Norwegian Cruise Line(US:NCLH)2025-05-05 20:06Financial Performance - Total revenue for the three months ended March 31, 2025, was $2,127.6 million, a decrease of 2.9% compared to $2,191.2 million for the same period in 2024 [30]. - The company reported a net loss of $40.3 million for the three months ended March 31, 2025, compared to a net income of $17.4 million for the same period in 2024 [28]. - Adjusted operating income for the three months ended March 31, 2025, was $221.8 million, down from $241.1 million in 2024, reflecting a decrease of 8.0% [30]. - The company recognized foreign currency losses of $22.5 million for the three months ended March 31, 2025, compared to gains of $13.3 million in 2024 [31]. - Fuel expenses accounted for 13.4% of total cruise operating expenses for the three months ended March 31, 2025 [163]. Revenue Sources - Revenue from North America for the three months ended March 31, 2025, was $1,446.7 million, down from $1,560.8 million in 2024, representing a decline of 7.3% [35]. - The majority of the company's transactions are settled in U.S. dollars, with approximately 84-85% of total revenue attributed to U.S.-sourced guests over the past three fiscal years [36]. Liquidity and Debt - As of March 31, 2025, the company had liquidity of approximately $1.4 billion, including cash and cash equivalents of $184.4 million and $1.0 billion available under its Revolving Loan Facility [24]. - Scheduled principal repayments on long-term debt total $14.36 billion as of March 31, 2025 [60]. - As of March 31, 2025, NCLC was in compliance with all debt covenants [61]. - The Seventh ARCA increased the aggregate amount of commitments under the Revolving Loan Facility from $1.2 billion to $1.7 billion [50]. - As of March 31, 2025, the fair value of long-term debt was $13.7 billion, an increase from $12.8 billion as of December 31, 2024, reflecting a $0.6 billion difference from carrying values [73]. Ship Orders and Deliveries - The company has three Prima Class Ships on order for delivery from 2026 through 2028 and one Allura Class Ship for delivery in 2025 [23]. - The company expects to add 12 additional ships to its fleet from 2025 through 2036, enhancing its market presence [22]. - The company has 12 ships on order with a combined contract price of approximately €17.2 billion ($18.6 billion) as of March 31, 2025 [78]. - Minimum annual payments for non-cancelable ship construction contracts total $17.77 billion, with the largest payment of $2.30 billion due in 2030 [79]. - The company took delivery of Norwegian Aqua in March 2025, with export credit financing covering 80% of the contract price [52]. Derivatives and Hedging - The company had fuel swaps covering approximately 994 thousand metric tons of projected fuel purchases, maturing through December 31, 2027 [66]. - The notional amount of foreign currency contracts was €709.9 million (approximately $767.8 million) as of March 31, 2025, used to mitigate foreign currency exchange rate volatility [67]. - Total derivatives designated as hedging instruments amounted to $13,045 thousand in assets and $14,501 thousand in liabilities as of March 31, 2025 [68]. - The total gain recognized in other comprehensive loss from cash flow hedges was $30,825 thousand for the three months ended March 31, 2025 [72]. - The company does not anticipate non-performance by any significant counterparties in its derivative agreements [65]. Share-Based Compensation - The company granted 4.5 million time-based restricted share unit awards and 1.1 million performance-based restricted share units in March 2025 [75]. - The total share-based compensation expense for the three months ended March 31, 2025, was $20,281 thousand, compared to $21,948 thousand for the same period in 2024 [76]. Legal and Regulatory Matters - The company is cooperating with ongoing investigations related to its marketing during the COVID-19 pandemic, outcomes of which are uncertain [80]. - The company faces a final judgment of approximately $112.9 million related to the Helms-Burton Act, with an appeal currently in process [81]. Interest Rates and Currency Exposure - As of March 31, 2025, 93% of the company's debt was fixed, with a potential $10.3 million increase in annual interest expense for a 1% rise in Term SOFR rates [159]. - The company has unhedged foreign currency payments totaling €15.7 billion ($17.0 billion) related to ship construction contracts as of March 31, 2025 [160]. - A 10% change in the euro could result in a $1.7 billion change in the U.S. dollar value of remaining foreign currency payments [162]. - A 10% increase in the weighted-average fuel price would raise anticipated 2025 fuel expenses by $43.6 million, partially offset by a $23.4 million increase in the fair value of fuel swap agreements [164].