, 2024 and 2025, with an option for two additional ships to be delivered in 2026 and 2027, subject to certain conditions. The four 140,000 gross ton ships will each accommodate approximately 3,300 guests. The new class of ships will build upon the highly successful offering of freedom and flexibility found on the brand's most recent Breakaway-Plus Class ships and feature a host of innovative designs that will further elevate its already award-winning guest experience. A priority of the prototype design is energy efficiency, with the aim of optimizing fuel consumption and reducing its impact on the environment. Details on the ships' many other innovative and first at sea guest facing features will be announced at a later date.
The contract price for each of the four vessels is approximately €800 million per ship. The Company has obtained export credit financing with favorable terms to fund 80 percent of the contract price of each ship delivered through 2025, subject to certain conditions.
Commemorating its silver anniversary,
Itinerary Announcements
The Company announced several itineraries for summer 2018 and fall/winter 2018/19 for its
New for 2018/19, Norwegian Escape will reposition for the first time since she was christened in 2015 and will sail to the
New for 2018, Seven Seas Navigator will sail a new 89-night Grand Voyage that delves into the Northern Atlantic and
Appointment of
On
Conference Call
The Company has scheduled a conference call for
About
With a combined fleet of 24 ships with approximately 46,500 berths, these brands offer itineraries to more than 510 destinations worldwide. The Company will introduce eight 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 Free Cash Flow. Free Cash Flow adjusted for proceeds from ship construction financing facilities and other supplemental adjustments.
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.
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
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.
Management NCL Corporation Units.
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.
Secondary Equity Offering(s). Secondary public offering(s) of NCLH's ordinary shares in
Shipboard Retirement Plan. An unfunded defined benefit pension plan for certain crew members which computes benefits based on years of service, subject to certain requirements.
Non-GAAP Financial Measures
We use certain non-GAAP financial measures, such as Net Revenue, 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
Management believes Free Cash Flow provides investors with a useful financial metric to assess our ability to service and repay our debt and to pursue opportunities to enhance our growth after making the capital investments required to support ongoing business operations and long term value creation. Free Cash Flow does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt. Management uses Free Cash Flow as a measure to assess both business performance and overall liquidity.
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 | Year Ended | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenue | ||||||||||||||||
| Passenger ticket | $ | 758,549 | $ | 722,542 | $ | 3,388,954 | $ | 3,129,075 | ||||||||
| Onboard and other | 366,588 | 313,981 | 1,485,386 | 1,215,973 | ||||||||||||
| Total revenue | 1,125,137 | 1,036,523 | 4,874,340 | 4,345,048 | ||||||||||||
| Cruise operating expense | ||||||||||||||||
| Commissions, transportation and other | 195,067 | 175,447 | 813,559 | 765,298 | ||||||||||||
| Onboard and other | 68,470 | 62,101 | 298,886 | 272,802 | ||||||||||||
| Payroll and related | 191,401 | 175,857 | 746,142 | 666,110 | ||||||||||||
| Fuel | 86,645 | 90,866 | 335,174 | 358,650 | ||||||||||||
| Food | 48,397 | 47,672 | 200,071 | 179,641 | ||||||||||||
| Other | 105,130 | 105,805 | 456,393 | 412,948 | ||||||||||||
| Total cruise operating expense | 695,110 | 657,748 | 2,850,225 | 2,655,449 | ||||||||||||
| Other operating expense | ||||||||||||||||
| Marketing, general and administrative | 161,462 | 143,120 | 666,156 | 554,999 | ||||||||||||
| Depreciation and amortization | 115,015 | 117,733 | 432,495 | 432,114 | ||||||||||||
| Total other operating expense | 276,477 | 260,853 | 1,098,651 | 987,113 | ||||||||||||
| Operating income | 153,550 | 117,922 | 925,464 | 702,486 | ||||||||||||
| Non-operating income (expense) | ||||||||||||||||
| Interest expense, net | (88,023 | ) | (68,690 | ) | (276,859 | ) | (221,909 | ) | ||||||||
| Other income (expense), net | 4,979 | (11,079 | ) | (8,302 | ) | (46,668 | ) | |||||||||
| Total non-operating income (expense) | (83,044 | ) | (79,769 | ) | (285,161 | ) | (268,577 | ) | ||||||||
| Net income before income taxes | 70,506 | 38,153 | 640,303 | 433,909 | ||||||||||||
| Income tax benefit (expense) | 1,726 | 159 | (7,218 | ) | (6,772 | ) | ||||||||||
| Net income | $ | 72,232 | $ | 38,312 | $ | 633,085 | $ | 427,137 | ||||||||
| Weighted-average shares outstanding | ||||||||||||||||
| Basic | 227,179,400 | 228,922,432 | 227,121,875 | 226,591,437 | ||||||||||||
| Diluted | 227,821,878 | 230,153,510 | 227,850,286 | 230,040,132 | ||||||||||||
| Earnings per share | ||||||||||||||||
| Basic | $ | 0.32 | $ | 0.17 | $ | 2.79 | $ | 1.89 | ||||||||
| Diluted | $ | 0.32 | $ | 0.17 | $ | 2.78 | $ | 1.86 | ||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| (in thousands) | ||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Net income | $ | 72,232 | $ | 38,312 | $ | 633,085 | $ | 427,137 | ||||||||
| Other comprehensive income (loss): | ||||||||||||||||
| Shipboard Retirement Plan | 174 | 744 | 497 | 1,102 | ||||||||||||
| Cash flow hedges: | ||||||||||||||||
| Net unrealized gain (loss) related to cash flow hedges | (110,797 | ) | (124,351 | ) | 1,711 | (262,852 | ) | |||||||||
| Amount realized and reclassified into earnings | 19,311 | 30,160 | 95,969 | 91,742 | ||||||||||||
| Total other comprehensive income (loss) | (91,312 | ) | (93,447 | ) | 98,177 | (170,008 | ) | |||||||||
| Total comprehensive income (loss) | $ | (19,080 | ) | $ | (55,135 | ) | $ | 731,262 | $ | 257,129 | ||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| (Unaudited) | ||||||||||
| (in thousands, except share data) | ||||||||||
| 2016 | 2015 | |||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 128,347 | $ | 115,937 | ||||||
| Accounts receivable, net | 63,215 | 44,996 | ||||||||
| Inventories | 66,255 | 58,173 | ||||||||
| Prepaid expenses and other assets | 153,276 | 121,305 | ||||||||
| Total current assets | 411,093 | 340,411 | ||||||||
| Property and equipment, net | 10,117,689 | 9,458,805 | ||||||||
| 1,388,931 | 1,388,931 | |||||||||
| Tradenames | 817,525 | 817,525 | ||||||||
| Other long-term assets | 238,673 | 259,085 | ||||||||
| Total assets | $ | 12,973,911 | $ | 12,264,757 | ||||||
| Liabilities and shareholders' equity | ||||||||||
| Current liabilities: | ||||||||||
| Current portion of long-term debt | $ | 560,193 | $ | 629,840 | ||||||
| Accounts payable | 38,002 | 45,488 | ||||||||
| Accrued expenses and other liabilities | 541,753 | 646,449 | ||||||||
| Due to affiliate | - | 20,769 | ||||||||
| Advance ticket sales | 1,172,870 | 1,023,973 | ||||||||
| Total current liabilities | 2,312,818 | 2,366,519 | ||||||||
| Long-term debt | 5,838,494 | 5,767,697 | ||||||||
| Other long-term liabilities | 284,873 | 349,661 | ||||||||
| Total liabilities | 8,436,185 | 8,483,877 | ||||||||
| Commitments and contingencies | ||||||||||
| Shareholders' equity: | ||||||||||
| Ordinary shares, |
||||||||||
| and 227,243,976 shares outstanding at |
||||||||||
| 227,815,301 shares outstanding at |
232 | 232 | ||||||||
| Additional paid-in capital | 3,890,119 | 3,814,536 | ||||||||
| Accumulated other comprehensive income (loss) | (314,473 | ) | (412,650 | ) | ||||||
| Retained earnings | 1,201,103 | 568,018 | ||||||||
| respectively, at cost) | (239,255 | ) | (189,256 | ) | ||||||
| Total shareholders' equity | 4,537,726 | 3,780,880 | ||||||||
| Total liabilities and shareholders' equity | $ | 12,973,911 | $ | 12,264,757 | ||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Unaudited) | ||||||||
| (in thousands) | ||||||||
| Year Ended | ||||||||
| 2016 | 2015 | |||||||
| Cash flows from operating activities | ||||||||
| Net income | $ | 633,085 | $ | 427,137 | ||||
| Adjustments to reconcile net income to | ||||||||
| net cash provided by operating activities: | ||||||||
| Depreciation and amortization expense | 445,635 | 450,335 | ||||||
| Loss on derivatives | 79 | 26,525 | ||||||
| Deferred income taxes, net | (2,448 | ) | 1,269 | |||||
| Gain on contingent consideration | - | (43,400 | ) | |||||
| Write-off of deferred financing fees | 18,930 | 4,070 | ||||||
| Provision for bad debts and inventory | 3,866 | 5,029 | ||||||
| Share-based compensation expense | 66,414 | 42,209 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | (20,983 | ) | (14,803 | ) | ||||
| Inventories | (9,184 | ) | (4,408 | ) | ||||
| Prepaid expenses and other assets | (18,534 | ) | (10,325 | ) | ||||
| Accounts payable | (5,755 | ) | (52,723 | ) | ||||
| Accrued expenses and other liabilities | (6,410 | ) | (5,350 | ) | ||||
| Advance ticket sales | 134,971 | 218,260 | ||||||
| Payment of original issue discount | - | (1,647 | ) | |||||
| Net cash provided by operating activities | 1,239,666 | 1,042,178 | ||||||
| Cash flows from investing activities | ||||||||
| Additions to property and equipment, net | (1,092,091 | ) | (1,121,984 | ) | ||||
| Settlement of derivatives | (36,823 | ) | (83,519 | ) | ||||
| Investment in trademark | - | (750 | ) | |||||
| Net cash used in investing activities | (1,128,914 | ) | (1,206,253 | ) | ||||
| Cash flows from financing activities | ||||||||
| Repayments of long-term debt | (3,744,029 | ) | (1,569,313 | ) | ||||
| Repayments to Affiliate | (18,522 | ) | (37,042 | ) | ||||
| Proceeds from long-term debt | 3,753,928 | 1,855,809 | ||||||
| Proceeds from the exercise of share options | 6,738 | 69,127 | ||||||
| Proceeds from employee share purchase plan | 2,431 | 858 | ||||||
| Purchases of treasury shares | (49,999 | ) | (107,256 | ) | ||||
| Deferred financing fees and other | (48,889 | ) | (16,995 | ) | ||||
| Net cash provided by (used in) financing activities | (98,342 | ) | 195,188 | |||||
| Net increase in cash and cash equivalents | 12,410 | 31,113 | ||||||
| Cash and cash equivalents at beginning of the year | 115,937 | 84,824 | ||||||
| Cash and cash equivalents at end of the year | $ | 128,347 | $ | 115,937 | ||||
| NON-GAAP RECONCILING INFORMATION | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
| The following table sets forth selected statistical information: | ||||||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||
| Passengers carried | 575,344 | 549,191 | 2,337,311 | 2,164,404 | ||||||||||||||||||
| Passenger Cruise Days | 4,392,107 | 4,102,250 | 17,588,707 | 16,027,743 | ||||||||||||||||||
| Capacity Days | 4,201,051 | 3,813,830 | 16,376,063 | 14,700,990 | ||||||||||||||||||
| Occupancy Percentage | 104.5 | % | 107.6 | % | 107.4 | % | 109.0 | % | ||||||||||||||
| 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 | Year Ended | |||||||||||||||||||||
| 2016 | 2016 | |||||||||||||||||||||
| Constant | Constant | |||||||||||||||||||||
| 2016 | Currency | 2015 | 2016 | Currency | 2015 | |||||||||||||||||
| Passenger ticket revenue | $ | 758,549 | $ | 765,144 | $ | 722,542 | $ | 3,388,954 | $ | 3,420,959 | $ | 3,129,075 | ||||||||||
| Onboard and other revenue | 366,588 | 366,588 | 313,981 | 1,485,386 | 1,485,386 | 1,215,973 | ||||||||||||||||
| Total revenue | 1,125,137 | 1,131,732 | 1,036,523 | 4,874,340 | 4,906,345 | 4,345,048 | ||||||||||||||||
| Less: | ||||||||||||||||||||||
| Commissions, transportation and other expense | 195,067 | 196,833 | 175,447 | 813,559 | 821,608 | 765,298 | ||||||||||||||||
| Onboard and other expense | 68,470 | 68,470 | 62,101 | 298,886 | 298,886 | 272,802 | ||||||||||||||||
| Net Revenue | 861,600 | 866,429 | 798,975 | 3,761,895 | 3,785,851 | 3,306,948 | ||||||||||||||||
| Non-GAAP Adjustment: | ||||||||||||||||||||||
| Deferred revenue (1) | - | - | 917 | 1,057 | 1,057 | 32,431 | ||||||||||||||||
| Adjusted Net Revenue | $ | 861,600 | $ | 866,429 | $ | 799,892 | $ | 3,762,952 | $ | 3,786,908 | $ | 3,339,379 | ||||||||||
| Capacity Days | 4,201,051 | 4,201,051 | 3,813,830 | 16,376,063 | 16,376,063 | 14,700,990 | ||||||||||||||||
| Gross Yield | $ | 267.82 | $ | 269.39 | $ | 271.78 | $ | 297.65 | $ | 299.60 | $ | 295.56 | ||||||||||
| Net Yield | $ | 205.09 | $ | 206.24 | $ | 209.49 | $ | 229.72 | $ | 231.18 | $ | 224.95 | ||||||||||
| Adjusted Net Yield | $ | 205.09 | $ | 206.24 | $ | 209.73 | $ | 229.78 | $ | 231.25 | $ | 227.15 | ||||||||||
| (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 | Year Ended | |||||||||||||||||||||
| 2016 | 2016 | |||||||||||||||||||||
| Constant | Constant | |||||||||||||||||||||
| 2016 | Currency | 2015 | 2016 | Currency | 2015 | |||||||||||||||||
| Total cruise operating expense | $ | 695,110 | $ | 696,492 | $ | 657,748 | $ | 2,850,225 | $ | 2,859,037 | $ | 2,655,449 | ||||||||||
| Marketing, general and administrative expense | 161,462 | 161,955 | 143,120 | 666,156 | 667,913 | 554,999 | ||||||||||||||||
| Gross Cruise Cost | 856,572 | 858,447 | 800,868 | 3,516,381 | 3,526,950 | 3,210,448 | ||||||||||||||||
| Less: | ||||||||||||||||||||||
| Commissions, transportation and other expense | 195,067 | 196,833 | 175,447 | 813,559 | 821,608 | 765,298 | ||||||||||||||||
| Onboard and other expense | 68,470 | 68,470 | 62,101 | 298,886 | 298,886 | 272,802 | ||||||||||||||||
| 593,035 | 593,144 | 563,320 | 2,403,936 | 2,406,456 | 2,172,348 | |||||||||||||||||
| Less: Fuel expense | 86,645 | 86,645 | 90,866 | 335,174 | 335,174 | 358,650 | ||||||||||||||||
| Net Cruise Cost Excluding Fuel | 506,390 | 506,499 | 472,454 | 2,068,762 | 2,071,282 | 1,813,698 | ||||||||||||||||
| Less Non-GAAP Adjustments: | ||||||||||||||||||||||
| Non-cash deferred compensation (1) | 792 | 792 | 4,395 | 3,167 | 3,167 | 10,154 | ||||||||||||||||
| Non-cash share-based compensation (2) | 18,125 | 18,125 | 14,354 | 66,414 | 66,414 | 42,211 | ||||||||||||||||
| Secondary Equity Offerings' expenses (3) | - | - | 842 | - | - | 2,226 | ||||||||||||||||
| Severance payments and other fees (4) | 2,737 | 2,737 | 2,535 | 8,223 | 8,223 | 17,580 | ||||||||||||||||
| Management NCL Corporation Units exchange expenses (5) | - | - | - | - | - | 624 | ||||||||||||||||
| Acquisition of Prestige expenses (6) | 1,685 | 1,685 | 9,781 | 6,395 | 6,395 | 27,170 | ||||||||||||||||
| Contingent consideration adjustment (7) | - | - | - | - | - | (43,400 | ) | |||||||||||||||
| Contract renegotiation and termination expenses (8) | 1,000 | 1,000 | - | 1,000 | 1,000 | 3,319 | ||||||||||||||||
| Other (9) | 217 | 217 | - | 217 | 217 | - | ||||||||||||||||
| Adjusted Net Cruise Cost Excluding Fuel | $ | 481,834 | $ | 481,943 | $ | 440,547 | $ | 1,983,346 | $ | 1,985,866 | $ | 1,753,814 | ||||||||||
| Capacity Days | 4,201,051 | 4,201,051 | 3,813,830 | 16,376,063 | 16,376,063 | 14,700,990 | ||||||||||||||||
| Gross Cruise Cost per Capacity Day | $ | 203.89 | $ | 204.34 | $ | 209.99 | $ | 214.73 | $ | 215.37 | $ | 218.38 | ||||||||||
| $ | 141.16 | $ | 141.19 | $ | 147.70 | $ | 146.80 | $ | 146.95 | $ | 147.77 | |||||||||||
| Net Cruise Cost Excluding Fuel per Capacity Day | $ | 120.54 | $ | 120.56 | $ | 123.88 | $ | 126.33 | $ | 126.48 | $ | 123.37 | ||||||||||
| Adjusted Net Cruise Cost Excluding Fuel per Capacity Day | $ | 114.69 | $ | 114.72 | $ | 115.51 | $ | 121.11 | $ | 121.27 | $ | 119.30 | ||||||||||
| (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) 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) Contract renegotiation and termination expenses, net related to the Acquisition of Prestige, which are included in other cruise operating expense and marketing, general and administrative expense. | ||||||||||||||||||||||
| (9) Legal expenses related to the extinguishment of the senior unsecured notes which are included in marketing, general and administrative expense. | ||||||||||||||||||||||
| NON-GAAP RECONCILING INFORMATION | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Adjusted Net Income and Adjusted EPS were calculated as follows (in thousands, except share and per share data): | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||
| Net income | $ | 72,232 | $ | 38,312 | $ | 633,085 | $ | 427,137 | |||||||
| Non-GAAP Adjustments: | |||||||||||||||
| Non-cash deferred compensation (1) | 792 | 4,395 | 3,167 | 10,154 | |||||||||||
| Non-cash share-based compensation (2) | 18,125 | 14,354 | 66,414 | 42,384 | |||||||||||
| Secondary Equity Offerings' Expenses (3) | - | 842 | - | 2,226 | |||||||||||
| Severance payments and other fees (4) | 2,737 | 2,535 | 8,223 | 17,580 | |||||||||||
| Management NCL Corporation Units exchange expenses (5) | - | - | - | 624 | |||||||||||
| Acquisition of Prestige expenses (6) | 1,685 | 9,781 | 6,395 | 27,170 | |||||||||||
| Deferred revenue (7) | - | 917 | 1,057 | 32,431 | |||||||||||
| Amortization of intangible assets (8) | 5,267 | 12,944 | 21,069 | 72,917 | |||||||||||
| Contingent consideration adjustment (9) | - | - | - | (43,400 | ) | ||||||||||
| Loss on extinguishment of debt (10) | 27,962 | 12,624 | 27,962 | 12,624 | |||||||||||
| Derivative adjustment (11) | - | 7,601 | (1,185 | ) | 40,971 | ||||||||||
| Contract renegotiation and termination expenses (12) | 2,502 | - | 2,502 | 6,848 | |||||||||||
| Information technology write-off (13) | - | 12,988 | - | 12,988 | |||||||||||
| Deferred financing fees and other (14) | (3,594 | ) | - | 7,562 | - | ||||||||||
| Adjusted Net Income | $ | 127,708 | $ | 117,293 | $ | 776,251 | $ | 662,654 | |||||||
| Diluted weighted-average shares outstanding | 227,821,878 | 230,153,510 | 227,850,286 | 230,040,132 | |||||||||||
| Diluted earnings per share | $ | 0.32 | $ | 0.17 | $ | 2.78 | $ | 1.86 | |||||||
| Adjusted EPS | $ | 0.56 | $ | 0.51 | $ | 3.41 | $ | 2.88 | |||||||
| (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) 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 passenger ticket revenue. | |||||||||||||||
| (8) Amortization of intangible assets related to the Acquisition of Prestige, which are included in depreciation and amortization expense. | |||||||||||||||
| (9) Contingent consideration fair value adjustment related to the Acquisition of Prestige, which is included in marketing, general and administrative expense. | |||||||||||||||
| (10) Loss on extinguishment of senior unsecured notes, which is included in interest expense, net, and legal expenses related to the extinguishment which are included in marketing, general and administrative expense. | |||||||||||||||
| (11) Losses and net gains for the fair value adjustment of a foreign exchange collar which did not receive hedge accounting and losses due to the dedesignation of certain fuel swaps. These adjustments are included in other income (expense), net. | |||||||||||||||
| (12) Contract renegotiation and termination expenses, net related to the Acquisition of Prestige, which are included in other cruise operating expense, marketing, general and administrative expense and depreciation and amortization expense. | |||||||||||||||
| (13) Expenses related to the write-off of certain information technology items, which are included in depreciation and amortization expense. | |||||||||||||||
| (14) For the year ended |
|||||||||||||||
| NON-GAAP RECONCILING INFORMATION | |||||||||||||||
| (Unaudited) | |||||||||||||||
| EBITDA and Adjusted EBITDA were calculated as follows (in thousands): | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||
| Net income | $ | 72,232 | $ | 38,312 | $ | 633,085 | $ | 427,137 | |||||||
| Interest expense, net | 88,023 | 68,690 | 276,859 | 221,909 | |||||||||||
| Income tax expense (benefit) | (1,726 | ) | (159 | ) | 7,218 | 6,772 | |||||||||
| Depreciation and amortization expense | 115,015 | 117,733 | 432,495 | 432,114 | |||||||||||
| EBITDA | 273,544 | 224,576 | 1,349,657 | 1,087,932 | |||||||||||
| Other (income) expense, net (1) | (4,979 | ) | 11,079 | 8,302 | 46,668 | ||||||||||
| Non-GAAP Adjustments: | |||||||||||||||
| Non-cash deferred compensation (2) | 792 | 4,395 | 3,167 | 10,154 | |||||||||||
| Non-cash share-based compensation (3) | 18,125 | 14,354 | 66,414 | 42,211 | |||||||||||
| Secondary Equity Offerings' expenses (4) | - | 842 | - | 2,226 | |||||||||||
| Severance payments and other fees (5) | 2,737 | 2,535 | 8,223 | 17,580 | |||||||||||
| Management NCL Corporation Units exchange expenses (6) | - | - | - | 624 | |||||||||||
| Acquisition of Prestige expenses (7) | 1,685 | 9,781 | 6,395 | 27,170 | |||||||||||
| Deferred revenue (8) | - | 917 | 1,057 | 32,431 | |||||||||||
| Contingent consideration adjustment (9) | - | - | - | (43,400 | ) | ||||||||||
| Contract renegotiation and termination expenses (10) | 1,000 | - | 1,000 | 3,319 | |||||||||||
| Other (11) | 217 | - | 217 | - | |||||||||||
| Adjusted EBITDA | $ | 293,121 | $ | 268,479 | $ | 1,444,432 | $ | 1,226,915 | |||||||
| (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) Expenses related to the Secondary Equity Offerings, which are included in marketing, general and administrative expense. | |||||||||||||||
| (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 passenger ticket revenue. | |||||||||||||||
| (9) Contingent consideration fair value adjustment related to the Acquisition of Prestige, which is included in marketing general and administrative expense. | |||||||||||||||
| (10) Contract renegotiation and termination expenses, net related to the Acquisition of Prestige, which are included in other cruise operating expense and marketing, general and administrative expense. | |||||||||||||||
| (11) Legal expenses related to the extinguishment of senior unsecured notes included in marketing, general and administrative expense. | |||||||||||||||
| NON-GAAP RECONCILING INFORMATION | ||||||||
| (Unaudited) | ||||||||
| Free Cash Flow was calculated as follows (in thousands): | ||||||||
| Year Ended | ||||||||
| 2016 | 2015 | |||||||
| Net cash provided by operating activities | $ | 1,239,666 | $ | 1,042,178 | ||||
| Less: Capital expenditures for ship construction | (672,598 | ) | (902,251 | ) | ||||
| Less: Capital expenditures for business enhancements and other | (419,493 | ) | (219,733 | ) | ||||
| Free Cash Flow | 147,575 | (79,806 | ) | |||||
| Proceeds from ship construction financing facilities | 487,213 | 686,756 | ||||||
| Adjusted free cash flow | $ | 634,788 | $ | 606,950 | ||||
Investor Relations ContactAndrea DeMarco (305) 468-2339 InvestorRelations@nclcorp.com Media ContactsVanessa Picariello (305) 436-4713 PublicRelations@ncl.com
Source:
News Provided by Acquire Media
