Norwegian Cruise Line Holdings Ltd.
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Norwegian Cruise Line Holdings Reports Fourth Quarter and Full Year 2020 Financial Results and Provides Business Update


MIAMI, Florida – February 25, 2021 – 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, 2020 and provided a business update.

“While 2020 has been without a doubt the most challenging year in the Company’s 50 plus year history, our team responded to the unprecedented environment with swift and decisive action. Our Company demonstrated once again its adaptability and resiliency, underscored by the unwavering commitment and dedication from our team members across the globe,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings Ltd. “Looking ahead, we are encouraged by the accelerating rollout of vaccines, the progress towards herd immunity and the strong demand for future cruise vacations.”

Health and Safety
The Company continues to work with its expert advisors, the Healthy Sail Panel, and global public health authorities and government agencies to refine its comprehensive and multi-layered health and safety strategy to enhance its already rigorous health and safety standards in response to COVID-19. The Company is continuously evaluating and identifying ways to improve these standards as science, technology and knowledge of SARS-CoV-2 advances including incorporating recent vaccine advancements into its overall strategy for the eventual return to service.

The Company continues to work through the requirements of the U.S. Centers for Disease Control and Prevention (“CDC”) after the issuance of the Framework for Conditional Sailing Order (the “Conditional Order”) which permits cruise ship passenger operations in U.S. waters under certain conditions. However, significant uncertainties remain regarding specific requirements of the Conditional Order including pending technical instructions from the CDC.

Booking Environment and Outlook
The Company’s current suspension of global cruise voyages includes all voyages on Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises through May 31, 2021.

While overall booking volumes since the emergence of the COVID-19 global pandemic remain below historical levels, there continues to be demand for future cruise vacations. Despite reduced sales and marketing investments, and a travel agency industry that has not been at full strength for months, bookings have been strong for future periods resulting in an elongated booking window as guests book further into the future. The Company’s overall cumulative booked position for the second half of 2021 remains below historical levels, driven by continued uncertainty around timing of the resumption of cruising and the shift of limited marketing investments to 2022 sailings. Pricing for the second half of 2021 is in line with pre-pandemic levels, even after including the dilutive impact of future cruise credits (“FCC”).

While still early in the booking cycle, 2022 booking trends are very positive driven by strong pent up demand. The Company is experiencing robust future demand across all brands with the overall cumulative booked position for the first half of 2022 significantly ahead of 2019’s record levels with pricing in line when excluding the dilutive impact of FCCs.

As of December 31, 2020, the Company had $1.2 billion of advance ticket sales, including the long-term portion of advance ticket sales, which includes approximately $0.85 billion of future cruise credits.

Liquidity and Financial Action Plan
The Company continues to take swift, proactive measures to mitigate the financial and operational impacts of the COVID-19 pandemic. This financial action plan includes cost reduction and cash conservation levers which include reducing operating and capital expenditures, improving the Company’s debt maturity profile and securing additional capital. As of December 31, 2020, the Company’s total debt position was $11.8 billion and the Company’s cash and cash equivalents was $3.3 billion. The Company was in compliance with all debt covenants as of December 31, 2020.

The Company has taken the following additional actions to enhance liquidity since September 30, 2020:

• Raised $824 million, net of underwriting fees, with an equity offering of 40 million ordinary shares in November 2020.
• Issued $850 million of 5.875% senior unsecured notes due 2026 in an oversubscribed offering in December 2020.
• Amended all export credit agency backed credit agreements to defer approximately $680 million of amortization payments through March 31, 2022 and received covenant waivers through December 31, 2022.
• Deferred certain newbuild-related payments of approximately €220 million through March 31, 2022.
• Provided additional near-term financial flexibility by amending the Pride of America and Norwegian Jewel credit facilities to suspend the testing of certain financial covenants.
• Amended Senior Secured Credit Facility to defer approximately $70 million of certain amortization payments due prior to June 30, 2022 and suspend the testing of certain financial covenants through December 31, 2022.
• Extended salary reductions and furloughs for certain shoreside team members.
• Continued significant reductions or deferrals of near-term marketing expenses and non-essential capital expenditures.

Full Year 2020 Results
GAAP net loss was $(4.0) billion or EPS of $(15.75) compared to net income of $930.2 million or EPS of $4.30 in the prior year. The Company reported Adjusted Net Loss of $(2.2) billion or Adjusted EPS of $(8.64) in 2020. This compares to Adjusted Net Income and Adjusted EPS of $1.1 billion and $5.09, respectively, in 2019.

Revenue decreased 80.2% to $1.3 billion compared to $6.5 billion in 2019. The adverse impact on revenue was due to the cancellation of the vast majority of sailings in 2020 as a result of the COVID-19 pandemic, which resulted in a 78.6% decrease in Capacity Days.

Cruise operating expense decreased 53.8% in 2020 compared to 2019 driven by the suspension of global cruise voyages. In 2020, expenses subsequent to the suspension of voyages primarily included the cost of protected commissions, crew costs including salaries, food and other repatriation costs, fuel and other ongoing costs such as insurance and ship maintenance.

Fuel price per metric ton, net of hedges increased to $599 from $491 in 2019. The Company reported fuel expense of $264.7 million in 2020.

Interest expense, net was $482.3 million in 2020 compared to $272.9 million in 2019. The increase in 2020 was driven by additional debt outstanding at higher interest rates, partially offset by lower LIBOR. In 2020, interest expense also reflects losses on extinguishment of debt and debt modification costs of $27.8 million. 2019 included losses on extinguishment of debt and debt modification costs of $16.7 million.

Other income (expense), net was expense of $33.6 million in 2020 compared to income of $6.2 million in 2019. In 2020, the expense primarily related to losses on foreign currency exchange and losses on fuel derivatives recognized in earnings. A $23.2 million net loss was recorded in the year primarily related to the de-designation of fuel hedges.

Income tax benefit (expense) was an expense of $12.5 million in 2020 compared to a benefit of $18.9 million in 2019. In 2020, the tax expense is primarily due to a valuation allowance of $39.6 million recognized in the fourth quarter on certain net operating loss carryforwards partially offset by operating losses.



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 28 ships with approximately 59,150 berths, these brands offer itineraries to more than 490 destinations worldwide. The Company has nine additional ships scheduled for delivery through 2027.
Cautionary Statement Concerning Forward-Looking Statements
Some of the statements, estimates or projections contained in this release are “forward-looking statements” within the meaning of the U.S. federal securities laws intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this release, including, without limitation, those regarding our business strategy, financial position, results of operations, plans, prospects, actions taken or strategies being considered with respect to our liquidity position, valuation and appraisals of our assets and objectives of management for future operations (including those regarding expected fleet additions, our voluntary suspension, our ability to weather the impacts of the COVID-19 pandemic and the length of time we can withstand a suspension of voyages, our expectations regarding the resumption of cruise voyages and the timing for such resumption of cruise voyages, the implementation of and effectiveness of our health and safety protocols, operational position, demand for voyages, financing opportunities and extensions, and future cost mitigation and cash conservation efforts and efforts to reduce operating expenses and capital expenditures) 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: the spread of epidemics, pandemics and viral outbreaks and specifically, the COVID-19 pandemic, including its effect on the ability or desire of people to travel (including on cruises), which are expected to continue to adversely impact our results, operations, outlook, plans, goals, growth, reputation, cash flows, liquidity, demand for voyages and share price; our ability to comply with the CDC’s Framework for Conditional Sailing Order and any additional or future regulatory restrictions on our operations and to otherwise develop enhanced health and safety protocols to adapt to the pandemic’s unique challenges once operations resume and to otherwise safely resume our operations when conditions allow; coordination and cooperation with the CDC, the federal government and global public health authorities to take precautions to protect the health, safety and security of guests, crew and the communities visited and the implementation of any such precautions; our ability to work with lenders and others or otherwise pursue options to defer, renegotiate or refinance our existing debt profile, near-term debt amortization, newbuild related payments and other obligations and to work with credit card processors to satisfy current or potential future demands for collateral on cash advanced from customers relating to future cruises; our future need for additional financing, which may not be available on favorable terms, or at all, and may be dilutive to existing shareholders; our indebtedness and restrictions in the agreements governing our indebtedness that require us to maintain minimum levels of liquidity and otherwise limit our flexibility in operating our business, including the significant portion of assets that are collateral under these agreements; the accuracy of any appraisals of our assets as a result of the impact of COVID-19 or otherwise; our success in reducing operating expenses and capital expenditures and the impact of any such reductions; our guests’ election to take cash refunds in lieu of future cruise credits or the continuation of any trends relating to such election; trends in, or changes to, future bookings and our ability to take future reservations and receive deposits related thereto; the unavailability of ports of call; future increases in the price of, or major changes or reduction in, commercial airline services; 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; any further impairment of our trademarks, trade names or goodwill; breaches in data security or other disturbances to our information technology and other networks or our actual or perceived failure to comply with requirements regarding data privacy and protection; changes in fuel prices and the type of fuel we are permitted to use and/or other cruise operating costs; mechanical malfunctions and repairs, delays in our shipbuilding program, maintenance and refurbishments and the consolidation of qualified shipyard facilities; the risks and increased costs associated with operating internationally; fluctuations in foreign currency exchange rates; overcapacity in key markets or globally; our expansion into and investments in new markets; our inability to obtain adequate insurance coverage; pending or threatened litigation, investigations and enforcement actions; 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 or employee relations issues; our reliance on third parties to provide hotel management services for certain ships and certain other services; our inability to keep pace with developments in technology; 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 with the Securities and Exchange Commission. Additionally, many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the COVID-19 pandemic. It is not possible to predict or identify all such risks. There may be additional risks that we consider immaterial or which are unknown. 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 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.
PRESS CONTACT - ATLANTIC LINK
Lise Hvid Holm
Phone: +45 2267 8903
E-mail: lh@atlanticlink.net
PRESS CONTACT - NCL
Veronika Bahnmann
Phone: +49 (0)611 36 07 121
E-mail: presse@ncl.de
PRESS CONTACT - OCEANIA CRUISES
Louise Prior
E-Mail: louise@priorpr.com

PRESS CONTACT - REGENT SEVEN SEAS CRUISES
James Arnold
E-Mail: jarnold@rssc.com
Atlantic Link
www.atlanticlink.net
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