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Norwegian Cruise Line Reports Results For The Fourth Quarter And Full Year 2012

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 measures 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, we utilize Adjusted Net Income as a supplemental financial measure to demonstrate GAAP net income excluding non-recurring, infrequent or unusual charges. These charges vary from period to period; thus, our presentation of Adjusted Net Income may not be indicative of future adjustments or results. 

Our non-GAAP financial measures may not be comparable to other companies. Please see a historical reconciliation of these measures to items in our consolidated financial statements. 

Note on Forward-Looking Statements

This release may contain "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. The words "expect," "anticipate," "goal," "project," "plan," "believe," "seek," "will," "may," "forecast," "estimate," "intend," "future," and similar expressions may identify forward-looking statements, which are not historical in nature. These forward-looking statements reflect Norwegian's current expectations, and are subject to a number of risks, uncertainties, and assumptions. Among the important risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements are the adverse impact of the worldwide economic downturn and related factors; changes in cruise capacity, as well as capacity changes in the overall vacation industry; intense competition from other cruise companies as well as non-cruise vacation alternatives; our substantial leverage, including the inability to generate the necessary amount of cash to service our existing debt and repay our debt, including if payment is accelerated; changes in fuel prices or other cruise operating costs; the risks associated with operating internationally; the continued borrowing availability under our credit facilities; compliance with our debt covenants; our ability to incur significantly more debt despite our substantial existing indebtedness; the impact of volatility and disruptions in the global credit and financial markets; adverse events impacting the security of travel; accidents and other incidents affecting the health, safety, security and vacation satisfaction of passengers or causing damage to ships; the impact of problems encountered at shipyards or with our contracts with shipyards; and other factors discussed in the Company's filings with the Securities and Exchange Commission (the "SEC"). For more information concerning factors that could cause actual results to differ materially from those conveyed in the forward-looking statements, please refer to the "Risk Factors" section of the registration statement on Form S-1 filed by Norwegian Cruise Line Holdings Ltd. ("NCLH") with the SEC and subsequent filings by NCLH and the Company. You should not place undue reliance on forward-looking statements as a prediction of actual results. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in expectations or events, conditions or circumstances on which any such statements are based. In addition, certain financial measures in this website constitute non-GAAP financial measures as defined by Regulation G. A reconciliation of these items can be found on the Company's web site at  www.investor.ncl.com

 
NCL CORPORATION LTD. (1)
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands of dollars)
         
  Three Months Ended Year Ended
  December 31, December 31,
  2012 2011 2012 2011
         
Revenue        
Passenger ticket  $ 346,692 $ 337,383 $ 1,604,563 $ 1,563,363
Onboard and other   156,479  151,211  671,683  655,961
Total revenue  503,171  488,594  2,276,246  2,219,324
Cruise operating expense        
Commissions, transportation and other  88,891  91,098  410,531  410,709
Onboard and other  37,065  35,679  173,916  169,329
Payroll and related  72,376  71,805  293,059  290,822
Fuel  76,935  61,787  283,678  243,503
Food  30,644  29,597  125,807  124,933
Other  38,683  53,415  191,442  228,580
Total cruise operating expense  344,594  343,381  1,478,433  1,467,876
Other operating expense        
Marketing, general and administrative 60,435 58,173 251,183 251,351
Depreciation and amortization  48,637 44,701 189,537 183,985
Total other operating expense  109,072  102,874  440,720  435,336
Operating income  49,505 42,339 357,093 316,112
Non-operating income (expense)        
Interest expense, net (47,659) (45,748) (189,930) (190,187)
Other income (expense) (793) 1,468 1,393 934
Total non-operating income (expense) (48,452) (44,280) (188,537) (189,253)
Net income (loss) $ 1,053 $ (1,941) $ 168,556 $ 126,859
         
Earnings (Loss) Per Share        
Basic $ 0.01 $ (0.01) $ 0.95 $ 0.71
Diluted $ 0.01 $ (0.01) $ 0.94 $ 0.71
         
Weighted-Average Shares Outstanding (1)
Basic  178,343,470  177,968,484  178,232,850  177,869,461
Diluted  179,144,241  177,968,484  179,023,683  178,859,720
         
(1) The financial statements presented are those of NCL Corporation Ltd., however, we have retrospectively applied the exchange of ordinary shares due to the Corporate Reorganization.
 
 
NCL CORPORATION LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited, in thousands of dollars)
         
  Three Months Ended Year Ended
  December 31, December 31,
  2012 2011 2012 2011
         
Net Income (loss) $ 1,053 $ (1,941) $ 168,556 $ 126,859
Other comprehensive income (loss):        
Change related to Shipboard Retirement Plan  (1,624)  (2,306)  (1,330)  (2,615)
Changes related to cash flow hedges:        
Net unrealized gain related to cash flow hedges  4,797  4,931  19,907  15,198
Amount realized and reclassified into earnings  2,907  (10,399)  (16,402)  (36,686)
Total other comprehensive income (loss)  6,080  (7,774)  2,175  (24,103)
Total comprehensive income (loss) $ 7,133 $ (9,715) $ 170,731 $ 102,756
 
 
NCL CORPORATION LTD.
CONSOLIDATED BALANCE SHEETS 
unaudited, in thousands, except share data 
     
     
  December 31, 2012 December 31, 2011
Assets     
Current assets:     
Cash and cash equivalents $ 45,500 $ 58,926
Accounts receivable, net  15,062 8,159
Inventories  39,681 36,234
Prepaid expenses and other assets  64,686 48,824
Total current assets  164,929 152,143
     
Property and equipment, net  4,960,142 4,640,093
Goodwill and tradenames  611,330 602,792
Other long-term assets  202,026 167,383
Total assets  $ 5,938,427 $ 5,562,411
Liabilities and shareholders' equity     
Current liabilities:     
Current portion of long-term debt  $ 221,233 $ 200,582
Accounts payable  79,126 80,327
Accrued expenses and other liabilities  231,040 208,102
Due to affiliate 59,897 2,963
Advance ticket sales  353,793 325,472
Total current liabilities  945,089 817,446
Long-term debt  2,764,120 2,837,499
Due to affiliate 147,364 --
Other long-term liabilities  63,070 63,003
Total liabilities  3,919,643 3,717,948
Commitments and contingencies     
Shareholders' equity:     
Ordinary shares, $.0012 par value; 40,000,000 shares authorized, 21,000,000 shares issued and outstanding  25 25
Additional paid-in capital  2,335,563 2,331,973
Accumulated other comprehensive income (loss) (17,619) (19,794)
Retained earnings (deficit) (299,185) (467,741)
Total shareholders' equity  2,018,784 1,844,463
Total liabilities and shareholders' equity $ 5,938,427 $ 5,562,411
 
 
NCL CORPORATION LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
     
  Year Ended
  December 31,
  2012 2011
Cash flows from operating activities    
Net income $ 168,556 $ 126,859
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization expense 216,137 211,049
Loss (gain) on derivatives 1,945 (2,338)
Write-off of deferred financing fees 2,358 --
Share-based compensation expense 5,160 1,211
Premium on debt issuance 6,000 --
Changes in operating assets and liabilities:    
Accounts receivable, net (4,592) (280)
Inventories (3,447) (3,471)
Prepaid expenses and other assets (3,490) (4,264)
Accounts payable (1,228) 15,928
Accrued expenses and other liabilities (3,107) (15,876)
Advance ticket sales 14,302 28,172
Net cash provided by operating activities 398,594 356,990
Cash flows from investing activities    
Additions to property and equipment and other (303,840) (184,797)
Net cash used in investing activities (303,840) (184,797)
Cash flows from financing activities    
Repayments of long-term debt (859,422) (439,959)
Proceeds from long-term debt 800,618 273,375
Other, primarily deferred financing fees (49,376) (1,730)
Net cash used in financing activities (108,180) (168,314)
Net increase (decrease) in cash and cash equivalents (13,426) 3,879
Cash and cash equivalents at beginning of year 58,926 55,047
Cash and cash equivalents at end of year $ 45,500 $ 58,926
   
   
NCL CORPORATION LTD.  
NON-GAAP RECONCILING INFORMATION  
(unaudited)  
             
The following table sets forth selected statistical information:            
             
    Three Months Ended December 31, Year Ended December 31,  
    2012 2011 2012 2011  
             
Passengers carried   342,866 370,037 1,503,107 1,530,113  
Passenger Cruise Days   2,466,955 2,472,209 10,332,914 10,227,438  
Capacity Days    2,410,639 2,370,682 9,602,730 9,454,570  
Occupancy Percentage   102.3% 104.3% 107.6% 108.2%  
             
             
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,
    2012     2012  
    Constant     Constant  
  2012 Currency 2011 2012 Currency 2011
             
Passenger ticket revenue $ 346,692 $ 347,323 $ 337,383 $1,604,563 $1,621,412 $1,563,363
Onboard and other revenue 156,479 156,479 151,211 671,683 671,683 655,961
Total revenue 503,171 503,802 488,594 2,276,246 2,293,095 2,219,324
Less:            
Commissions, transportation and other expense  88,891 89,058 91,098 410,531 415,030 410,709
Onboard and other expense 37,065 37,065 35,679 173,916 173,916 169,329
Net Revenue $ 377,215 $ 377,679 $ 361,817 $1,691,799 $1,704,149 $1,639,286
             
Capacity Days  2,410,639 2,410,639 2,370,682 9,602,730 9,602,730 9,454,570
             
Gross Yield $ 208.73 $ 208.99 $ 206.10 $ 237.04 $ 238.80 $ 234.74
Net Yield $ 156.48 $ 156.67 $ 152.62 $ 176.18 $ 177.47 $ 173.39
             
             
Gross Cruise Cost, Net Cruise Cost and 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,
    2012     2012  
    Constant     Constant  
  2012 Currency 2011 2012 Currency 2011
Total cruise operating expense $ 344,594 $ 346,434 $ 343,381 $1,478,433 $1,487,544 $1,467,876
Marketing, general and administrative expense 60,435 60,476 58,173 251,183 252,615 251,351
Gross Cruise Cost  405,029  406,910  401,554  1,729,616  1,740,159  1,719,227
Less:            
Commissions, transportation            
 and other expense 88,891 89,058 91,098 410,531 415,030 410,709
Onboard and other expense 37,065 37,065 35,679 173,916 173,916 169,329
Net Cruise Cost 279,073 280,787 274,777 1,145,169 1,151,213 1,139,189
Less: Fuel expense 76,935 76,935 61,787 283,678 283,678 243,503
Net Cruise Cost Excluding Fuel $ 202,138 $ 203,852 $ 212,990 $ 861,491 $ 867,535 $ 895,686
             
Capacity Days  2,410,639 2,410,639 2,370,682 9,602,730 9,602,730 9,454,570
             
Gross Cruise Cost per Capacity Day $ 168.02 $ 168.80 $ 169.38 $ 180.12 $ 181.22 $ 181.84
Net Cruise Cost per Capacity Day  $ 115.77 $ 116.48 $ 115.91 $ 119.25 $ 119.88 $ 120.49
Net Cruise Cost Excluding Fuel per Capacity Day $ 83.85 $ 84.56 $ 89.84 $ 89.71 $ 90.34 $ 94.74
 
 
NCL CORPORATION LTD.
NON-GAAP RECONCILING INFORMATION
(unaudited)
         
Adjusted net income was calculated as follows (in thousands):        
         
  Three Months Ended Year Ended
  December 31, December 31,
  2012 2011 2012 2011
         
Net income (loss) $ 1,053 $ (1,941) $ 168,556 $ 126,859
Share-based compensation charge (1) 4,500 -- 4,500 --
Adjusted net income (loss) $ 5,553 $ (1,941) $ 173,056 $ 126,859
         
Weighted-average shares outstanding - diluted 179,144,241 177,968,484 179,023,683 178,859,720
         
Diluted earnings (loss) per share $ 0.01 $ (0.01) $ 0.94 $ 0.71
Share-based compensation charge (1)  0.03  --  0.03  --
Adjusted diluted earnings (loss) per share (2) $ 0.04 $ (0.01) $ 0.97 $ 0.71
         
(1) Non-recurring, non-cash share-based compensation charge related to former CEO.      
(2) Differences due to rounding.      
         
Adjusted EBITDA was calculated as follows (in thousands):        
         
  Three Months Ended Year Ended
  December 31, December 31,
  2012 2011 2012 2011
         
Net income (loss) $ 1,053 $ (1,941) $ 168,556 $ 126,859
Interest expense, net 47,659 45,748 189,930 190,187
Depreciation and amortization expense 48,637 44,701 189,537 183,985
EBITDA 97,349 88,508 548,023 501,031
Other (income) expense 793 (1,468) (1,393) (934)
Other (1) 5,318 1,212 9,004 5,942
Adjusted EBITDA $ 103,460 $ 88,252 $ 555,634 $ 506,039
         
(1) Includes non-cash compensation and non-recurring, non-cash share-based compensation charge related to former CEO. 
 
 
NCL CORPORATION LTD.
NON-GAAP RECONCILING INFORMATION
(unaudited)
     
Net Debt-to-Capital was calculated as follows (in thousands):  
     
   
  December 31,
  2012 2011
     
Long-term debt, net of current portion $ 2,764,120 $ 2,837,499
Current portion of long-term 221,233 200,582
Total debt 2,985,353 3,038,081
Less: Cash and cash equivalents 45,500 58,926
Net Debt $ 2,939,853 $ 2,979,155
     
Total shareholders' equity $ 2,018,784 $ 1,844,463
Total debt 2,985,353 3,038,081
Total debt and shareholder's equity $ 5,004,137 $ 4,882,544
Debt-to-Capital 59.7% 62.2%
Net Debt 2,939,853 2,979,155
Net Debt and shareholders' equity $ 4,958,637 $ 4,823,618
Net Debt-to-Capital 59.3% 61.8%
     
     
Adjusted Free Cash Flow was calculated as follows (in thousands):  
     
  Year Ended
   December 31,
  2012 2011
     
Net cash provided by operating activities $ 398,594 $ 356,990
Less: Additions to property and equipment and other (303,840) (184,797)
Proceeds from newbuild financing facilities 133,493 86,105
Adjusted Free Cash Flow $ 228,247 $ 258,298
CONTACT: Investor Relations Contact
         Andrea DeMarco
         (305) 468-2463
         InvestorRelations@ncl.com
         
         Media Contact
         AnneMarie Mathews
         (305) 436-4799
         PublicRelations@ncl.com

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