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What changed in Norwegian Cruise Line Holdings's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Norwegian Cruise Line Holdings's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+369 added−398 removedSource: 10-K (2026-03-02) vs 10-K (2025-02-27)

Top changes in Norwegian Cruise Line Holdings's 2025 10-K

369 paragraphs added · 398 removed · 287 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

113 edited+27 added−56 removed122 unchanged
Biggest changeFarkas, the Company’s Executive Vice President, General Counsel, Chief Development Officer and Secretary, is our agent for service of process at our principal executive offices. ​ 8 Table of Contents Our Fleet ​ The following table presents information about our ships and their primary areas of operation based on current and future itineraries, which are subject to change. ​ ​ Ship (1) Year Built Primary Areas of Operation Norwegian ​ ​ ​ Norwegian Luna (2) ​ 2026 ​ The Bahamas, Caribbean ​ Norwegian Aqua (3) ​ 2025 ​ Bermuda, Europe, Caribbean ​ Norwegian Viva ​ 2023 ​ The Bahamas, Caribbean, Europe ​ Norwegian Prima ​ 2022 ​ The Bahamas, Bermuda, Caribbean, Europe ​ Norwegian Encore ​ 2019 ​ Alaska, The Bahamas, Caribbean, Central America, Mexico-Pacific, U.S.
Biggest changeFarkas, the Company’s Executive Vice President, General Counsel, Chief Development Officer and Secretary, is our agent for service of process at our principal executive offices. ​ 8 Table of Contents Our Fleet ​ The following table presents information about our ships: ​ ​ ​ ​ ​ ​ ​ ​ ​ Ship (1) ​ ​ ​ Year Built Norwegian ​ ​ Norwegian Aura (2) ​ 2027 Norwegian Luna (3) ​ 2026 Norwegian Aqua ​ 2025 Norwegian Viva ​ 2023 Norwegian Prima ​ 2022 Norwegian Encore ​ 2019 Norwegian Bliss ​ 2018 Norwegian Joy ​ 2017 Norwegian Escape ​ 2015 Norwegian Getaway ​ 2014 Norwegian Breakaway ​ 2013 Norwegian Epic ​ 2010 Norwegian Gem ​ 2007 Norwegian Jade ​ 2006 Norwegian Pearl ​ 2006 Norwegian Jewel ​ 2005 Pride of America ​ 2005 Norwegian Dawn ​ 2002 Norwegian Star ​ 2001 Norwegian Sun ​ 2001 Norwegian Sky ​ 1999 Norwegian Spirit ​ 1998 Oceania Cruises ​ ​ Oceania Sonata (4) ​ 2027 Oceania Allura ​ 2025 Oceania Vista ​ 2023 Oceania Riviera ​ 2012 Oceania Marina ​ 2011 Oceania Nautica ​ 2000 Oceania Sirena ​ 1999 Oceania Regatta ​ 1998 Oceania Insignia ​ 1998 Regent ​ ​ ​ ​ Seven Seas Prestige (5) ​ 2026 Seven Seas Grandeur ​ 2023 Seven Seas Splendor ​ 2020 Seven Seas Explorer ​ 2016 Seven Seas Voyager ​ 2003 Seven Seas Mariner ​ 2001 Seven Seas Navigator ​ 1999 (1) The table above does not include the 13 additional ships on order.
We proudly offer Family Care Benefits to our eligible shoreside employees that includes paid leave at 100% of an employee’s salary for maternity, paternity, and adoption leaves. Family planning assistance for fertility/surrogacy services and adoption support are also offered.
We proudly offer Family Care Benefits to our eligible shoreside employees that includes paid leave at 100% of an employee’s salary for maternity, paternity, and adoption leaves. Family planning assistance for fertility and surrogacy services and adoption support are also offered.
Montague helped build the business plan for the launch of Oceania Cruises in 2002, including oversight for the purchase of its initial three R-class vessels, was involved with the equity investment by Apollo Global Management, LLC and acquisition of Regent Seven Seas Cruises, and drove financing and delivery of Oceania Cruises’ newbuilds, Marina and Riviera. Mr.
Montague helped build the business plan for the launch of Oceania Cruises in 2002, including oversight for the purchase of its initial three R-class vessels, was involved with the equity investment by Apollo Global Management, LLC and acquisition of Regent Seven Seas Cruises, and drove financing and the delivery of Oceania Cruises’ newbuilds, Marina and Riviera. Mr.
Ashby held the position of Senior Director of Financial Reporting with PCI, where she started the Financial Reporting Department and was responsible for the preparation of annual financial statements, coordination of external audits and researching technical accounting issues. Before joining PCI, Ms. Ashby was a Senior Manager at the international public accounting firm of Deloitte.
Ashby held the position of Senior Director of Financial Reporting with PCI, where she started the Financial Reporting Department and was responsible for the preparation of annual financial statements, coordination of external audits and researching technical accounting issues. Before joining PCI, Ms. Ashby was a Senior Manager at the international public accounting firm, Deloitte.
Annex VI also requires stricter limitations on sulfur emissions within designated Emission Control Areas (“ECAs”), which include the Baltic Sea, the North Sea/English Channel, North American waters and the U.S. Caribbean Sea. Ships operating in these waters are required to use fuel with a sulfur content of no more than 0.1% or use approved alternative emission reduction methods.
Annex VI also requires stricter limitations on sulfur emissions within designated Emission Control Areas (“ECAs”), which include the Baltic Sea, the North Sea/English Channel, Mediterranean, North American waters and the U.S. Caribbean Sea. Ships operating in these waters are required to use fuel with a sulfur content of no more than 0.1% or use approved alternative emission reduction methods.
Our bridge and technical officers regularly undergo rigorous operations training such as leadership, navigation, stability, statutory and environmental regulatory compliance. To support our deck and engine officers while at sea, we have bridge and engine protocols and support documentation in place, dictating specific standard operating procedures.
Our bridge and technical officers regularly undergo operations training such as leadership, navigation, stability, statutory and environmental regulatory compliance. To support our deck and engine officers while at sea, we have bridge and engine protocols and support documentation in place, dictating specific standard operating procedures.
Oceania Cruises’ ticket prices include specialty dining, entertainment, Starlink Wi-Fi, laundry, gratuities and certain other amenities. Regent’s ticket prices typically include onboard amenities such as unlimited complimentary shore excursions, beverages including fine wines and liquors, entertainment, specialty dining, Starlink Wi-Fi, valet laundry, gratuities and more.
Oceania Cruises’ ticket prices include specialty dining, entertainment, Wi-Fi, laundry, gratuities and certain other amenities. Regent’s ticket prices typically include onboard amenities such as unlimited complimentary shore excursions, beverages including fine wines and liquors, entertainment, specialty dining, Wi-Fi, valet laundry, gratuities and more.
Our U.S.-source shipping income is considered effectively connected income if we have, or are considered to have, a fixed place of business in the United States involved in the earning of U.S.-source shipping income, and substantially all of our U.S.-source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States.
Our U.S.-source shipping income is considered effectively connected income if we have, or are considered to have, a fixed place of business in the U.S. involved in the earning of U.S.-source shipping income, and substantially all of our U.S.-source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the U.S.
The coverage for each of the hull and machinery policies is maintained with syndicates of insurance underwriters from the European and U.S. insurance markets. 15 Table of Contents In addition to the insurance coverage on the hull and machinery of our ships, we seek to maintain comprehensive insurance coverage and believe that our current coverage is at appropriate levels to protect against most of the accident-related risks involved in the conduct of our business.
The coverage for each of the hull and machinery policies is maintained with syndicates of insurance underwriters from the European and U.S. insurance markets. 12 Table of Contents In addition to the insurance coverage on the hull and machinery of our ships, we seek to maintain comprehensive insurance coverage and believe that our current coverage is at appropriate levels to protect against most of the accident-related risks involved in the conduct of our business.
It is possible, however, that the IRS’ interpretation of shipping income could differ from ours and that a much larger percentage of our income does not qualify (or will not qualify) as shipping income. Moreover, the exemption for shipping income is only available for years in which we will satisfy complex tests under Section 883.
It is possible, however, that the IRS’s interpretation of shipping income could differ from ours and that a much larger percentage of our income does not qualify (or will not qualify) as shipping income. Moreover, the exemption for shipping income is only available for years in which we will satisfy complex tests under Section 883.
The international, national, state and local laws, regulations, treaties and other legal requirements applicable to our operations change regularly, depending on the itineraries of our ships and the ports and countries visited. 16 Table of Contents Our ships are subject to inspection by the port regulatory authorities in the various countries that they visit.
The international, national, state and local laws, regulations, treaties and other 13 Table of Contents legal requirements applicable to our operations change regularly, depending on the itineraries of our ships and the ports and countries visited. Our ships are subject to inspection by the port regulatory authorities in the various countries that they visit.
In order for a Bermuda entity’s international shipping income to qualify for the exclusion, the entity must demonstrate that the strategic or commercial management of all ships concerned is effectively carried on from or within Bermuda. NCLH believes it met the necessary requirements to qualify for the international shipping income exclusion during 2024.
In order for a Bermuda entity’s international shipping income to qualify for the exclusion, the entity must demonstrate that the strategic or commercial management of all ships concerned is effectively carried on from or within Bermuda. NCLH believes it met the necessary requirements to qualify for the international shipping income exclusion during 2025.
Crew and Staff Best-in-class guest service levels are paramount in the markets in which we operate, where travelers have discerning tastes and high expectations for quality service. We have dedicated resources to ensure that our service offerings on all of our ships meet the demands of our guests.
Best-in-class guest service levels are paramount in the markets in which we operate, where travelers have discerning tastes and high expectations for quality service. We have dedicated resources to ensure that our service offerings on all of our ships meet the demands of our guests.
The NOx emissions limit for the Norwegian Sea ECA will apply to newly built ships for which the building contract was entered into on or after March 1, 2026, or, in the absence of a ship building contract, with keel lay dates on or after September 1, 2026 or delivery dates on or after March 1, 2030.
The NOx emissions limit for the Norwegian Sea ECA will apply to newly built ships for which the building contract will be entered into on or after March 1, 2026, or, in the absence of a ship building contract, with keel lay dates on or after September 1, 2026 or delivery dates on or after March 1, 2030.
For additional information regarding our sustainability initiatives, please visit our website at https://www.nclhltd.com/sustainability. ​ Highly Experienced Management Team ​ Our senior management team is comprised of executives with extensive experience in the cruise, travel, leisure and hospitality-related industries.
For additional information regarding our sustainability initiatives, please visit our website at https://www.nclhltd.com/sustainability. ​ Highly Experienced Management Team ​ Our senior management team is comprised of executives with extensive experience in the cruise, travel, leisure, consumer brand and hospitality-related industries.
We are committed to providing crew members with guidelines, resources, and activities for educational purposes and to guide them to achieve optimal wellness. Topics in this initiative address, for example, nutrition, physical activity, sleep and stress management and alcohol and tobacco awareness.
We are committed to providing crew members with guidelines, resources, and activities for educational purposes and to guide them to achieve optimal wellness. Topics in this initiative include, for example, nutrition, physical activity, sleep and stress management and alcohol and tobacco awareness.
Treasury Regulations require a foreign corporation and certain of its direct and indirect shareholders to satisfy detailed substantiation and reporting requirements. NCLH is incorporated in Bermuda, which is a qualified foreign country that grants an equivalent exemption, and NCLH meets the publicly-traded test because its ordinary shares were primarily and regularly traded on the New York Stock Exchange (“NYSE”).
Treasury Regulations require a foreign corporation and certain of its direct and indirect shareholders to satisfy detailed substantiation and reporting requirements. 19 Table of Contents NCLH is incorporated in Bermuda, which is a qualified foreign country that grants an equivalent exemption, and NCLH meets the publicly-traded test because its ordinary shares were primarily and regularly traded on the New York Stock Exchange (“NYSE”).
We refer you to “Item 1A—Risk Factors— Our failure or inability to recruit or retain qualified personnel or the loss of key personnel or employee relations issues may materially adversely affect our business, financial condition and results of operations” for more information regarding our relationships with union employees and our collective bargaining agreements that are currently in place.
We refer you to “Item 1A—Risk Factors— Our failure or 22 Table of Contents inability to recruit or retain qualified personnel or the loss of key personnel or employee relations issues may materially adversely affect our business, financial condition and results of operations” for more information regarding our relationships with union employees and our collective bargaining agreements that are currently in place.
Beginning in 2023, ships are now required to reduce carbon intensity by 5% from a 2019 baseline, with 2% incremental improvements each year thereafter until 2030. The enforcement mechanism for CII has not yet been defined, but the IMO plans to address this enforcement gap and make other modifications to the CII in 2025.
Beginning in 2023, ships are now required to reduce carbon intensity by 5% from a 2019 baseline, with 2% incremental improvements each year thereafter until 2030. The enforcement mechanism for CII has not yet been defined, but the IMO plans to address this enforcement gap and make other modifications to the CII in future sessions.
Our largest operating expenditures are for payroll and related (including our contract with a third party who provides certain crew services), fuel, airfare, food and 14 Table of Contents beverage, advertising and marketing and travel advisor services. Most of the supplies that we require are typically available from numerous sources at competitive prices.
Our largest operating expenditures are for payroll and related (including our contract with a third party who provides certain crew services), fuel, airfare, food and beverage, advertising and marketing and travel advisor services. Most of the supplies that we require are typically available from numerous sources at competitive prices.
Public Health Service have agreed on regulations for food, water and hygiene, aimed at proactively protecting the health of travelers and preventing illness transmission to U.S. ports. We continue to work directly with the CDC Maritime Unit as well as other health regulatory authorities, such as E.U.
Public Health 17 Table of Contents Service have agreed on regulations for food, water and hygiene, aimed at proactively protecting the health of travelers and preventing illness transmission to U.S. ports. We continue to work directly with the CDC Maritime Unit as well as other health regulatory authorities, such as E.U.
The Company also consistently reviews salary levels in order to remain competitive in recruiting and retaining talent for shoreside and shipboard employees. We believe our compensation programs for our shipboard team are competitive and for the majority of this team, negotiated with various unions and documented in collective bargaining agreements.
The Company also consistently reviews salary levels in order to remain competitive in recruiting and retaining talent for shoreside and shipboard employees. We believe our compensation programs for our shipboard team are competitive and for the majority of this team, and these compensation programs have been negotiated with various unions and documented in collective bargaining agreements.
We will, as soon as reasonably practicable after we electronically file or furnish our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8- 27 Table of Contents K, proxy statements and amendments to those reports, if applicable, make available such reports free of charge on our website.
We will, as soon as reasonably practicable after we electronically file or furnish our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and amendments to those reports, if applicable, make available such reports free of charge on our website.
She has an M.B.A. and B.B.A. with concentrations in accounting from the University of Miami and is a Certified Public Accountant in Florida. ​ 29 Table of Contents
She has an M.B.A. and B.B.A. with concentrations in accounting from the University of Miami and is a Certified Public Accountant in Florida. ​ ​ ​ 27 Table of Contents
Tax Matters We may be subject to state, local and non-U.S. income or non-income taxes in various jurisdictions, including those in which we transact business, own property or reside. We may be required to file tax returns in some or all of those jurisdictions.
Tax Matters We may be subject to state, local and non-U.S. income or non-income taxes in various jurisdictions, including those in which we transact business, own property or reside. We may be required to file tax returns in some or all of those 21 Table of Contents jurisdictions.
Prices vary depending on the particular cruise itinerary, voyage length, stateroom category selected, added inclusions and the time of year that the sailing takes place. ​ 13 Table of Contents Onboard and Other Revenue All three brands generate onboard and other revenue for additional products and services which are not included in the cruise fare, including casino operations, certain food and beverage, shore excursions, gift shop purchases, spa services, communication services and other similar items.
Prices vary depending on the particular cruise itinerary, voyage length, stateroom category selected, added inclusions and the time of year that the sailing takes place. ​ Onboard and Other Revenue All three brands generate onboard and other revenue for additional products and services which are not included in the cruise fare, including casino operations, certain food and beverages, shore excursions, gift shop purchases, spa services, communication services and other similar items.
The International Convention for the Prevention of Pollution from Ships (“MARPOL”) is the main international convention covering prevention of pollution of the marine environment by ships from operational or accidental causes, and currently contains six annexes, four of which are applicable to cruise ships.
The International Convention for the Prevention of Pollution from Ships (“MARPOL”) is the main international convention covering prevention of pollution of the marine environment by 14 Table of Contents ships from operational or accidental causes, and currently contains six annexes, four of which are applicable to cruise ships.
During the fourth quarter of 2023, in response to the Organisation for Economic Co-operation and Development (“OECD”)’s BEPS 2.0 Pillar 2 global tax reform, the Company restructured its organizational structure by realigning many of its operations across its three different brands into a single jurisdiction, Bermuda.
In late 2023, in response to the Organisation for Economic Co-operation and Development (“OECD”)’s BEPS 2.0 Pillar 2 global tax reform, the Company restructured its organizational structure by realigning many of its operations across its three different brands into a single jurisdiction, Bermuda.
The new rules began to apply on January 1, 2025, and there are financial penalties for non-compliance. The IMO implemented a variety of measures to support the targets of the initial 2018 GHG strategy.
The new rules began to apply on January 1, 2025, and there are financial penalties for non-compliance. 16 Table of Contents The IMO implemented a variety of measures to support the targets of the initial 2018 GHG strategy.
Ashby 53 Senior Vice President and Chief Accounting Officer ​ All the executive officers listed above hold their offices at the pleasure of our Board of Directors, subject to rights under any applicable employment agreements. There are no family relationships between or among any directors and executive officers.
Ashby 54 Senior Vice President and Chief Accounting Officer ​ All the executive officers listed above hold their offices at the pleasure of our Board of Directors, subject to rights under any applicable employment agreements. There are no family relationships between or among any directors and executive officers. John W.
If such entities cannot demonstrate compliance with these requirements, we may be liable to pay penalties and fines in the applicable jurisdictions and/or may take the decision to re-domicile such entities to different jurisdictions. We took what we believe were the necessary steps to meet Bermuda’s economic substance requirements during 2024.
If such entities cannot demonstrate compliance with these requirements, we may be liable to pay penalties and fines in the applicable jurisdictions and/or may take the decision to re-domicile such entities to different jurisdictions. We continued to take what we believe were the necessary steps to meet Bermuda’s economic substance requirements during 2025.
Climate-related risks, greenhouse gas information and details of our climate action strategy are disclosed in our annual Sail & Sustain report and annual submission to CDP (which does not constitute a part of, and shall not be deemed incorporated by reference into, this Annual Report), which can be found on our website.
Climate-related risks, greenhouse gas information and details of our nature and climate action strategy are disclosed in our annual Sail & Sustain report (which does not constitute a part of, and shall not be deemed incorporated by reference into, this Annual Report), which can be found on our website.
Regulatory Matters Registration of Our Ships Twenty-one of the ships that we currently operate are registered in The Bahamas. One of our ships, Pride of America, is a U.S.-flagged ship. Ten of our ships are registered in the Marshall Islands.
Regulatory Matters Registration of Our Ships Twenty-two of the ships that we currently operate are registered in The Bahamas. One of our ships, Pride of America, is a U.S.-flagged ship. Eleven of our ships are registered in the Marshall Islands.
Our cruise benefit programs were further enhanced for team member’s friends and family across our brands. 25 Table of Contents We continue to offer the NCLH Wellness at Sea program to all shipboard team members, creating a wellness-conscious work environment on the vessels.
Our cruise benefit programs were further enhanced for team member’s friends and family across our brands. We continue to offer the NCLH Wellness at Sea program to all shipboard team members, creating a wellness-conscious work environment on the vessels.
Other United States Taxation U.S. Treasury Regulations list several items of income which are not considered to be incidental to the international operation of ships and, to the extent derived from U.S. sources, are subject to U.S. federal income taxes under the Net Tax Regime discussed above.
Treasury Regulations list several items of income which are not considered to be incidental to the international operation of ships and, to the extent derived from U.S. sources, are subject to U.S. federal income taxes under the Net Tax Regime discussed above.
The NOx emissions limit for the Canadian Arctic ECA will apply to newly built ships that are at the beginning stage of construction on or after January 1, 2025.
The NOx emissions limit for the Canadian Arctic ECA applies to newly built ships that are at the beginning stage of construction on or after January 1, 2025.
From September 2008 to November 2014, he served as Vice President, Corporate and Capital Planning, and was an instrumental figure in the completion of NCLH’s IPO in 2013 and the acquisition of PCI in 2014. From January 2007 to August 2008, he served as Director, Corporate and Capital Planning.
From September 2008 to November 2014, he served as Vice President, Corporate and Capital Planning and was an instrumental figure in the completion of NCLH’s initial public offering in 2013 and the acquisition of PCI in 2014. From January 2007 to August 2008, he served as Director, Corporate and Capital Planning.
The Convention is designed to regulate the treatment and discharge of ballast water to avoid the transfer of marine species to new, different, 17 Table of Contents or potentially unsuitable environments. Applicable vessels sailing in specific itineraries have also been upgraded with ballast water treatment systems to further prevent the spread of invasive species.
The Convention is designed to regulate the treatment and discharge of ballast water to avoid the transfer of marine species to new, different, or potentially unsuitable environments. All vessels sailing in specific itineraries have also been upgraded with ballast water treatment systems to further prevent the spread of invasive species.
For information regarding risks associated with our compliance with legal and regulatory requirements, see “Part I Item 1A-Risk Factors” in this Annual Report, including the risk factor titled “We are subject to complex laws and regulations, including environmental, health and safety, labor, data privacy and protection and maritime laws and regulations, which 21 Table of Contents could adversely affect our operations and certain recently introduced laws and regulations and future changes in laws and regulations could lead to increased costs and/or decreased revenue.” Taxation U.S.
For information regarding risks associated with our compliance with legal and regulatory requirements, see “Item 1A—Risk Factors” in this Annual Report, including the risk factor titled “We are subject to complex laws and regulations, including environmental, health and safety, labor, data privacy and protection and maritime laws and regulations, which could adversely affect our operations and certain recently introduced laws and regulations and future changes in laws and regulations could lead to increased costs and/or decreased revenue.” Taxation U.S.
ECAs have also been established to limit emissions of oxides of nitrogen (“NOx”) from newly built ships with keel lay dates after January 1, 2016. Under MARPOL Annex VI Regulation 14, the Mediterranean Sea will become an ECA with new limits on SOx taking effect on May 1, 2025.
ECAs have also been established to limit emissions of oxides of nitrogen (“NOx”) from newly built ships with keel lay dates after January 1, 2016. Under MARPOL Annex VI Regulation 14, the Mediterranean Sea became an ECA with new limits on SOx that took effect on May 1, 2025.
We provide a mentorship program where even our most senior leaders actively participate. Succession planning is part of our culture. We have a year-round focus on providing team members with opportunities to develop their leadership skills and add to our bench of talent through various training initiatives.
We provide a mentorship program in which even our most senior leaders actively participate. Succession planning is part of our culture. We have a year-round focus on providing 23 Table of Contents team members with opportunities to develop their leadership skills and add to our bench of talent through various training initiatives.
The requirements are being phased in from 2024 to 2026. Covered entities are required to procure and surrender allowances equivalent to 40% of their verified carbon emissions from 2024, with the amount increasing to 70% of carbon emissions from 2025 and 100% of GHG emissions from 2026, with allowances to be surrendered by September in the following year.
Covered entities were required to procure and surrender allowances equivalent to 40% of their verified carbon emissions from 2024, with the amount increasing to 70% of carbon emissions from 2025 and 100% of GHG emissions from 2026, with allowances to be surrendered by September in the following year.
Among other initiatives, we have implemented rigorous onboard training programs, with a focus on career development. We believe that our dedication to anticipating and meeting our guests’ every need differentiates our operations and fosters close relationships between our guests and crew, helping to build customer loyalty.
Among other initiatives, we have implemented rigorous onboard training programs, with a focus on career development. We believe that our dedication to anticipating and meeting our guests’ every need differentiates our operations and fosters close relationships between our guests and crew, helping to build customer loyalty. Our captains and chief engineers are experienced seafarers.
Although the Government of Bermuda has released limited guidance 23 Table of Contents with respect to specific provisions of the Bermuda Act, it is anticipated that further administrative guidance as well as regulatory guidance will be released over the course of the 2025 calendar year and beyond.
Although the Government of Bermuda has released limited guidance with respect to specific provisions of the Bermuda Act, as well as regulatory guidance, it is anticipated that further administrative guidance as well as regulatory guidance will be released over the course of the 2026 calendar year and beyond.
In January 2013, NCLH completed its IPO and the ordinary shares of NCLC were exchanged for the ordinary shares of NCLH, and NCLH became the owner of 100% of the ordinary shares and parent company of NCLC. In November 2014, we completed the acquisition of PCI.
In January 2013, NCLH completed its initial public offering and the ordinary shares of NCLC were exchanged for the ordinary shares of NCLH, and NCLH became the owner of 100% of the ordinary shares and parent company of NCLC. In November 2014, we completed the acquisition of PCI.
Kempa has served as Executive Vice President and Chief Financial Officer since August 2018. Prior to that, he served as Interim Chief Financial Officer from March 2018 to August 2018 and as NCLH’s Senior Vice President, Finance, from November 2014 to August 2018.
Prior to that, he served as Interim Chief Financial Officer from March 2018 to August 2018 and as NCLH’s Senior Vice President, Finance, from November 2014 to August 2018.
Farkas joined the Company in January 2004, he has held the positions of Secretary from 2010 to 2013, Senior Vice President and General Counsel from 2008 through 2018, Vice President and Assistant General Counsel from 2005 to 2008, and Assistant General Counsel from 2004 to 2005 and was instrumental in the Company’s IPO and the acquisition of PCI. Mr.
Farkas joined the Company in January 2004, he has held the positions of Secretary from 2010 to 2013, Senior Vice President and General Counsel from 2008 through 2018, Vice President and Assistant General Counsel from 2005 to 2008, and Assistant General Counsel from 2004 to 2005 and was instrumental in NCLH’s initial public offering and the acquisition of PCI. Mr.
In 2024, following feedback from employees, we announced the increase of our 401(k) company match cap for 2025. Our benefits vary by location and are designed to meet or exceed local requirements and to be competitive in the marketplace.
In 2025, following feedback from employees, we announced a further increase to our 401(k) company match for 2026. Our benefits vary by location and are designed to meet or exceed local requirements and to be competitive in the marketplace.
Trademarks and Trade Names Under the Norwegian brand, we own a number of registered trademarks relating to, among other things, the names “NORWEGIAN CRUISE LINE” and “FEEL FREE,” the names of our ships (except where trademark applications for these have been filed and are pending), incentive programs and specialty services rendered on our ships and specialty accommodations such as “THE HAVEN BY NORWEGIAN.” We believe that these trademarks are widely recognized throughout North America, Europe and other areas of the world and have considerable value.
Trademarks and Trade Names Under the Norwegian brand, we own a number of registered trademarks relating to, among other things, the names “NORWEGIAN CRUISE LINE,” “FEEL FREE” and “IT’S DIFFERENT OUT HERE” (the trademark application for this mark has been filed and is pending), the names of our ships (except where trademark applications for these have been filed and are pending), incentive programs and specialty services rendered on our ships and specialty accommodations such as “THE HAVEN BY NORWEGIAN.” We believe that these trademarks are widely recognized throughout North America, Europe and other areas of the world and have considerable value.
As of December 31, 2024, we have in place approximately £65.1 million of security guarantees for our brands as well as a consumer protection policy covering up to £141.1 million. The Company has provided approximately $1.4 million in cash to secure all the financial security guarantees required. Compliance with these regulations has had an impact on our financial condition.
As of December 31, 2025, we have in place approximately £72.2 million of security guarantees for our brands, as well as a consumer protection policy covering up to £143.8 million. The Company has provided approximately $1.0 million in cash to secure all the financial security guarantees required. Compliance with these regulations has had an impact on our financial condition.
Exceptional team members continue to be recognized by a robust annual Award of Excellence recognition program which acknowledges and rewards individual team members and teams for their demonstration of Company values. In 2024, the Award of Excellence winners were celebrated by the NCLH President & CEO and senior leadership team onboard Regent Seven Seas Mariner.
Exceptional team members continue to be recognized by a robust annual Award of Excellence recognition program, which acknowledges and rewards individual team members and teams for their demonstration of Company values. The 2025 Award of Excellence winners were celebrated by the NCLH President & CEO and senior leadership team onboard Oceania Allura.
MLC 2006 includes a broad range of requirements, such as a broader definition of a seafarer, minimum age of seafarers, medical certificates, recruitment practices, training, repatriation, food, recreational facilities, health and welfare, hours of work and rest, accommodations, wages and entitlements. MLC 2006 added requirements not previously in effect, in the areas of occupational safety and health.
MLC 2006 includes a broad range of requirements, such as a broader definition of a seafarer, minimum age of seafarers, medical certificates, recruitment practices, training, repatriation, food, recreational facilities, health and welfare, hours of work and rest, accommodations, wages and entitlements.
Dry-docks are typically scheduled in spring or autumn and depend on shipyard availability. We typically take this opportunity to upgrade the vessels in all areas of both guest-facing services and innovative compliance technology. Suppliers Our largest capital expenditures are for ship construction and acquisition.
Dry-docks are typically scheduled in spring or autumn and depend on shipyard availability. We typically take this opportunity to upgrade the vessels in all areas of both guest-facing services and innovative compliance technology.
As of January 1, 2024, the E.U. MRV regulation is requiring carbon dioxide, methane, and nitrous oxide emissions to be reported. As part of its Fit for 55 package, the E.U. is in the process of adopting several rules aimed at reducing GHG emissions.
Since January 1, 2024, the E.U. MRV regulation has required carbon dioxide, methane, and nitrous oxide emissions to be reported. As part of its Fit for 55 package, the E.U. has adopted several rules aimed at reducing GHG emissions.
For the Regent Seven Seas Cruises brand, we have an order for two Prestige Class Ships, each at approximately 77,000 Gross Tons and 850 Berths, with currently scheduled delivery dates in 2026 and 2029.
For the Regent Seven Seas Cruises brand, we have an order for four Prestige Class Ships, each at approximately 77,000 Gross Tons and 822 Berths, with currently scheduled delivery dates from 2026 through 2036.
He previously served as President and Chief Executive Officer of the Regent brand from September 2016 through December 2022. In this role, he was responsible for financial and day-to-day operations of the Regent brand.
He was a Special Advisor to the Company from January 2023 until February 2025. He previously served as President and Chief Executive Officer of the Regent brand from September 2016 through December 2022. In this role, he was responsible for financial and day-to-day operations of the Regent brand.
For ships on order, excluding the two ships on order for Oceania Cruises that we have the option to cancel and the four additional ships on order for Norwegian Cruise Line with currently scheduled delivery from 2030 to 2036, we have obtained export credit financing which is expected to fund approximately 80% of the contract price of each ship as well as related financing premiums, subject to certain conditions.
For ships with effective orders, excluding the two Sonata Class Ships on order for Oceania Cruises with currently scheduled delivery in 2032 and 2035 and the two additional ships on order for Norwegian Cruise Line with currently scheduled delivery in 2034 and 2036, we have obtained export credit financing, which is expected to fund approximately 80% of the contract price of each ship, as well as related financing premiums, subject to certain conditions.
We also have orders for three new classes of ships: four Oceania Cruises ships with deliveries currently scheduled from 2027 through 2031, two Prestige Class Ships with deliveries currently scheduled in 2026 and 2029 and four Norwegian Cruise Line ships with deliveries currently scheduled from 2030 through 2036.
We also have orders for three new classes of ships: five Sonata Class Ships with deliveries currently scheduled from 2027 through 2037, four Prestige Class Ships with deliveries currently scheduled from 2026 through 2036 and five Norwegian Cruise Line ships with deliveries currently scheduled from 2030 through 2037.
All non-ECA waters have a 0.5% fuel sulfur limit. 18 Table of Contents The European Commission has also implemented regulations aimed at reducing GHG emissions from maritime shipping through a Monitoring, Reporting and Verification (“MRV”) regulation, which requires ships over 5,000 Gross Tons to monitor and report carbon emissions on all voyages to, from and between E.U. ports as well as ports in the European Economic Area (“EEA”).
The European Commission has also implemented regulations aimed at reducing greenhouse gas (“GHG”) emissions from maritime shipping through a Monitoring, Reporting and Verification (“MRV”) regulation, which requires ships over 5,000 Gross Tons to monitor and report carbon emissions on all voyages to, from and between E.U. ports as well as ports in the European Economic Area (“EEA”).
Two of the mechanisms that are being used to achieve emissions reductions are the Emissions Trading System (“ETS”) and the FuelEU Maritime Initiative. We expect to have increased costs associated with the Fit for 55 regulations but are not able to quantify the impact yet as the impact will depend on future market pricing.
Two of the mechanisms that are being used to achieve emissions reductions are the Emissions Trading System (“ETS”) and the FuelEU Maritime Initiative. We are experiencing increased costs associated with the Fit for 55 regulations and the full impact will depend in part on future market pricing.
Through the shipboard Vacation Hero Awards program, shipboard supervisors and management recognize select shipboard team members that have proven to be outstanding in selected categories. This award program is designed to provide recognition and promote total guest satisfaction by encouraging and rewarding team members for demonstrating excellence in service, teamwork, attitude, and leadership.
Through the shipboard service delivery recognition programs across all brands, shipboard supervisors and management recognize select shipboard team members that have proven to be outstanding in selected categories. These award programs are designed to provide recognition and promote total guest satisfaction by encouraging and rewarding team members for demonstrating excellence in service, teamwork, attitude, and leadership.
We have made, and will continue to make, capital and other expenditures to comply with changing environmental laws, regulations and treaties. Any fines or other sanctions for violation or failure to comply with environmental requirements or any expenditures required to comply with environmental requirements could have a material adverse effect on our business, operations, cash flow or financial condition.
Any fines or other sanctions for violation or failure to comply with environmental requirements or any expenditures required to comply with environmental requirements could have a material adverse effect on our business, operations, cash flow or financial condition.
We have also continued the Kloster Visionary Award which honors the Company’s founder, Knut Kloster, by recognizing a shipboard or shoreside team member whose spirit of innovation follows in the footsteps of this visionary. In 2024, we also recognized the first Kloster Visionary Team, which recognizes exceptional innovative teamwork.
We have also continued the Kloster Visionary Award, which honors the Company’s founder, Knut Kloster, by recognizing a shipboard or shoreside team member, in addition to an honorary team, whose spirit of innovation follows in the footsteps of this visionary.
All brands also offer a selection of shore excursions at each port of call as well as air transportation and hotel packages for stays before or after a voyage. As of December 31, 2024, we had 32 ships with approximately 66,500 Berths. The Company expects to add 13 additional ships to our fleet from 2025 through 2036.
All brands also offer a selection of shore excursions at each port of call, as well as air transportation and hotel packages for stays before or after a voyage. As of December 31, 2025, we had 34 ships with approximately 71,400 Berths. We expect to add 17 additional ships to our fleet from 2026 through 2037.
We also introduced a new free women’s menopause support benefit to our team members. In 2024, we opened a new onsite clinic at our corporate headquarters to make healthcare more accessible and convenient for our team members, offering a range of services from physical exams, immunizations, basic diagnostic testing, and low-cost prescription medication.
In addition, we provide an onsite clinic at our corporate headquarters to make healthcare more accessible and convenient for our team members, offering a range of services from physical exams, immunizations, basic diagnostic testing, and low-cost prescription medication.
Kempa served as the Assistant Controller for International Voyager Media, a travel portfolio company. Mr. Kempa holds a Bachelor’s degree in Accounting from Barry University. David Herrera has served as President of Norwegian Cruise Line since April 2023.
Kempa served as the Assistant Controller for International Voyager Media, a travel portfolio company. Mr. Kempa holds a Bachelor’s degree in Accounting from Barry University. 25 Table of Contents Marc Kazlauskas has been the President of Norwegian Cruise Line since January 2026.
If we do not have a fixed place of business in the U.S. or substantially all of our income is not derived from regularly scheduled transportation, the income will generally not be considered to be effectively connected income. In that case, we would be subject to a special 4% tax on our gross U.S.-source shipping income (the “4% Tax Regime”).
If we do not have a fixed place of business in the U.S. or substantially all of our income is not derived from regularly scheduled transportation, the income will generally not be considered to be effectively connected income.
MLC 2006 became effective in certain countries commencing August 2013. The Standard of Training Certification and Watch Keeping for Seafarers, as amended (“STCW”), establishes minimum standards relating to training, certification and watch-keeping for our seafarers.
MLC 2006 added requirements not previously in effect, in the areas of occupational safety and health. 18 Table of Contents MLC 2006 became effective in certain countries commencing August 2013. The Standard of Training Certification and Watch Keeping for Seafarers, as amended (“STCW”), establishes minimum standards relating to training, certification and watch-keeping for our seafarers.
The Act to Prevent Pollution from Ships, which implements certain elements of MARPOL in the U.S., provides for potentially severe civil and criminal penalties related to ship-generated pollution for incidents in U.S. waters within three nautical miles of land and, in some cases, within the 200-nautical mile Exclusive Economic Zone (“EEZ”).
The Act to Prevent Pollution from Ships, which implements certain elements of MARPOL in the U.S., provides for potentially severe civil and criminal penalties related to ship-generated pollution for incidents in U.S. waters within three nautical miles of land and, in some cases, within the 200-nautical mile Exclusive Economic Zone (“EEZ”). 15 Table of Contents The Oil Pollution Act of 1990 (“OPA 90”) provides for strict liability for water pollution caused by the discharge of oil in the 200-nautical mile EEZ of the U.S., subject to defined monetary limits.
The Sail & Sustain program is centered around five pillars: Reducing Environmental Impact, Sailing Safely, Empowering People, Strengthening Our Communities and Operating with Integrity and Accountability.
Our global sustainability program, Sail & Sustain, is centered around five pillars: Caring for Nature, Sailing Safely, Empowering People, Strengthening Our Communities and Operating with Integrity and Accountability.
Each such certificate is granted for a five-year period and is subject to periodic verification. 20 Table of Contents The SOLAS requirements are amended and extended by the IMO from time to time.
All of our ships are certified as to compliance with the ISM Code. Each such certificate is granted for a five-year period and is subject to periodic verification. ​ The SOLAS requirements are amended and extended by the IMO from time to time.
We believe these new ships will allow us to continue expanding the reach of our brands, position us for accelerated growth and provide an optimized return on invested capital.
These and other impacts could result in additional delays in ship deliveries in the future, which may be prolonged. We believe these new ships will allow us to continue expanding the reach of our brands, position us for accelerated growth and provide an optimized return on invested capital.
We believe this commitment ultimately results in significant value to our Company and its shareholders. Team Members As of December 31, 2024, we employed approximately 5,200 full-time employees worldwide in our shoreside operations and approximately 36,500 shipboard employees. Regent and Oceania Cruises’ ships use a third party to provide additional hotel and restaurant staffing onboard.
Team Members As of December 31, 2025, we employed approximately 5,300 full-time employees worldwide in our shoreside operations and approximately 39,200 shipboard employees. Regent’s and Oceania Cruises’ ships use a third party to provide additional hotel and restaurant staffing onboard.
Retention and Engagement We have a history of strong retention rates across our shoreside and shipboard teams which we attribute to our culture that allows our team members to thrive and achieve their career goals. For the full year of 2024, the Company experienced its highest shoreside voluntary retention rate as compared to the prior four years.
Retention and Engagement We have a history of strong retention rates across our shoreside and shipboard teams, which we attribute to our culture that allows our team members to thrive and achieve their career goals. Consistent with recent years, the Company continues to experience a high shoreside voluntary retention rate.
Coast Guard for each ship. Our continued OPA 90 certification signifies our ability to meet the requirements for related OPA 90 liability in the event of an oil spill or release of a hazardous substance.
OPA 90 requires that in order for us to operate in U.S. waters, we must have Certificates of Financial Responsibility from the U.S. Coast Guard for each ship. Our continued OPA 90 certification signifies our ability to meet the requirements for related OPA 90 liability in the event of an oil spill or release of a hazardous substance.
In 2024, we enhanced our learning and development program, by offering all shoreside team members access to premiere online learning for a wide range of personal development courses at their own pace.
As part of our learning and development programs, all shoreside team members are offered access to premiere online learning for a wide range of personal development courses at their own pace.
For the Norwegian brand, we have four Prima Class Ships on order with currently scheduled delivery dates from 2025 through 2028. For Oceania Cruises, we have one Allura Class Ship on order for delivery in 2025.
For the Norwegian brand, we have three Prima Class Ships on order with currently scheduled delivery dates from 2026 through 2028.
Such inspections include verification of compliance with the maritime safety, security, environmental, customs, immigration, health and labor regulations applicable to each port as well as with international requirements.
Such inspections include verification of compliance with the maritime safety, security, environmental, customs, immigration, health and labor regulations applicable to each port as well as with international requirements. Ship Maintenance and Logistics Sophisticated and efficient maintenance and operations systems support the technical capabilities and modern look of our fleet.
We maintain strong relationships with travel partners, have sophisticated revenue management strategies, and focus on operational excellence to drive shareholder value. ​ Reduce leverage and optimize our balance sheet In 2024 and 2025, we continued to take actions to improve our capital structure as part of our long-term financial strategy. ● In September 2024, NCLC issued $315.0 million aggregate principal amount of 6.250% senior unsecured notes due 2030.
We maintain strong relationships with travel partners, have sophisticated revenue management strategies, and focus on operational excellence to drive shareholder value. ​ 10 Table of Contents Optimize Our Balance Sheet In 2025, we continued to take actions to improve our capital structure as part of our long-term financial strategy.
The reduction required will become progressively stricter over time starting with a 2% intensity reduction in 2025 to as much as 80% intensity reduction by 2050. Other key components of the regulation include requirements for connecting to onshore power grids in Trans-European Transport Network ports by 2030 as well as targets for the use of renewable fuels of non-biological origin.
Other key components of the regulation include requirements for connecting to onshore power grids in Trans-European Transport Network Core ports by 2030, as well as targets for the use of renewable fuels of non-biological origin.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeNegative perceptions about the cruise industry, carbon intensity, sustainability or otherwise may make it increasingly difficult to retain and hire additional crew members to staff our fleet and to recruit new employees generally. 37 Table of Contents ​ Impacts related to climate change may adversely affect our business, financial condition and results of operations. ​ There has been an increased focus on GHG and other emissions from global regulators, consumers and other stakeholders.
Biggest changeThe loss of services of one or more of these individuals could materially adversely affect us. ​ Negative perceptions about the cruise industry, carbon intensity, sustainability or otherwise may make it increasingly difficult to retain and hire additional crew members to staff our fleet and to recruit new employees generally. ​ Shareholder activism could adversely affect our business, financial condition, results of operations and share price. ​ Actions by activist shareholders that target our company and our business may not align with our business strategies or the best interests of all of our shareholders.
If we expect to not be in compliance, we would expect to seek waivers from the lenders under these facilities or renegotiate these facilities prior to any covenant violation. ​ Any covenant waiver or renegotiation of any of our debt facilities has led, and may in the future lead, to increased costs, increased interest rates, additional restrictive covenants and other available lender protections that would be applicable to us under these debt facilities, and such increased costs, restrictions and modifications may vary among debt facilities.
If we expect not to be in compliance, we would expect to seek waivers from the lenders under these facilities or renegotiate these facilities prior to any covenant violation. ​ Any covenant waiver or renegotiation of any of our debt facilities has led, and may in the future lead, to increased costs, increased interest rates, additional restrictive covenants and other available lender protections that would be applicable to us under these debt facilities, and such increased costs, restrictions and modifications may vary among debt facilities.
Under the FuelEU Maritime regulation, ships that have a higher GHG intensity than the requirement must pay a penalty. The penalty is progressively increased if the ship has a compliance deficit for two or more consecutive reporting periods.
Under the FuelEU Maritime regulation, ships that have a higher GHG intensity than the requirement must pay a penalty that is progressively increased if the ship has a compliance deficit for two or more consecutive reporting periods.
We expect to make significant investments in technology, equipment and alternative fuels in order to achieve any climate-related targets we may set and to comply with climate-related regulations, and our profitability and operations may be adversely impacted by such investments. These investments may have costs beyond our expectations and may not ultimately benefit us as expected.
We expect to make significant investments in technology, equipment and alternative fuels in order to comply with climate-related regulations and achieve any climate-related targets we may set, and our profitability and operations may be adversely impacted by such investments. These investments may have costs beyond our expectations and may not ultimately benefit us as expected.
Such events could lead to an adverse impact on our financial condition or results of operations. ​ As a result of any ship-related or other incidents, litigation claims, enforcement actions and regulatory actions and investigations, including, but not limited to, those arising from personal injury, loss of life, loss of or damage to personal property, business interruption losses or environmental damage to any affected coastal waters and the surrounding area, may be asserted or brought against various parties, including us and/or our cruise brands.
Such events could lead to an adverse impact on our financial condition or results of operations. ​ As a result of any ship-related or other incidents, litigation claims, enforcement actions and regulatory actions and investigations, including, but not limited to, those arising from personal injury, loss of life, loss of or damage to personal property, business interruption losses or environmental damage to any affected coastal waters and the surrounding area, may be asserted or brought against various parties, including us and/or our brands.
Additionally, if a shipyard is unable to perform under the related ship construction contract, any associated foreign currency hedges that were entered into to manage the currency risk would need to be terminated. ​ Our expansion into new markets and investments in new markets and land-based destination projects may not be successful. ​ We believe there remains significant opportunity to expand our passenger sourcing into major markets in the future, such as Europe and Australia, as well as into emerging markets and to expand our itineraries in new markets.
Additionally, if a shipyard is unable to perform under the related ship construction contract, any associated foreign currency hedges that were entered into to manage the currency risk would need to be terminated. ​ Our expansion into new markets and investments in new markets, businesses and land-based destination projects may not be successful. ​ We believe there remains significant opportunity to expand our passenger sourcing into major markets in the future, such as Europe and Australia, as well as into emerging markets and to expand our itineraries in new markets.
As a result, the failure to obtain the covenant waivers or renegotiate our facilities as described above would have a material adverse effect on us and our ability to service our debt obligations. ​ We anticipate that we will need additional financing in the future, which may not be available on favorable terms, or at all, and our outstanding exchangeable notes and any future financing may be dilutive to existing shareholders. ​ We anticipate that we will need additional equity and/or debt financing in the future to refinance our existing debt and to fund our newbuild program.
As a result, the failure to obtain the covenant waivers or renegotiate or repay our facilities as described above would have a material adverse effect on us and our ability to service our debt obligations. ​ We anticipate that we will need additional financing in the future, which may not be available on favorable terms, or at all, and our outstanding exchangeable notes and any future financing may be dilutive to existing shareholders. ​ We anticipate that we will need additional equity and/or debt financing in the future to refinance our existing debt and to fund our newbuild program.
The ability to raise additional financing depends on numerous factors that are outside of our control, including general economic and market conditions, the health of financial institutions, our credit ratings and investors’ and lenders’ assessments of our prospects and the prospects of the cruise industry in general. ​ 30 Table of Contents If we raise additional funds by issuing debt, we may be subject to limitations on our operations due to restrictive covenants, which may be more restrictive than the covenants in our existing debt agreements, and we may be required to further encumber our assets.
The ability to raise additional financing depends on numerous factors that are outside of our control, including general economic and market conditions, the health of financial institutions, our credit ratings and investors’ and lenders’ assessments of our prospects and the prospects of the cruise industry in general. ​ If we raise additional funds by issuing debt, we may be subject to limitations on our operations due to restrictive covenants, which may be more restrictive than the covenants in our existing debt agreements, and we may be required to 28 Table of Contents further encumber our assets.
This affects, among other things, the circumstances under which transactions involving an interested director are voidable, whether an interested director can be held accountable for any benefit realized in a transaction with our Company, what approvals are required for business combinations by our Company with a large shareholder or a wholly-owned subsidiary, what rights you may have as a shareholder to enforce specified provisions of the Companies Act or NCLH’s bye-laws, and the circumstances under which we may indemnify our directors and officers. ​ NCLH does not expect to pay any cash dividends for the foreseeable future. ​ NCLH does not currently pay dividends to its shareholders, and NCLH’s Board of Directors may never declare a dividend.
This affects, among other things, the circumstances under which transactions involving an interested director are voidable, whether an interested director can be held accountable for any benefit realized in a transaction with our Company, what approvals are required for business combinations by our Company with a large shareholder or a wholly-owned subsidiary, what rights you may have as a shareholder to enforce specified provisions of the Companies Act or NCLH’s bye-laws, and the circumstances under which we may indemnify our directors and officers. ​ 41 Table of Contents NCLH does not expect to pay any cash dividends for the foreseeable future. ​ NCLH does not currently pay dividends to its shareholders, and NCLH’s Board of Directors may never declare a dividend.
In connection with the forward-looking statements that appear in this Annual Report, you should also carefully review the cautionary statement referred to under “Cautionary Statement Concerning Forward–Looking Statements.” ​ Debt/Liquidity Related Risk Factors ​ If our results of operations and financial performance do not recover as planned, we may not be in compliance with maintenance covenants in certain of our debt facilities. ​ Certain of our debt facilities include maintenance and financial covenants.
In connection with the forward-looking statements that appear in this Annual Report, you should also carefully review the cautionary statement referred to under “Cautionary Statement Concerning Forward–Looking Statements.” ​ Debt/Liquidity Related Risk Factors ​ If our results of operations and financial performance do not perform as planned, we may not be in compliance with maintenance covenants in certain of our debt facilities. ​ Certain of our debt facilities include maintenance and financial covenants.
The regulatory framework for data privacy and protection is uncertain for the foreseeable future, and it is possible that legal and regulatory obligations may continue to increase and may be interpreted and applied in a manner that is inconsistent or possibly conflicting from one jurisdiction to another. ​ In the event of a data security breach of our systems and/or third-party systems or a cybersecurity incident, we may incur costs associated with the following: response, notification, forensics, regulatory investigations, public relations, consultants, credit identity monitoring, credit freezes, fraud alert, credit identity restoration, credit card cancellation, 35 Table of Contents credit card reissuance or replacement, data restoration, regulatory fines and penalties, vendor fines and penalties, legal fees, damages and settlements.
The regulatory framework for data privacy and protection is uncertain for the foreseeable future, and it is possible that legal and regulatory obligations may continue to increase and may be interpreted and applied in a manner that is inconsistent or possibly conflicting from one jurisdiction to another. ​ In the event of a data security breach of our systems and/or third-party systems or a cybersecurity incident, we may incur costs associated with the following: response, notification, forensics, regulatory investigations, public relations, consultants, credit identity monitoring, credit freezes, fraud alert, credit identity restoration, credit card cancellation, credit card reissuance or replacement, data restoration, regulatory fines and penalties, vendor fines and penalties, legal fees, damages and settlements.
In order for a Bermuda entity’s international shipping income to qualify for the exclusion, the entity must demonstrate that the strategic or commercial management of all ships concerned is effectively carried on from or within Bermuda. We believe we have met the necessary requirements to qualify for the international shipping income exclusion during 2024, but we cannot provide any assurances.
In order for a Bermuda entity’s international shipping income to qualify for the exclusion, the entity must demonstrate that the strategic or commercial management of all ships concerned is effectively carried on from or within Bermuda. We believe we have met the necessary requirements to qualify for the international shipping income exclusion during 2025, but we cannot provide any assurances.
Reductions of the cash flows used in the impairment analyses may result in the recording of an impairment charge to a reporting unit’s trade name or goodwill. For example, we recognized significant impairment losses during 2020 related to the COVID-19 pandemic. We believe that we have made reasonable estimates and judgments.
Reductions of the cash flows used in the impairment analyses may result in the recording of an impairment charge to a reporting unit’s trade name or goodwill. For example, we recognized significant impairment losses during 2020 related to a pandemic. We believe that we have made reasonable estimates and judgments.
Delays or mechanical faults may result in cancellation of cruises and/or necessitate unscheduled Dry-docks and repairs of ships. ​ In addition, availability, work stoppages, insolvency or financial problems in the shipyards’ construction, refurbishment or repair of our ships, other “force majeure” events that are beyond our control and the control of shipyards or subcontractors, or changes to technical specifications due to regulatory changes, sustainability initiatives or other 36 Table of Contents strategic initiatives could also delay or prevent the newbuild delivery, refurbishment and repair and maintenance of our ships.
Delays or mechanical faults may result in cancellation of cruises and/or necessitate unscheduled Dry-docks and repairs of ships. ​ In addition, availability, work stoppages, insolvency or financial problems in the shipyards’ construction, refurbishment or repair of our ships, other “force majeure” events that are beyond our control and the control of shipyards or subcontractors, or changes to technical specifications due to regulatory changes, sustainability initiatives or other strategic initiatives could also delay or prevent the newbuild delivery, refurbishment and repair and maintenance of our ships.
Ineffective marketing, ongoing and sustained promotional activities, negative publicity, unfair labor practices, and failure to protect the intellectual property rights in our brand are some of the potential threats to the strength of our brand, and those and other factors could rapidly and severely diminish customer confidence in us.
Ineffective marketing and promotional activities, negative publicity, unfair labor practices, and failure to protect the intellectual property rights in our brand are some of the potential threats to the strength of our brand, and those and other factors could rapidly and severely diminish customer confidence in us.
We carry limited business interruption insurance for certain shoreside operations, subject to limitations, exclusions and deductibles. ​ As part of our ordinary business operations, we and certain of our third-party service providers collect, process, transmit and store a large volume of personally identifiable information.
We carry limited business interruption insurance for certain shoreside operations, subject to limitations, exclusions and deductibles. ​ As part of our ordinary business operations, we and certain of our third-party service providers collect, process, transmit and store a large volume of personally identifiable information, including sensitive information.
Conversely, backlash against our sustainability initiatives and commitments may harm our reputation among other stakeholders and expose us to related liabilities. ​ Our inability to obtain adequate insurance coverage may adversely affect our business, financial condition and results of operations. ​ There can be no assurance that our risks are fully insured against or that any particular claim will be fully paid by our insurance.
Conversely, backlash against our sustainability initiatives and commitments may harm our reputation among other stakeholders and expose us to related liabilities. ​ Our inability to obtain adequate insurance coverage may adversely affect our business, financial condition and results of operations. ​ 36 Table of Contents There can be no assurance that our risks are fully insured against or that any particular claim will be fully paid by our insurance.
We are not legally or contractually required to pay dividends. In addition, NCLH is a holding company and would depend upon its subsidiaries for their ability to pay distributions to NCLH to finance any dividend or pay any other obligations of NCLH.
We are not legally or contractually required to pay dividends. In addition, NCLH is a holding company and would depend upon its subsidiaries for their abilities to pay distributions to NCLH to finance any dividend or pay any other obligations of NCLH.
The effect of these provisions may preclude third parties from seeking to acquire a controlling interest in NCLH in transactions that shareholders might consider to be in their best interests and may prevent them from receiving a premium above market price for their shares. ​ 43 Table of Contents Item 1B. Unresolved Staff Comments None. ​
The effect of these provisions may preclude third parties from seeking to acquire a controlling interest in NCLH in transactions that shareholders might consider to be in their best interests and may prevent them from receiving a premium above market price for their shares. ​ Item 1B. Unresolved Staff Comments None. ​
These issues are, and we believe will continue to be, 40 Table of Contents areas of focus by the relevant authorities throughout the world. This could result in the enactment of more stringent regulation of cruise ships that would subject us to increasing compliance costs in the future.
These issues are, and we believe will continue to be, areas of focus by the relevant authorities throughout the world. This could result in the enactment of more stringent regulation of cruise ships that would subject us to increasing compliance costs in the future.
If our employees or agents violate our policies, if we fail to maintain adequate record-keeping and internal accounting practices to accurately record our transactions or if we fail to implement or maintain other adequate safeguards, we may be subject to regulatory sanctions or severe criminal or civil sanctions and penalties. ​ Our failure or inability to recruit or retain qualified personnel or the loss of key personnel or employee relations issues may materially adversely affect our business, financial condition and results of operations. ​ We must continue to recruit, retain and motivate management and other employees in order to maintain our current business and support our projected growth.
If our employees or agents violate our policies, if we fail to maintain adequate record-keeping and internal accounting practices to accurately record our transactions or if we fail to implement or maintain other adequate safeguards, we may be subject to regulatory sanctions or severe criminal or civil sanctions and penalties. ​ Our failure or inability to recruit or retain qualified personnel or the loss of key personnel or employee relations issues may materially adversely affect our business, financial condition and results of operations. ​ 35 Table of Contents We must continue to recruit, retain and motivate management and other employees to maintain our current business and support our projected growth.
Subject to applicable insurance 38 Table of Contents coverage, we may also incur costs both in defending against any claims, actions and investigations and for any judgments, fines, civil or criminal penalties if such claims, actions or investigations are adversely determined. ​ We rely on third parties to provide hotel management services for certain ships and certain other services, and we are exposed to risks facing such providers.
Subject to applicable insurance coverage, we may also incur costs both in defending against any claims, actions and investigations and for any judgments, fines, civil or criminal penalties if such claims, actions or investigations are adversely determined. ​ We rely on third parties to provide hotel management services for certain ships and certain other services, and we are exposed to risks facing such providers.
COVID-19-related regulations also prevented us from using commercial airline services to transport our crew members to and from our ships, which resulted in increased costs to our Company. ​ Global events and conditions, including terrorist acts, armed conflicts, acts of piracy, and other international events impacting the security of travel or the global economy, or threats thereof, could adversely affect our business. 32 Table of Contents Global events and conditions, including the threat or possibility of future terrorist acts, outbreaks of hostilities or armed conflict, political unrest and instability, the issuance of government travel advisories or elevated threat warnings, increases in the activity of pirates, and other geo-political uncertainties, or the possibility or fear of such events, have had in the past and may again in the future have an adverse impact on our business.
Pandemic-related regulations also prevented us from using commercial airline services to transport our crew members to and from our ships, which resulted in increased costs to our Company. ​ Global events and conditions, including terrorist acts, geopolitical conflict, armed conflicts, acts of piracy, and other international events impacting the security of travel or the global economy, or threats thereof, could adversely affect our business. ​ 30 Table of Contents Global events and conditions, including the threat or possibility of future terrorist acts, geopolitical conflict, outbreaks of hostilities or armed conflict, political unrest and instability, government shutdowns, the issuance of government travel advisories or elevated threat warnings, increases in the activity of pirates, and other geo-political uncertainties, or the possibility or fear of such events, have had in the past and may again in the future have an adverse impact on our business.
Both the interruption of operations and the replacement of the third-party service providers at an increased cost could adversely impact our financial condition and results of operations. ​ Fluctuations in foreign currency exchange rates could adversely affect our financial results. ​ We earn revenues, pay expenses, purchase and own assets and incur liabilities in currencies other than the U.S. dollar; most significantly a portion of our revenue and expenses are denominated in foreign currencies, particularly British pound, Canadian dollar, euro and Australian dollar.
Both the interruption of operations and the replacement of the third-party service providers at an increased cost could adversely impact our financial condition and results of operations. ​ Fluctuations in foreign currency exchange rates could adversely affect our financial results. ​ We earn revenues, pay expenses, purchase and own assets and incur liabilities in currencies other than the U.S. dollar; most significantly, a portion of our revenue and expenses are denominated in foreign currencies, particularly British pounds, Canadian dollars, euros and Australian dollars.
During the fourth quarter of 2023, in response to the OECD’s BEPS 2.0 Pillar 2 global tax reform, the Company restructured its organizational structure by realigning many of its operations across its three different brands into a single jurisdiction, Bermuda. In connection with the reorganization, among other steps, certain NCLH subsidiaries were redomiciled to Bermuda.
In late 2023, in response to the OECD’s BEPS 2.0 Pillar 2 global tax reform, the Company restructured its organizational structure by realigning many of its operations across its three different brands into a single jurisdiction, Bermuda. In connection with the reorganization, among other steps, certain NCLH subsidiaries were redomiciled to Bermuda.
Several factors including a challenging operating environment impacts affecting consumer demand or spending, the deterioration of general macroeconomic conditions, or other factors could result in a change to the future cash flows we expect to derive from our operations.
Several factors including a challenging operating environment impacting consumer demand or spending, the deterioration of general macroeconomic conditions, or other factors could result in a change to the future cash flows we expect to derive from our operations.
If our assumptions and interpretations regarding the global minimum tax rules or our efforts to reorganize prove to be incorrect for any reason, 41 Table of Contents our business, financial condition and results of operations could be materially adversely affected.
If our assumptions and interpretations regarding the global minimum tax rules or our efforts to reorganize prove to be incorrect for any reason, our business, financial condition and results of operations could be materially adversely affected.
Our ability to execute our marketing and growth strategy depends on many factors, including the perceived quality of our services, the impact of our communication activities, including advertising, social media, and public relations, and our management of the customer experience, including direct interfaces through customer service.
Our ability to execute our marketing and growth strategy depends on many factors, including the perceived quality of our services, our communication activities, including advertising, social media, and public relations, and our management of the customer experience, including through customer service.
The availability of ports is affected by a number of factors, including, but not limited to, health, safety, and environmental concerns, existing capacity constraints, security, adverse weather conditions and natural disasters such as hurricanes, floods, typhoons and earthquakes, financial limitations on port development, political instability, armed conflicts, exclusivity arrangements that ports may have with our competitors, governmental regulations, including sanctions, and fees, local community concerns about port development and tourism.
The availability of ports is affected by a number of factors, including, but not limited to, health, safety, and environmental concerns, existing capacity constraints, security, adverse weather conditions and natural disasters, financial limitations on port development, political instability, armed conflicts, exclusivity arrangements that ports may have with our competitors, governmental regulations, including sanctions and fees, and local community concerns about port development and tourism.
If we are unable to attract new customers, or fail to do so in a cost-effective manner, our growth could be slower than we expect and our business could be harmed. ​ A failure to keep pace with developments in technology could impair our operations or competitive position. ​ Our business continues to demand the use of sophisticated systems and technology.
If we are unable to attract new customers, or fail to do so in a cost-effective manner, our growth could be slower than we expect and our business could be harmed. ​ A failure to keep pace with developments in technology could impair our operations or competitive position. ​ Our business continues to demand the use of sophisticated systems and technology, including the adoption and use of artificial intelligence (“AI”).
We may fall short of any sustainability goals we set, including those disclosed in this report, which may result in negative impacts to our reputation, financial condition and results of operations.
We may fall short of any sustainability goals we set, including those disclosed publicly, which may result in negative impacts to our reputation, financial condition and results of operations.
It is possible that other states, countries or ports of call that our ships regularly visit may also decide to assess new taxes or fees or change existing taxes or fees specifically applicable to the cruise industry and its employees and/or guests, which could increase our operating costs and/or could decrease the demand for cruises. ​ Changes in tax laws, or challenges to our tax positions could adversely affect our results of operations and financial condition. ​ We believe and have taken the position that our income that is considered to be derived from the international operation of ships as well as certain income that is considered to be incidental to such income (“shipping income”) is exempt from U.S. federal income taxes under Section 883, based upon certain assumptions as to shareholdings and other information as more fully described in “Item 1—Business—Taxation.” The provisions of Section 883 are subject to change at any time, possibly with retroactive effect. ​ We believe and have taken the position that substantially all of our income derived from the international operation of ships is properly categorized as shipping income and that we do not have a material amount of non-qualifying income.
It is possible that other states, countries or ports of call that our ships regularly visit may also decide to assess new taxes or fees or change existing taxes or fees specifically applicable to the cruise industry and its employees and/or guests, which could increase our operating costs and/or could decrease the demand for cruises. ​ Changes in tax laws, or challenges to our tax positions, could adversely affect our results of operations and financial condition. ​ We believe and have taken the position that substantially all of our income that is considered to be derived from the international operation of ships, as well as certain income that is considered to be incidental to such income (“shipping income”), is exempt from U.S. federal income taxes under Section 883, based upon certain assumptions as to shareholdings and other information as more fully described in “Item 1—Business—Taxation.” ​ 39 Table of Contents The provisions of Section 883 are subject to change at any time, possibly with retroactive effect.
We could also experience increases in other cruise operating costs due to market forces and economic or political instability resulting from increases or volatility in fuel expense.
We could also experience increases in other cruise operating costs due to market forces, global inflationary pressures and economic or political instability resulting from increases or volatility in fuel expense.
Any of these events or conditions may adversely affect demand for, and by extension pricing of, our cruises.
Any of these events or conditions may adversely affect demand for, and pricing of, our cruises.
The impacts of global events including armed or geopolitical conflicts and pandemics, a lack of viable Dry-dock facilities, modifications the Company plans to make to its newbuilds, including initiatives to improve environmental sustainability, and other macroeconomic events have resulted in some delays in expected ship deliveries, and may result in additional delays in ship deliveries in the future, which may be prolonged.
The impacts of global events including armed or geopolitical conflicts and pandemics, a lack of viable Dry-dock facilities, modifications to our newbuilds, including potential initiatives to improve environmental sustainability, and other macroeconomic events have resulted in some delays in expected ship deliveries, and may result in additional delays in ship deliveries in the future, which may be prolonged.
Increases in the price of, or major changes, significant delays and disruptions, or reduction in, commercial airline services has, and could in the future, disrupt our operations. ​ A number of our passengers and crew depend on scheduled commercial airline services to transport them to ports of embarkation for our cruises.
Increases in the price of, or major changes, significant delays and disruptions, or reductions in, commercial airline services has, and could in the future, disrupt our operations. ​ Many of our passengers and crew depend on scheduled commercial airline services to transport them to ports of embarkation for our cruises.
For example, currently and in the past, regulatory changes, disease outbreaks resulting in a global pandemic, armed conflicts and damages to ports from hurricanes have prohibited our cruise voyages from visiting certain regions. Certain ports have also significantly increased fees related to cruise visits, affecting the profitability of visiting those destinations.
For example, currently and in the past, regulatory changes, global pandemics, armed conflicts and damages to ports from hurricanes have prohibited our cruise voyages from visiting certain regions. Certain ports have also significantly increased fees related to cruise visits, affecting the profitability of visiting those destinations.
We also may not achieve the benefits that we anticipate from any new system or technology, such as fuel abatement technologies, and a failure to do so could result in higher than anticipated costs or could impair our operating results. ​ The adverse impact of general economic and related factors, such as fluctuating or increasing levels of interest rates, inflation, unemployment, underemployment and the volatility of fuel prices, declines in the securities and real estate markets and perceptions of these conditions can decrease the level of disposable income of consumers or consumer confidence.
In the past, we have not always achieved the anticipated benefits from the implementation of new systems or technologies, and we may not achieve the benefits that we anticipate from any new system or technology, such as fuel abatement technologies or reservation systems, in the future and a failure to do so could result in higher than anticipated costs or could impair our operating results. ​ 32 Table of Contents The adverse impact of general economic and related factors, such as fluctuating or increasing levels of interest rates, inflation, unemployment, underemployment and the volatility of fuel prices, declines in the securities and real estate markets and perceptions of these conditions can decrease the level of disposable income of consumers or consumer confidence.
We were also negatively impacted by adverse impacts to our travel agencies and suppliers due to COVID-19, and we may experience similar impacts in the event of a future pandemic or other public health crises. ​ Adverse incidents involving cruise ships may adversely affect our business, financial condition and results of operations. ​ The operation of cruise ships carries an inherent risk of loss caused by adverse weather conditions and maritime disasters, including, but not limited to, oil spills and other environmental mishaps, extreme weather conditions such as hurricanes, floods and typhoons, fire, mechanical failure, collisions, human error, war, terrorism, piracy, political action, civil unrest and insurrection in various countries and other circumstances or events.
We were also negatively impacted by adverse impacts to our travel agencies and suppliers due to COVID-19, and we may experience similar impacts in the event of a future pandemic or other public health crises. ​ Adverse incidents involving cruise ships may adversely affect our business, financial condition and results of operations. ​ The operation of cruise ships carries an inherent risk of loss caused by adverse weather conditions and maritime disasters, including, but not limited to, oil spills and other environmental mishaps, extreme weather conditions, fires, 31 Table of Contents mechanical failures, collisions, human error, war, terrorism, piracy, political action, civil unrest and insurrections in various countries and other circumstances or events.
Also, we may be limited in obtaining funds to pay amounts due to our counterparties 31 Table of Contents under our derivative contracts and to pay amounts that may become due under other agreements.
Also, we may be limited in obtaining funds to pay amounts due to our counterparties under our derivative contracts and to pay amounts that may become due under other agreements.
If we were to elect to replace any counterparty for their failure to perform their obligations under such instruments, we would likely incur significant costs to replace the counterparty.
If we were to elect to replace any counterparty for their failure to perform their obligations under such instruments, we would likely incur 29 Table of Contents significant costs to replace the counterparty.
For example, many commercial airlines reduced services, experienced staffing shortages and suffered other disruptions due to the COVID-19 pandemic and other macroeconomic conditions.
For example, many commercial airlines reduced services, experienced staffing shortages and suffered other disruptions due to a pandemic and other macroeconomic conditions.
Maintaining, promoting, and positioning our brand are important to expanding our customer base and will depend largely on the success of our marketing efforts and our ability to provide consistent, high-quality customer experiences. ​ We have used, and expect to continue to use, corporate partnerships, brand ambassadors, traditional, digital, and social media to promote our business.
Maintaining, promoting, and positioning our brand are important to expanding our customer base and will depend largely on the success of our marketing efforts and our ability to provide consistent, high-quality customer experiences despite any impacts from our cost management and capital allocation strategies. ​ We have used, and expect to continue to use, corporate partnerships, brand ambassadors and traditional, digital and social media to promote our business.
This caused significant costs and lost revenue as a result of, among other things, the suspension of cruise voyages, implementation of additional health and safety measures, reduced demand for cruise vacations, guest compensation, itinerary modifications, redeployments and cancellations, travel restrictions and advisories, the unavailability of ports and/or destinations and protected commissions.
This caused significant costs and lost revenue as a result of, among other things, the suspension of cruise voyages, implementation of additional health and safety measures, increased concern related to illness when traveling to, from, and on our ships, reduced demand for cruise vacations, guest compensation, itinerary modifications, redeployments and cancellations, travel restrictions and advisories, the unavailability of ports and/or destinations and protected commissions.
The operation of cruise ships also involves the risk of other incidents at sea or while in port, including 33 Table of Contents missing guests, inappropriate crew or passenger behavior and onboard crimes, which may bring into question passenger safety, may adversely affect future industry performance and may lead to litigation against us.
The operation of cruise ships also involves the risk of other incidents at sea, while in port or during shore excursions operated and/or offered by us and third parties, including missing guests, inappropriate crew or passenger behavior and onboard crimes, which may bring into question passenger safety, may adversely affect future industry performance and may lead to litigation against us.
Additionally, deterioration in our financial condition could negatively affect our ability to enter into new hedge contracts in the future. ​ Mechanical malfunctions and repairs, delays in our shipbuilding program, maintenance and refurbishments and the consolidation of qualified shipyard facilities could adversely affect our results of operations and financial condition. ​ The new construction, refurbishment, repair and maintenance of our ships are complex processes and involve risks similar to those encountered in other large and sophisticated equipment construction, refurbishment and repair projects.
Additionally, deterioration in our financial condition could negatively affect our ability to enter into new hedge contracts in the future. ​ Mechanical malfunctions and repairs, delays in our shipbuilding program, maintenance and refurbishments and the consolidation of qualified shipyard facilities could adversely affect our results of operations and financial condition. ​ The new construction, refurbishment, repair and maintenance of our ships are complex processes and involve risks similar to those encountered in other large and sophisticated equipment construction, refurbishment and repair projects. 34 Table of Contents Our ships are subject to the risk of mechanical failure or accident, which we have occasionally experienced and have had to repair.
Increases in the price of airfare due to increases in fuel prices, fuel surcharges, changes in commercial airline services as a result of health and safety events, strikes or other staffing shortages, weather or other events, or the lack of availability due to schedule changes or a high level of airline bookings has and could adversely affect our ability to transport guests and crew to or from our ships and thereby increase our cruise operating expenses which, in turn, has an adverse effect on our financial condition and results of operations.
Increases in the price of airfare due to increases in fuel prices, fuel surcharges, changes in commercial airline services as a result of health and safety events, strikes, airspace congestion or air traffic control and other airline- or airport-related staffing shortages, weather or other events, or the lack of availability due to schedule changes or increased airline bookings, have and could adversely affect our ability to transport guests and crew and thereby increase our cruise operating expenses which, in turn, have had and could have an adverse effect on our financial condition and results of operations.
The strengthening of the U.S. dollar against our other major currencies may adversely affect our U.S. dollar financial results and will reduce the U.S. dollar amount received upon conversion of these currencies into U.S. dollars. ​ We have historically and may in the future enter into ship construction contracts denominated in euros or other foreign currencies.
The strengthening of the U.S. dollar against our other major currencies may adversely affect our U.S. dollar financial results and will reduce the U.S. dollar amount received upon conversion of these currencies into U.S. dollars. ​ We currently have certain ship construction contracts and newbuild-related debt denominated in euros.
Risks Related to the Regulatory Environment in Which We Operate ​ We are subject to complex laws and regulations, including environmental, health and safety, labor, data privacy and protection and maritime laws and regulations, which could adversely affect our operations and certain recently introduced laws and regulations and future changes in laws and regulations could lead to increased costs and/or decreased revenue. ​ Increasingly stringent and complex international, federal, state, and local laws and regulations addressing environmental protection and health and safety of workers could affect our operations.
Competitive actions, including changes in pricing, capacity, deployment and promotional activity, may adversely affect our revenues, margins and operating results. ​ ​ 38 Table of Contents Risks Related to the Regulatory Environment in Which We Operate ​ We are subject to complex laws and regulations, including environmental, health and safety, labor, data privacy and protection and maritime laws and regulations, which could adversely affect our operations and certain recently introduced laws and regulations and future changes in laws and regulations could lead to increased costs and/or decreased revenue. ​ Increasingly stringent and complex international, federal, state, and local laws and regulations addressing environmental protection and health and safety of workers could affect our operations.
Adverse changes in the perceived or actual economic climate in North America or globally, such as the volatility of fuel prices, higher interest rates, stock and real estate market declines and/or volatility, more restrictive credit markets, higher 34 Table of Contents unemployment or underemployment rates, inflation, higher taxes, changes in governmental policies and political developments impacting international trade, trade disputes, increased tariffs or customers’ willingness to travel with us, could reduce the level of discretionary income or consumer confidence in the countries from which we source our guests.
Adverse changes in the perceived or actual economic climate in North America or globally, such as the volatility of fuel prices, elevated interest rates, which have risen significantly in recent years and may remain at elevated levels or fluctuate, stock and real estate market declines and/or volatility, more restrictive credit markets, higher unemployment or underemployment rates, inflation, which has moderated from recent historical highs but may persist or re-accelerate, higher taxes, changes in governmental policies and political developments impacting international trade, trade disputes, increased tariffs or customers’ willingness to travel with us, could reduce the level of discretionary income or consumer confidence in the countries from which we source our guests.
Our ships are subject to the risk of mechanical failure or accident, which we have occasionally experienced and have had to repair. For example, in the past we have had to delay or cancel cruises due to mechanical issues on our ships. There can be no assurance that we will not experience similar events in the future.
For example, in the past we have had to delay or cancel cruises due to mechanical issues on our ships. There can be no assurance that we will not experience similar events in the future.
As a consequence, we would need to refinance or repay the applicable debt facility or facilities, and would be required to raise additional debt or equity capital, or divest assets, to refinance or repay such facility or facilities.
As a consequence, we would need to refinance or repay the applicable debt facility or facilities and would be required to raise additional debt or equity capital, or divest assets, to refinance or repay such facility or facilities, and there can be no assurance that we would be successful in doing so.
In addition, although our collective bargaining agreements have a no-strike provision, they may not prevent a disruption in work on our ships in the future. Any such disruptions in work could have a material adverse effect on our financial results.
In addition, although our collective bargaining agreements have a no-strike provision, they may not prevent a disruption in work on our ships in the future.
Specifically, using AI technologies may lead to accuracy issues, security vulnerabilities, or biases, among other things, which may compromise data security, intellectual property, or client information, and adversely impact our reputation, business, financial condition and results of operations. We may also fail to adopt AI technologies at an appropriate pace, which could put us at a competitive disadvantage.
Specifically, using AI technologies may lead to accuracy issues, security vulnerabilities, or biases, among other things, which may compromise data security, intellectual property, or client information, and adversely impact our reputation, business, financial condition and results of operations.
In addition, these conditions could also impact our suppliers, which could result in disruptions in our suppliers’ services and financial losses for us. ​ Breaches in data security or other disturbances to our information systems and other networks or our actual or perceived failure to comply with requirements regarding data privacy and protection could impair our operations, subject us to significant fines, penalties and damages, and have a material adverse impact on our business, financial condition and results of operations. ​ The integrity and reliability of our information systems and networks are crucial to our business operations and a breach, compromise, damage or other disruption to these systems or networks could impair our operations, have an adverse impact on our financial results and negatively affect our reputation and customer demand.
Our revenues are also sensitive to the activities of other cruise lines in many areas including pricing, itineraries, capacity and promotions, which can have a material adverse impact not only on our revenues, but also on overall industry revenues. ​ Breaches in data security or other disturbances to our information systems and other networks or our actual or perceived failure to comply with requirements regarding data privacy and protection could impair our operations, subject us to significant fines, penalties and damages, and have a material adverse impact on our business, financial condition and results of operations. ​ The integrity and reliability of our information systems and networks are crucial to our business operations and a breach, compromise, damage or other disruption to these systems or networks could impair our operations, have an adverse impact on our financial results and negatively affect our reputation and customer demand.
Our business, financial condition and results of operations may be materially and adversely affected by any negative impact on the global economy, capital markets or commodity fuel prices resulting from armed conflicts and other geopolitical tensions. ​ Public health crises have had, and may in the future have, a significant impact on our financial condition, results, operations, outlook, plans, goals, growth, reputation, cash flows, liquidity, demand for voyages and share price. ​ Public health crises have, in the past, and could in the future, have significant negative impacts on all aspects of our business.
Our business, financial condition and results of operations may be materially and adversely affected by any negative impact on the global economy, capital markets or commodity fuel prices resulting from armed conflicts and other geopolitical tensions. ​ Additionally, we have been, and may continue to be, impacted by heightened regulations around customs and border control, travel bans to and from certain geographical areas, voluntary changes to our itineraries in light of geopolitical events, government policies increasing the difficulty of travel and limitations on issuing international travel visas. ​ Public health crises have had, and may in the future have, a significant impact on our financial condition, results, operations, outlook, plans, goals, growth, reputation, cash flows, liquidity, demand for voyages and share price. ​ Public health crises have in the past, and could have in the future, significant negative impacts on all aspects of our business.
Additionally, older ships in our fleet may not be as competitive as new ships enter the market and we may not be able to sell such older ships at optimal prices. 39 Table of Contents Our use of artificial intelligence (“AI”) technologies may present business, compliance, and reputational risks.
Additionally, older ships in our fleet may not be as competitive as new ships enter the market, and we may not be able to effectively sell or charter such older ships at optimal prices. ​ Our use of AI technologies may present business, compliance, and reputational risks. ​ We use AI technologies in some of our business processes, including some consumer-facing features.
If we were not able to obtain a covenant waiver under any one or more of these debt facilities or renegotiate such facilities, we would be in default of such agreements, which could result in cross defaults to our other debt agreements.
There can be no assurance that we would be able to obtain waivers or renegotiate these facilities in a timely manner, on acceptable terms or at all. ​ If we were not able to obtain a covenant waiver under any one or more of these debt facilities or renegotiate or repay such facilities, we would be in default of such agreements, which could result in cross defaults to our other debt agreements and an acceleration of the indebtedness under such debt facilities.
For example, In March 2020, we implemented a voluntary suspension of all cruise voyages across our three brands due to the COVID-19 pandemic. We began resuming cruise voyages in July 2021 in a phased manner and completed the phased relaunch of our entire fleet in early May 2022.
For example, in March 2020, we implemented a voluntary suspension of all cruise voyages across our three brands due to the COVID-19 pandemic.
While we have entered into foreign currency derivatives to manage a portion of the currency risk associated with such contracts, we are exposed to fluctuations in the euro exchange rate for the portions of the ship construction contracts that have not been hedged.
We are exposed to fluctuations in the euro exchange rate for the portions of the ship construction contracts and euro-denominated debt 37 Table of Contents that have not been hedged with foreign currency derivatives.
Our state, local or non-U.S. tax treatment may not conform to the U.S. federal income tax treatment discussed above.
We may be required to file tax returns in some or all of those jurisdictions. Our state, local or non-U.S. tax treatment may not conform to the U.S. federal income tax treatment discussed above.
Such assurances were superseded by the passage of new legislation as described below. ​ On December 27, 2023, the Bermuda Act was enacted in Bermuda. Under the Bermuda Act, the corporate income tax will be determined based on a statutory tax rate of 15% effective for fiscal years beginning on or after January 1, 2025.
Under the Bermuda Act, the corporate income tax will be determined based on a statutory tax rate of 15% effective for fiscal years beginning on or after January 1, 2025.
We use AI technologies in some of our business processes, including some consumer-facing features. Developing our own AI technologies requires resources to develop, test, and maintain such technologies, which could be costly.
Developing our own AI technologies requires resources to develop, test, and maintain such technologies, which could be costly.
We expect global tax reform will continue to evolve over the coming years and will continue to monitor these developments. ​ Additionally, previously we obtained an assurance from the Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act 1966 that, in the event that any legislation is enacted in Bermuda imposing any tax, including tax on profits or income among others, such tax shall not be applicable to them until March 31, 2035.
The primary reason for this result is that a large portion of the Company’s shipping income is exempt under the Pillar 2 shipping income exemption rule discussed below. ​ Additionally, previously we obtained an assurance from the Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act 1966 that, in the event that any legislation is enacted in Bermuda imposing any tax, including tax on profits or income among others, such tax shall not be applicable to them until March 31, 2035.
If such entities cannot demonstrate compliance with these requirements, we may be liable to pay penalties and fines in the 42 Table of Contents applicable jurisdictions and/or may take the decision to re-domicile such entities to different jurisdictions that may have tax regimes and other regulatory regimes which may be less favorable. ​ Risks Related to NCLH’s Ordinary Shares ​ Shareholders of NCLH may have greater difficulties in protecting their interests than shareholders of a U.S. corporation. ​ We are a Bermuda exempted company.
If such entities cannot demonstrate compliance with these requirements, we may be liable to pay penalties and fines in the applicable jurisdictions and/or may take the decision to re-domicile such entities to different jurisdictions that may have tax regimes and other regulatory regimes which may be less favorable.
The corporate income tax will apply only to Bermuda tax resident businesses that are part of multinational enterprise groups with €750 million or more in annual revenues in at least two of the four fiscal years immediately preceding the year in question.
The corporate income tax will apply only to Bermuda tax resident businesses that are part of multinational enterprise groups with €750 million or more in annual revenues, pursuant to the consolidated financial statements of the ultimate parent entity, in at least two of the four fiscal years immediately preceding the year in question. ​ As enacted, the Bermuda Act makes it clear that any corporate income tax liability is due regardless of the above assurances under the Exempted Undertakings Protection Act 1966.
For example, the IMO adopted two requirements that went into effect in 2023, the Carbon Intensity Indicator and Energy Efficiency Ship Index, which each regulate carbon emissions for ships. The E.U. has included the maritime shipping sector in the scope of its Emissions Trading System, which regulates GHG emissions through a “cap and trade” principle, since January 2024.
For example, the E.U. included the maritime shipping sector in the scope of its Emissions Trading System, which regulates GHG emissions through a “cap and trade” principle, since January 2024.
It is possible that we could be forced to cancel a cruise or a series of cruises due to these factors or incur increased port-related and other costs resulting from such adverse events.
We have experienced accidents and other incidents involving our cruise ships in the past and there can be no assurance that similar events will not occur in the future. It is possible that we could be forced to cancel cruises due to these factors or incur increased port-related and other costs resulting from such adverse events.
There can be no assurance that a breach or incident will not have a material impact on our operations and financial results in the future. In addition, we may not be in a position to promptly address security breaches, unauthorized access or other cybersecurity incidents or to implement adequate preventative measures if we are unable to immediately detect such incidents.
In addition, we may not be in a position to promptly address security breaches, unauthorized access or other cybersecurity incidents or to implement adequate preventative measures if we are unable to 33 Table of Contents immediately detect such incidents.
Therefore, we expect to be subject to the Bermuda corporate income tax with effect from January 1, 2025. The Bermuda Act provides for an international shipping income exclusion.
Therefore, we are subject to the Bermuda corporate income tax as of January 1, 2025. Similar to Pillar 2, and as described above, the Bermuda Act provides for an 40 Table of Contents international shipping income exclusion.
If there is a significant accident, mechanical failure or similar problem involving a ship, we may have to place a ship in an extended Dry-dock period for repairs.
Anything that damages our reputation (whether or not justified), could also have an adverse impact on demand, which could adversely affect our business, financial condition and results of operations. If there is a significant accident, mechanical failure or similar problem involving a ship, we may have to place a ship in an extended Dry-dock period for repairs.
Beginning in 2024, covered entities are required to procure and surrender allowances equivalent to 40% of their carbon emissions, with the amount increasing to 70% of carbon emissions in 2025 and 100% of GHG emissions in 2026. ​ Compliance with such laws and regulations have resulted in increased costs to our Company and are expected to entail significant expenses for a combination of: ship modifications, purchases of emissions allowances, alternative fuels and higher-cost compliant newbuilds.
The IMO has also implemented and considered additional requirements for the shipping industry that promote the reduction of GHG emissions. ​ Compliance with such laws and regulations has resulted in increased costs to our Company and is expected to entail significant expenses for a combination of: ship modifications, purchases of emissions allowances, alternative fuels and higher-cost compliant newbuilds.
Consequently, this may negatively affect demand for cruise vacations in these countries, which are a discretionary purchase. Decreases in demand for cruise vacations could result in price discounting or lower Occupancy Percentages, which, in turn, could reduce the profitability of our business.
Decreases in demand for cruise vacations could result in price discounting or lower Occupancy Percentages, which, in turn, could reduce the profitability of our business. In addition, these conditions could also impact our suppliers, which could result in disruptions in our suppliers’ services and financial losses for us.
We are actively exploring alternative fuel solutions as regulatory requirements develop to facilitate compliance while working on fuel cost increase protection tools for additional spend mitigation, but we may not be successful in these efforts. ​ We are also required to use alternate fuel sources as regulations aimed at reducing carbon intensity have been introduced and we may choose to use alternative fuels in order to achieve any emissions reduction targets we have and may in the future adopt.
Increases in fuel costs are expected as regulatory requirements take effect and alternative fuel demand outpaces infrastructure deployment, and our strategies may not fully offset these pressures. ​ We are required to use alternate fuel sources as regulations aimed at reducing carbon intensity have been introduced, and we may choose to use alternative fuels in order to achieve any emissions reduction targets we have and may in the future adopt.
Our executive officers and other members of senior management have substantial experience and expertise in our business and have made significant contributions to our growth and success. The loss of services of one or more of these individuals could materially adversely affect us.
Any such disruptions in work could have a material adverse effect on our financial results. ​ Our executive officers and other members of senior management have substantial experience and expertise in our business and have made significant contributions to our growth and success.
We may not be able to comply with future and existing regulations and may be subject to fines, penalties and limitations on our ability to operate. Some environmental groups continue to lobby for more extensive oversight of cruise ships and have generated negative publicity about the cruise industry and its environmental impact.
We may not be able to comply with future and existing regulations and may be subject to fines, penalties and limitations on our ability to operate.
Our ability to provide additional lender protections under these facilities will be limited by the restrictions in our indebtedness. There can be no assurance that we would be able to obtain waivers or renegotiate these facilities in a timely manner, on acceptable terms or at all.
Our ability to provide additional lender protections under these facilities will be limited by the restrictions in our indebtedness.
Therefore, we can give no assurances on this matter. We refer you to “Item 1—Business—Taxation.” ​ We may be subject to state, local and non-U.S. income or non-income taxes in various jurisdictions, including those in which we transact business, own property or reside. We may be required to file tax returns in some or all of those jurisdictions.
If we were not entitled to the benefit of Section 883, we and our subsidiaries would be subject to U.S. taxation on a portion of the income derived from or incidental to the international operation of our ships, which would reduce our net income. ​ We may be subject to state, local and non-U.S. income or non-income taxes in various jurisdictions, including those in which we transact business, own property or reside.
The EEXI is a design re-certification requirement that updates energy efficiency requirements for existing ships and regulates carbon dioxide emissions related to installed engine power, transport capacity and ship speed. The maritime shipping sector has been included in the E.U.’s Emissions Trading System since the beginning of 2024.
For example, the maritime shipping sector has been included in the E.U.’s Emissions Trading System since the beginning of 2024.
The expanded use of social media has increased the speed that negative publicity spreads and makes it more difficult to mitigate reputational damage. Anything that damages our reputation (whether or not justified), could have an adverse impact on demand, which could adversely affect our business, financial condition and results of operations.
The expanded use of social media has increased the speed that negative publicity spreads and makes it more difficult to mitigate reputational damage. Geopolitical conflicts, including ongoing conflicts, may affect itineraries, destination access, fuel availability and costs, and consumer demand, and may heighten cyber and operational risks.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThey are trained and equipped to identify, contain, analyze and investigate any perceived security threats as well as assist internal users with any information security questions or reported issues, such as phishing/scam emails, information security concerns and security solution related access or performance issues. ​ As part of our cybersecurity program, team members are offered cybersecurity training and participate in awareness programs including phishing simulation exercises, regular cybersecurity newsletters and reminders and programming and events during cybersecurity awareness month. ​ Our processes also address cybersecurity threat risks associated with our use of third-party service providers, including those who have access to our customer, prospect, supplier or employee data or our systems.
Biggest changeThey are trained and equipped to identify, contain, analyze and investigate any perceived security threats, as well as assist internal users with any 42 Table of Contents information security questions or reported issues, such as phishing/scam emails, information security concerns and security solution related access or performance issues. ​ As part of our cybersecurity program, team members are offered cybersecurity training and participate in awareness programs including phishing simulation exercises, regular cybersecurity newsletters and reminders and programming and events during cybersecurity awareness month. ​ Our processes also address cybersecurity threat risks associated with our use of third-party service providers, including those who have access to our customer, prospect, supplier or employee data or our systems.
We generally require that third-party service providers that access, host our data, or could otherwise introduce cybersecurity risk to us, enter into contracts that obligate them to manage their cybersecurity risks in certain ways and report any cybersecurity incidents to us. ​ We engage third-party advisory firms to conduct assessments of the maturity of our security program and, among other measures, work to be Payment Card Industry compliant where required.
We generally require that third-party service providers that access or host our data, or could otherwise introduce cybersecurity risk to us, enter into contracts that obligate them to manage their cybersecurity risks in certain ways and report any cybersecurity incidents to us. ​ We engage third-party advisory firms to conduct assessments of the maturity of our security program and, among other measures, work to be Payment Card Industry compliant where required.
The Audit Committee of our Board of Directors also receives updates, at least annually, from our Chief Information Officer and/or Chief Information Security Officer regarding cybersecurity and other information system compliance matters that may pose risks to our financial reporting or operations. ​ Our Chief Information Security Officer is responsible for our overall data security and cybersecurity risk reduction efforts, including information security compliance, training and awareness and application, network and system security.
The Audit Committee of our Board of Directors also receives updates, at least annually, from our Chief Technology Officer and/or Chief Information Security Officer regarding cybersecurity and other information system compliance matters that may pose risks to our financial reporting or operations. ​ Our Chief Information Security Officer is responsible for our overall data security and cybersecurity risk reduction efforts, including information security compliance, training and awareness and application, network and system security.
Our Chief Information Security Officer holds master’s and bachelor’s degrees in both Computer Information Systems and Business Administration and the following certifications: Certified Internal Controls Auditor (CICA), Payment Card Industry Professional (PCIP), Certified 44 Table of Contents Information Systems Security Professional (CISSP), Certified Information Systems Auditor (CISA) and Certified in Risk and Information Systems Control (CRISC). ​ We discuss risks related to cybersecurity threats under the heading “Breaches in data security or other disturbances to our information systems and other networks or our actual or perceived failure to comply with requirements regarding data privacy and protection could impair our operations, subject us to significant fines, penalties and damages, and have a material adverse impact on our business, financial condition and results of operations” included as part of our risk factor disclosures in Item 1A of this Annual Report, which disclosures are incorporated by reference herein.
Our Chief Information Security Officer holds master’s and bachelor’s degrees in both Computer Information Systems and Business Administration and the following certifications: Certified Internal Controls Auditor (CICA), Payment Card Industry Professional (PCIP), Certified Information Systems Security Professional (CISSP), Certified Information Systems Auditor (CISA) and Certified in Risk and Information Systems Control (CRISC). ​ We discuss risks related to cybersecurity threats under the heading “Breaches in data security or other disturbances to our information systems and other networks or our actual or perceived failure to comply with requirements regarding data privacy and protection could impair our operations, subject us to significant fines, penalties and damages, and have a material adverse impact on our business, financial condition and results of operations” included as part of our risk factor disclosures in Item 1A of this Annual Report, which disclosures are incorporated by reference herein.
Our Chief Information Security Officer has 25 years of prior experience in the fields of information systems, cybersecurity, risk management, and infrastructure management.
Our Chief Information Security Officer has over 25 years of prior experience in the fields of information systems, cybersecurity, risk management, and infrastructure management.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe lease a number of domestic and international offices throughout Europe, Asia, South America and Australia to administer our brand operations globally. Norwegian owns a private island in The Bahamas, Great Stirrup Cay, which we utilize as a port-of-call on some of our itineraries. We operate a private cruise destination in Belize, Harvest Caye.
Biggest changeNorwegian owns a private island in The Bahamas, Great Stirrup Cay, which we utilize as a port-of-call on some of our itineraries. We operate a private cruise destination in Belize, Harvest Caye. We believe that our facilities are adequate for our current needs, and that we are capable of obtaining additional facilities as necessary. ​
Item 2. Properties Information about our cruise ships may be found under “Item 1—Business—Our Fleet” and “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” NCLH’s principal executive offices are located in Miami, Florida where we lease approximately 393,571 square feet of facilities.
Properties Information about our cruise ships may be found under “Item 1—Business—Our Fleet” and “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” NCLH’s principal executive offices are located in Miami, Florida where we lease approximately 393,571 square feet of facilities. 43 Table of Contents We lease a number of domestic and international offices throughout Europe, Asia, South America and Australia to administer our brand operations globally.
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We believe that our facilities are adequate for our current needs, and that we are capable of obtaining additional facilities as necessary. ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMine Safety Disclosures None. ​ 45 Table of Contents PART II ​
Biggest changeMine Safety Disclosures None. ​ 44 Table of Contents PART II ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information NCLH’s ordinary shares are listed on the NYSE under the symbol “NCLH.” Holders As of February 17, 2025, there were 282 record holders of NCLH’s ordinary shares.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information NCLH’s ordinary shares are listed on the NYSE under the symbol “NCLH.” Holders As of February 17, 2026, there were 269 record holders of NCLH’s ordinary shares.
Any determination to pay dividends in the future will be at the discretion of our Board of Directors and will depend upon our results of operations, financial condition, restrictions imposed by applicable law and our financing agreements and other factors that our Board of Directors deems relevant. ​ 46 Table of Contents Stock Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of NCLH under the Securities Act of 1933, as amended, or the Exchange Act .
Any determination to pay dividends in the future will be at the discretion of our Board of Directors and will depend upon our results of operations, financial condition, restrictions imposed by applicable law and our financing agreements and other factors that our Board of Directors deems relevant. ​ 45 Table of Contents Stock Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of NCLH under the Securities Act of 1933, as amended, or the Exchange Act .
The Stock Performance Graph assumes that $100 was invested at the closing price of our ordinary shares on the NYSE and in each index on the last trading day of fiscal 2019. Past performance is not necessarily an indicator of future results. The stock prices used were as of the close of business on the respective dates.
The Stock Performance Graph assumes that $100 was invested at the closing price of our ordinary shares on the NYSE and in each index on the last trading day of fiscal 2020. Past performance is not necessarily an indicator of future results. The stock prices used were as of the close of business on the respective dates.
Item 6. [Reserved] ​ 47 Table of Contents
Item 6. [Reserved] ​ 46 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeExpected delivery dates for our most recently announced newbuilds are preliminary and subject to change. ​ ​ ​ ​ ​ ​ ​ Year Brand Class Ship Name Gross Tons (1) Berths (1) Status 2025 Norwegian Cruise Line Prima Class Norwegian Aqua ~156,000 ~3,550 Contract effective / financed (4) 59 Table of Contents 2025 Oceania Cruises Allura Class Allura ~68,000 ~1,200 Contract effective / financed (4) 2026 Norwegian Cruise Line Prima Class Norwegian Luna ~156,000 ~3,550 Contract effective / financed (4) 2026 Regent Seven Seas Prestige Class Seven Seas Prestige ~77,000 ~850 Contract effective / financed (4) 2027 Norwegian Cruise Line Next Gen "Methanol-Ready (2) " Prima Class To come ~169,000 ~3,850 Contract effective / financed (4) 2027 Oceania Cruises New Class To come ~86,000 ~1,450 Contract effective / financed (4) 2028 Norwegian Cruise Line Next Gen "Methanol-Ready (2) " Prima Class To come ~169,000 ~3,850 Contract effective / financed (4) Expected 2029 (3) Oceania Cruises New Class To come ~86,000 ~1,450 Contract effective / financed (4) 2029 (6) Regent Seven Seas Prestige Class To come ~77,000 ~850 Contract effective / financed (4) 2030 Norwegian Cruise Line New Class To come ~225,000 ~5,150 Contract effective / financing is being negotiated. 2030 (6) Oceania Cruises New Class — ~86,000 ~1,450 Contract effective, but not financed.
Biggest changeExpected delivery dates for our most recently announced newbuilds are preliminary and subject to change. ​ ​ ​ ​ ​ ​ ​ Year Brand Class Ship Name Gross Tons (1) Berths (1) Status 2026 Norwegian Cruise Line Prima Class 4 Norwegian Luna ~154,000 ~3,565 Contract effective / financed (3) 2026 Regent Seven Seas Cruises Prestige Class 1 Seven Seas Prestige ~77,000 ~822 Contract effective / financed (3) 2027 Norwegian Cruise Line Next Gen "Methanol-Ready (2) " Prima Class 5 Norwegian Aura ~170,000 ~3,880 Contract effective / financed (3) 2027 Oceania Cruises Sonata Class 1 Oceania Sonata ~86,000 ~1,390 Contract effective / financed (3) 2028 Norwegian Cruise Line Next Gen "Methanol-Ready (2) " Prima Class 6 To come ~170,000 ~3,880 Contract effective / financed (3) 2029 Oceania Cruises Sonata Class 2 Oceania Arietta ~86,000 ~1,390 Contract effective / financed (3) 2030 Norwegian Cruise Line New Class 1 To come ~227,000 ~5,000 Contract effective / financed (3) 2030 Regent Seven Seas Cruises Prestige Class 2 To come ~77,000 ~822 Contract effective / financed (3) 2032 Oceania Cruises Sonata Class 3 To come ~86,000 ~1,390 Contract effective, but not yet financed 2032 Norwegian Cruise Line New Class 2 To come ~227,000 ~5,000 Contract effective / financed (3) 2033 Regent Seven Seas Cruises Prestige Class 3 To come ~77,000 ~822 Contract will be effective upon financing 2034 Norwegian Cruise Line New Class 3 To come ~227,000 ~5,000 Contract effective / financing is being negotiated 2035 Oceania Cruises Sonata Class 4 To come ~86,000 ~1,390 Contract effective, but not yet financed 2036 Norwegian Cruise Line New Class 4 To come ~227,000 ~5,000 Contract effective / financing is being negotiated 2036 Regent Seven Seas Cruises Prestige Class 4 To come ~77,000 ~822 Contract will be effective upon financing 2037 Oceania Cruises Sonata Class 5 To come ~86,000 ~1,390 Contract will be effective upon financing 2037 Norwegian Cruise Line New Class 5 To come ~227,000 ~5,000 Contract will be effective upon financing (1) Berths and gross tons are preliminary and subject to change as we approach delivery.
NCLC also issued $1.8 billion aggregate principal amount of 6.750% senior unsecured notes due 2032.
NCLC also issued $1.8 billion aggregate principal amount of 6.750% senior unsecured notes due 2032.
If any of these transactions were to occur, they may be financed through the incurrence of additional permitted indebtedness, through cash flows from operations, or through the issuance of debt, equity or equity-related securities. Additionally, we similarly consider opportunities for the sale of ships and long-term charters with purchase options.
If any of these transactions were to occur, they may be financed through the incurrence of additional permitted indebtedness, through cash flows from operations, or through the issuance of debt, equity or equity-related securities. Additionally, we consider opportunities for the sale of ships and long-term charters with purchase options.
These costs include travel advisor commissions, air and land transportation expenses, related credit card fees, certain government taxes, fees and port expenses and the costs associated with shore excursions and hotel accommodations included as part of the overall cruise purchase price. ● Onboard and other primarily consists of direct costs incurred in connection with onboard and other revenue, including casino, beverage sales and shore excursions. ● Payroll and related consists of the cost of wages, benefits and logistics for shipboard employees and costs of certain inventory items, including food, for a third party that provides crew and other hotel services for certain ships. ● Fuel includes fuel costs, the impact of certain fuel hedges and fuel delivery costs. ● Food consists of food costs for passengers and crew on certain ships. ● Other consists of repairs and maintenance (including Dry-dock costs), ship insurance and other ship expenses.
These costs include travel advisor commissions, air and land transportation expenses, related credit card fees, certain government taxes, fees and port expenses and the costs associated with shore excursions and hotel accommodations included as part of the overall cruise purchase price. ● Onboard and other primarily consists of direct costs incurred in connection with onboard and other revenue, including casinos, beverage sales and shore excursions. ● Payroll and related consists of the cost of wages, benefits and logistics for shipboard employees and costs of certain inventory items, including food, for a third party that provides crew and other hotel services for certain ships. ● Fuel includes fuel costs, the impact of certain fuel hedges and fuel delivery costs. ● Food consists of food costs for passengers and crew on certain ships. ● Other consists of repairs and maintenance (including Dry-dock costs), ship insurance and other ship expenses.
Climate Change We believe the increasing focus on climate change, including the Company’s targets for greenhouse gas reductions, and evolving regulatory requirements will materially impact our future capital expenditures and results of operations.
Climate Change We believe the increasing focus on climate change, including the Company’s targets for greenhouse gas (“GHG”) reductions, and evolving regulatory requirements will materially impact our future capital expenditures and results of operations.
Generally, if an event of default under any debt agreement occurs, then pursuant to cross default and/or cross acceleration clauses, substantially all of our outstanding debt and derivative contract payables could become due, and all debt and derivative contracts could be terminated, which would have a material adverse impact to our operations and liquidity. ​ Our Moody’s long-term issuer rating is B1, our senior secured rating is Ba3 and our senior unsecured rating is B3.
Generally, if an event of default under any debt agreement occurs, then pursuant to cross default and/or cross acceleration clauses, substantially all of our outstanding debt and derivative contract payables could become due, and all debt and derivative contracts could be terminated, which would have a material adverse impact to our operations and liquidity. ​ Our Moody’s long-term issuer rating is B1 and our senior unsecured rating is B3.
For ship impairment analyses, the lowest level for which identifiable cash flows are largely independent of other assets and liabilities is each individual ship.
For ship impairment analyses, the lowest level for which identifiable cash flows are largely independent of other assets and liabilities is generally each individual ship.
As of December 31, 2024, there was $135.8 million of goodwill for the Regent and Norwegian reporting units. Trade names were $500.5 million as of December 31, 2024. As of October 1, 2024, our annual impairment reviews support the carrying values of these assets. See Note 2 – “Summary of Significant Accounting Policies” for more information.
As of December 31, 2025, there was $135.8 million of goodwill for the Regent and Norwegian reporting units. Trade names were $500.5 million as of December 31, 2025. As of October 1, 2025, our annual impairment reviews support the carrying values of these assets. See Note 2 – “Summary of Significant Accounting Policies” for more information.
For our evaluation of goodwill, we use a qualitative assessment which allows us to first assess qualitative factors to determine whether it is 49 Table of Contents more likely than not (i.e., more than 50%) that the estimated fair value of a reporting unit is less than its carrying value.
For our evaluation of goodwill, we use a qualitative assessment which allows us to first assess qualitative factors to determine whether it is 48 Table of Contents more likely than not (i.e., more than 50%) that the estimated fair value of a reporting unit is less than its carrying value.
For a comparison of the Company’s results of operations for the fiscal years ended December 31, 2023 to the year ended December 31, 2022, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s annual report on Form 10-K for the year ended December 31, 2023, which was filed with the U.S.
For a comparison of the Company’s results of operations for the fiscal years ended December 31, 2024 to the year ended December 31, 2023, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s annual report on Form 10-K for the year ended December 31, 2024, which was filed with the U.S.
Onboard and other revenue primarily consists of revenue from casino, beverage sales, shore excursions, specialty dining, retail sales, spa services and Wi-Fi services. Our onboard revenue is derived from onboard activities we perform directly or that are performed by independent concessionaires, from which we receive a share of their revenue.
Onboard and other revenue primarily consists of revenue from casinos, beverage sales, shore excursions, specialty dining, retail sales, spa services and Wi-Fi services. Our onboard revenue is derived from onboard activities we perform directly or that are performed by independent concessionaires, from which we receive a share of their revenue.
These critical accounting policies, which are presented in detail in our notes to our audited consolidated financial statements, relate to ship accounting and asset impairment. 48 Table of Contents Ship Accounting Ships represent our most significant assets, and we record them at cost less accumulated depreciation.
These critical accounting policies, which are presented in detail in our notes to our audited consolidated financial statements, relate to ship accounting and asset impairment. 47 Table of Contents Ship Accounting Ships represent our most significant assets, and we record them at cost less accumulated depreciation.
This deficit included $3.1 billion of advance ticket sales, which represents the total revenue we collected in advance of sailing dates and accordingly are substantially more like deferred revenue balances rather than actual current cash liabilities.
This deficit included $3.2 billion of advance ticket sales, which represents the total revenue we collected in advance of sailing dates and accordingly are substantially more like deferred revenue balances rather than actual current cash liabilities.
We expect to incur significant expenses related to these regulatory requirements and commitments, which have and will include expenses related to GHG emissions reduction initiatives, including modifications to our ships, and have and will include the purchase of emissions allowances, among other things.
We expect to incur significant expenses related to these regulatory requirements and commitments, which have and will include expenses related to GHG emissions reduction initiatives, including modifications to our ships, and have and will include the purchase of emissions allowances and alternative fuels, among other things.
Results of Operations The discussion below compares the results of operations for the year ended December 31, 2024 to the year ended December 31, 2023. You should read this discussion in conjunction with the consolidated financial statements and the notes thereto included elsewhere in this Annual Report.
Results of Operations The discussion below compares the results of operations for the year ended December 31, 2025 to the year ended December 31, 2024. You should read this discussion in conjunction with the consolidated financial statements and the notes thereto included elsewhere in this Annual Report.
We included this as an adjustment in the reconciliation of Adjusted Net Income since the benefit is not representative of our day-to-day operations, and this adjustment did not occur and is not included in the comparative period presented within this Annual Report.
We included this as an adjustment in the reconciliation of Adjusted Net Income since the loss is not representative of our day-to-day operations, and this adjustment did not occur and is not included in the comparative period presented within this Annual Report.
The net proceeds, together with cash on hand, were used to redeem $600.0 million aggregate principal amount of 8.375% senior secured notes due 2028 and $1.2 billion aggregate principal amount of 5.875% senior unsecured notes due 2026, together with any accrued and unpaid interest thereon, and to pay any related transaction premiums, fees and expenses.
The net proceeds, together with cash on hand, were used to redeem $600.0 million aggregate principal amount of 8.375% senior secured notes due 2028 and $1.2 billion aggregate principal amount of 5.875% senior unsecured notes due 2026, together with any accrued and unpaid interest 50 Table of Contents thereon, and to pay any related transaction premiums, fees and expenses.
However, we do not believe that these restrictions have had or are expected to have an impact on our ability to meet any cash obligations. ​ We believe our cash on hand, borrowings available under our Revolving Loan Facility, expected future operating cash inflows and our ability to issue debt securities or additional equity securities, will be sufficient to fund operations, debt payment requirements, capital expenditures and maintain compliance with covenants under our debt agreements over the next 12-month period.
However, we do not believe that these restrictions have had or are expected to have an impact on our ability to meet any cash obligations. ​ We believe our cash on hand, borrowings available under our Revolving Loan Facility, expected future operating cash inflows and our ability to issue debt securities or additional equity securities, will be sufficient to fund operations, debt 60 Table of Contents payment requirements, capital expenditures and maintain compliance with covenants under our debt agreements over the next 12-month period.
ETS, a portion of which was collected directly from passengers through revenue. Additionally, our ships, port facilities, corporate offices and island destinations have in the past and may again be adversely affected by an increase in the frequency and intensity of adverse weather conditions caused by climate change.
ETS, the majority of which was collected directly from passengers through revenue. Additionally, our ships, port facilities, corporate offices and island destinations have in the past and may again be adversely affected by an increase in the frequency and intensity of adverse weather conditions caused by climate change.
Refer to “—Liquidity and Capital Resources—General” for further information regarding liquidity. ​ 61 Table of Contents Other Certain service providers may require collateral in the normal course of our business. The amount of collateral may change based on certain terms and conditions. We refer you to “—Liquidity and Capital Resources—General” for information regarding collateral provided to our credit card processors.
Refer to “—Liquidity and Capital Resources—General” for further information regarding liquidity. ​ Other Certain service providers may require collateral in the normal course of our business. The amount of collateral may change based on certain terms and conditions. We refer you to “—Liquidity and Capital Resources—General” for information regarding collateral provided to our credit card processors.
For the Company’s cash flow activities for the fiscal year ended December 31, 2022, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s annual report on Form 10-K for the year ended December 31, 2023, which was filed with the U.S. Securities and Exchange Commission on February 28, 2024.
For the Company’s cash flow activities for the fiscal year ended December 31, 2023, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s annual report on Form 10-K for the year ended December 31, 2024, which was filed with the U.S. Securities and Exchange Commission on February 27, 2025.
We have set interim targets to guide us on our path to net zero and provide more details about them in our annual Sail & Sustain Report (which does not constitute a part of, and shall not be deemed incorporated by reference into, this Report).
We have set interim targets to guide us on our path to net zero GHG emissions and provide more details about such targets in our annual Sail & Sustain Report (which does not constitute a part of, and shall not be deemed incorporated by reference into, this report).
There is no assurance that cash flows from operations and additional financings will be available in the future to fund our future obligations. Beyond the next 12 months, we will pursue refinancings and other balance sheet optimization transactions in order to reduce interest expense and/or extend debt maturities.
Within the next twelve months, we may pursue additional refinancings in order to reduce interest expense and/or extend debt maturities or pursue other balance sheet optimization transactions. There is no assurance that cash flows from operations and additional financings will be available in the future to fund our future obligations.
Furthermore, we are exposed to fluctuations in the euro exchange rate for certain portions of ship construction contracts and various exchange rates for customer deposits that have not been hedged. See “Item 1A—Risk Factors” in our Annual Report for additional information.
Furthermore, we are exposed to fluctuations in the euro exchange rate for certain portions of ship construction contracts, euro-denominated debt and 51 Table of Contents various exchange rates for customer deposits that have not been hedged. See “Item 1A—Risk Factors” in our Annual Report for additional information.
During 2024, we spent $47.7 million on capital expenditures for projects that are intended to reduce carbon emissions from our existing fleet. We have changed and may continue to be required to change certain operating procedures, for example slowing the speed of our ships, to meet regulatory requirements, which could adversely impact our operations.
During 2025, we spent $36.1 million on capital expenditures for projects that are intended to reduce carbon emissions from our existing fleet. We have changed and may continue to be required to change certain operating procedures, for example slowing the speed of our ships, to meet regulatory requirements, which could adversely impact our operations.
Net cash used in financing activities was $1.0 billion in 2024, primarily due to repayments of newbuild loans, our 2028 Secured Notes and the 3.625% senior notes due 2024 partially offset by the proceeds from newbuild loan facilities and the 2030 Notes.
Net cash used in financing activities was $1.0 billion in 2024, primarily due to repayments of newbuild loans, our 9.75% senior secured notes due 2028 and the 3.625% senior unsecured notes due 2024 partially offset by the proceeds from newbuild loan facilities and the 6.25% senior unsecured notes due 2030.
(2) Non-cash share-based compensation expenses related to equity awards are included in marketing, general and administrative expense and payroll and related expense. (3) Losses on extinguishments and modifications of debt are primarily included in interest expense, net. (4) Non-cash income tax benefit related to the reversal of a valuation allowance on our U.S. deferred tax assets.
(2) Non-cash share-based compensation expenses related to equity awards are included in marketing, general and administrative expense and payroll and related expense. (3) Losses on extinguishments and modifications of debt are included in interest expense, net. (4) Non-cash income tax benefit related to the reversal of valuation allowances on our U.S. federal and state deferred tax assets.
Refer to “Item 1A—Risk Factors” for further details regarding risks and uncertainties that may cause our results to differ from our expectations. At December 31, 2024, we were in compliance with all of our debt covenants.
Refer to “Item 1A—Risk Factors” for further details regarding risks and uncertainties that may cause our results to differ from our expectations. 57 Table of Contents At December 31, 2025, we were in compliance with all of our debt covenants.
Our primary ongoing liquidity requirements are to finance working capital, capital expenditures and debt service. As of December 31, 2024, we had a working capital deficit of $4.8 billion.
Our primary ongoing liquidity requirements are to finance working capital, capital expenditures and debt service. As of December 31, 2025, we had a working capital deficit of $4.3 billion.
We are also evaluating the effects of global climate change related requirements, which are still evolving, including our ability to mitigate certain future expenses through initiatives to reduce GHG emissions; consequently, the full impact to the Company is not yet known. During 2024, we recognized $19.3 million of expense related to compliance with the E.U.
We are also evaluating the effects of global climate change-related requirements, which are still evolving, including our ability to mitigate certain future expenses through initiatives to reduce GHG emissions; consequently, the impact to the Company is not known. During 2025, we recognized $34.2 million of expense related to compliance with the E.U.
Adjusted EBITDA increased 31.7% to $2.5 billion for the year ended December 31, 2024 from $1.9 billion for the year ended December 31, 2023. We refer you to our “Results of Operations” below for a calculation of Adjusted Net Income, Adjusted EPS and Adjusted EBITDA.
Adjusted EBITDA increased 11.4% to $2.7 billion for the year ended December 31, 2025 from $2.5 billion for the year ended December 31, 2024. We refer you to our “Results of Operations” below for a calculation of Adjusted Net Income, Adjusted EPS and Adjusted EBITDA.
We have export-credit backed financing in place for the anticipated expenditures related to ship construction contracts of $1.5 billion, $1.5 billion and $1.8 billion for the years ending December 31, 2025, 2026 and 2027, respectively. Anticipated other non-newbuild capital expenditures are $0.6 billion for the year ending December 31, 2025.
We have export-credit backed financing in place for the anticipated expenditures related to ship construction contracts of $1.6 billion, $2.0 billion and $1.4 billion for the years ending 58 Table of Contents December 31, 2026, 2027 and 2028, respectively. Anticipated other non-newbuild capital expenditures are $0.5 billion for the year ending December 31, 2026.
(3) Non-cash share-based compensation expenses related to equity awards are included in marketing, general and administrative expense and payroll and related expense. ​ 56 Table of Contents Year Ended December 31, 2024 (“2024”) Compared to Year Ended December 31, 2023 (“2023”) Revenue Total revenue increased 10.9% to $9.5 billion in 2024 compared to $8.5 billion in 2023 primarily due to an increase in Capacity Days and an increase in passenger ticket pricing and onboard spending.
(3) Non-cash share-based compensation expenses related to equity awards are included in marketing, general and administrative expense and payroll and related expense. ​ Year Ended December 31, 2025 (“2025”) Compared to Year Ended December 31, 2024 (“2024”) Revenue Total revenue increased 3.7% to $9.8 billion in 2025 compared to $9.5 billion in 2024 primarily due to an increase in Capacity Days and an increase in passenger ticket pricing and onboard spending.
If we reduced our estimated weighted average ship service life by one year, depreciation expense for the year ended December 31, 2024 would have increased by $20.5 million. In addition, if our ships were estimated to have no residual value, depreciation expense for the same period would have increased by $89.7 million.
If we reduced our estimated weighted average ship service life by one year, depreciation expense for the year ended December 31, 2025 would have increased by $22.3 million. In addition, if our ships were estimated to have no residual value, depreciation expense for the same period would have increased by $94.3 million.
We believe we were in compliance with our covenants as of December 31, 2024. In addition, our existing debt agreements restrict, and any of our future debt arrangements may restrict, among other things, the ability of our subsidiaries, including NCLC, to make distributions and/or pay dividends to NCLH and NCLH’s ability to pay cash dividends to its shareholders.
In addition, our existing debt agreements restrict, and any of our future debt arrangements may restrict, among other things, the ability of our subsidiaries, including NCLC, to make distributions and/or pay dividends to NCLH and NCLH’s ability to pay cash dividends to its shareholders.
Funding Sources Certain of our debt agreements contain covenants that, among other things, require us to maintain a minimum level of liquidity, as well as limit our net funded debt-to-capital ratio and maintain certain other ratios. Approximately $15.6 billion of our assets were pledged as collateral for certain of our debt as of December 31, 2024.
Funding Sources Certain of our debt agreements contain covenants that, among other things, require us to maintain a minimum level of liquidity, as well as limit our net funded debt-to-capital ratio and maintain certain other ratios.
See Note 9 – “Long-Term Debt” for more information. ​ In January 2025, the full amount of outstanding borrowings under the Breakaway one loan, Breakaway two loan, Marina newbuild loan and Riviera newbuild loan, plus any accrued and unpaid interest thereon, was repaid with funds drawn from the Revolving Loan Facility.
In January 2025, the full amount of outstanding borrowings under the Breakaway one loan, Breakaway two loan, Marina newbuild loan and Riviera newbuild loan, plus any accrued and unpaid interest thereon, was repaid with funds drawn from the Revolving Loan Facility, and the related collateral was also released.
In measuring our ability to control costs in a manner that 50 Table of Contents positively impacts our net income, we believe changes in Adjusted Gross Margin, Net Yield, Net Cruise Cost and Adjusted Net Cruise Cost Excluding Fuel to be the most relevant indicators of our performance.
In measuring our ability to control costs in a manner that positively impacts our net income, we believe changes in Adjusted Gross Margin, Net Yield, Net Cruise Cost and Adjusted Net Cruise Cost Excluding Fuel to be the most relevant indicators of our performance. 49 Table of Contents We believe that Adjusted EBITDA is appropriate as a supplemental financial measure as it is used by management to assess operating performance.
Future Capital Commitments Future capital commitments consist of contracted commitments, including ship construction contracts. Anticipated expenditures related to ship construction contracts and growth are $2.5 billion, $2.4 billion and $2.4 billion for the years ending December 31, 2025, 2026 and 2027, respectively.
Future Capital Commitments Future capital commitments consist of contracted commitments, including ship construction contracts. Anticipated expenditures related to ship construction contracts and growth, which includes private island developments and enhancements and other strategic growth initiatives, are $2.9 billion, $2.9 billion and $1.8 billion for the years ending December 31, 2026, 2027 and 2028, respectively.
Capacity Days increased by 3.5%. For the year ended December 31, 2024, we had net income and diluted EPS of $910.3 million and $1.89, respectively. For the year ended December 31, 2023, we had net income and diluted EPS of $166.2 million and $0.39, respectively.
For the year ended December 31, 2024, we had net income and diluted EPS of $910.3 million and $1.89, respectively. Operating income increased to $1.6 billion for the year ended December 31, 2025 from $1.5 billion for the year ended December 31, 2024.
Our business model, along with our liquidity and undrawn export-credit backed facilities , allows us to operate with a working capital deficit and still meet our operating, investing and financing needs. In February 2024, NCLC and the Commitment Parties entered into the third amended commitment letter, which became effective in March 2024.
Our business model, along with our liquidity and undrawn export-credit backed facilities , allows us to operate with a working capital deficit and still meet our operating, investing and financing needs.
Our S&P Global issuer credit rating is B+, our issue-level rating on our $1.7 billion Revolving Loan Facility and $790 million 8.125% senior secured notes due 2029 is BB, our issue-level rating on our other senior secured notes is BB- and our senior unsecured rating is B+.
Our S&P Global issuer credit rating is B+, our issue-level rating on our Revolving Loan Facility is BB and our senior unsecured rating is B+.
Securities and Exchange Commission on February 28, 2024. ​ ​ 53 Table of Contents We reported total revenue, total cruise operating expense, operating income and net income as follows (in thousands, except per share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 Total revenue ​ $ 9,479,651 ​ $ 8,549,924 Total cruise operating expense ​ $ 5,688,696 ​ $ 5,468,587 Operating income ​ $ 1,465,906 ​ $ 930,911 Net income ​ $ 910,257 ​ $ 166,178 EPS: ​ ​ Basic ​ $ 2.09 ​ $ 0.39 Diluted ​ $ 1.89 ​ $ 0.39 ​ The following table sets forth operating data as a percentage of total revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 Revenue ​ ​ ​ ​ ​ Passenger ticket 67.7 % 67.3 % Onboard and other 32.3 % 32.7 % Total revenue 100.0 % 100.0 % Cruise operating expense Commissions, transportation and other 20.2 % 22.0 % Onboard and other 7.0 % 7.0 % Payroll and related 14.2 % 14.8 % Fuel 7.4 % 8.4 % Food 3.3 % 4.2 % Other 7.9 % 7.6 % Total cruise operating expense 60.0 % 64.0 % Other operating expense Marketing, general and administrative 15.1 % 15.7 % Depreciation and amortization 9.4 % 9.4 % Total other operating expense 24.5 % 25.1 % Operating income 15.5 % 10.9 % Non-operating income (expense) Interest expense, net (7.9) % (8.5) % Other income (expense), net 0.6 % (0.5) % Total non-operating income (expense) (7.3) % (9.0) % Net income before income taxes 8.2 % 1.9 % Income tax benefit 1.4 % — % Net income 9.6 % 1.9 % ​ The following table sets forth selected statistical information: ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 Passengers carried 2,926,794 2,716,546 Passenger Cruise Days 24,593,331 23,311,672 Capacity Days 23,445,397 22,652,588 Occupancy Percentage 104.9 % 102.9 % ​ ​ 54 Table of Contents Adjusted Gross Margin and Net Yield were calculated as follows (in thousands except Capacity Days and per Capacity Day data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ 2024 ​ 2023 Total revenue ​ $ 9,479,651 ​ $ 8,549,924 Less: ​ ​ Total cruise operating expense ​ ​ 5,688,696 ​ ​ 5,468,587 Ship depreciation ​ ​ 825,493 ​ ​ 753,629 Gross Margin ​ ​ 2,965,462 ​ ​ 2,327,708 Ship depreciation ​ ​ 825,493 ​ ​ 753,629 Payroll and related ​ ​ 1,344,718 ​ ​ 1,262,119 Fuel ​ ​ 698,050 ​ ​ 716,833 Food ​ 312,992 ​ 358,310 Other ​ 753,940 ​ 648,142 Adjusted Gross Margin ​ $ 6,900,655 ​ $ 6,066,741 Capacity Days ​ 23,445,397 ​ ​ 22,652,588 Gross Margin per Capacity Day ​ $ 126.48 ​ $ 102.76 Net Yield ​ $ 294.33 ​ $ 267.82 ​ 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 2023 Total cruise operating expense ​ $ 5,688,696 ​ $ 5,468,587 Marketing, general and administrative expense ​ 1,434,807 ​ 1,341,858 Gross Cruise Cost ​ 7,123,503 ​ 6,810,445 Less: ​ ​ Commissions, transportation and other expense ​ 1,917,443 ​ 1,883,279 Onboard and other expense ​ 661,553 ​ 599,904 Net Cruise Cost ​ 4,544,507 ​ 4,327,262 Less: Fuel expense ​ 698,050 ​ 716,833 Net Cruise Cost Excluding Fuel ​ 3,846,457 ​ 3,610,429 Less Other Non-GAAP Adjustments: ​ ​ Non-cash deferred compensation (1) ​ 2,875 ​ 2,312 Non-cash share-based compensation (2) ​ 91,781 ​ 118,940 Adjusted Net Cruise Cost Excluding Fuel ​ $ 3,751,801 ​ $ 3,489,177 Capacity Days ​ 23,445,397 ​ 22,652,588 Gross Cruise Cost per Capacity Day ​ $ 303.83 ​ $ 300.65 Net Cruise Cost per Capacity Day ​ $ 193.83 ​ $ 191.03 Net Cruise Cost Excluding Fuel per Capacity Day ​ $ 164.06 ​ $ 159.38 Adjusted Net Cruise Cost Excluding Fuel per Capacity Day ​ $ 160.02 ​ $ 154.03 (1) Non-cash deferred compensation expenses related to the crew pension plan, which are included in payroll and related expense.
Securities and Exchange Commission on February 27, 2025. ​ 52 Table of Contents We reported total revenue, total cruise operating expense, operating income, net income and EPS as follows (in thousands, except per share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Total revenue ​ $ 9,827,592 ​ $ 9,479,651 Total cruise operating expense ​ $ 5,639,163 ​ $ 5,688,696 Operating income ​ $ 1,560,868 ​ $ 1,465,906 Net income ​ $ 423,246 ​ $ 910,257 EPS: ​ ​ ​ ​ Basic ​ $ 0.94 ​ $ 2.09 Diluted ​ $ 0.92 ​ $ 1.89 ​ The following table sets forth operating data as a percentage of total revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ Revenue ​ ​ ​ ​ ​ Passenger ticket 68.0 % 67.7 % Onboard and other 32.0 % 32.3 % Total revenue 100.0 % 100.0 % Cruise operating expense ​ ​ Commissions, transportation and other 18.1 % 20.2 % Onboard and other 7.0 % 7.0 % Payroll and related 14.3 % 14.2 % Fuel 6.9 % 7.4 % Food 3.2 % 3.3 % Other 7.9 % 7.9 % Total cruise operating expense 57.4 % 60.0 % Other operating expense ​ ​ Marketing, general and administrative 15.7 % 15.1 % Depreciation and amortization 11.0 % 9.4 % Total other operating expense 26.7 % 24.5 % Operating income 15.9 % 15.5 % Non-operating income (expense) ​ ​ Interest expense, net (9.7) % (7.9) % Other income (expense), net (1.8) % 0.6 % Total non-operating income (expense) (11.5) % (7.3) % Net income before income taxes 4.4 % 8.2 % Income tax benefit (expense) (0.1) % 1.4 % Net income 4.3 % 9.6 % ​ The following table sets forth selected statistical information: ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2025 ​ ​ ​ 2024 ​ ​ ​ Passengers carried 2,997,829 2,926,794 Passenger Cruise Days 25,278,352 24,593,331 Capacity Days 24,433,624 23,445,397 Occupancy Percentage 103.5 % 104.9 % ​ ​ 53 Table of Contents Adjusted Gross Margin and Net Yield were calculated as follows (in thousands, except Capacity Days and per Capacity Day data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ 2025 ​ 2024 Total revenue ​ $ 9,827,592 ​ $ 9,479,651 Less: ​ ​ ​ ​ Total cruise operating expense ​ ​ 5,639,163 ​ ​ 5,688,696 Ship depreciation ​ ​ 902,012 ​ ​ 825,493 Gross margin ​ ​ 3,286,417 ​ ​ 2,965,462 Ship depreciation ​ ​ 902,012 ​ ​ 825,493 Payroll and related ​ ​ 1,403,056 ​ ​ 1,344,718 Fuel ​ ​ 675,887 ​ ​ 698,050 Food ​ 315,460 ​ 312,992 Other ​ 774,032 ​ 753,940 Adjusted Gross Margin ​ $ 7,356,864 ​ $ 6,900,655 Capacity Days ​ 24,433,624 ​ ​ 23,445,397 Gross margin per Capacity Day ​ $ 134.50 ​ $ 126.48 Net Yield ​ $ 301.10 ​ $ 294.33 ​ 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2025 2024 Total cruise operating expense ​ $ 5,639,163 ​ $ 5,688,696 Marketing, general and administrative expense ​ 1,548,806 ​ 1,434,807 Gross Cruise Cost ​ 7,187,969 ​ 7,123,503 Less: ​ ​ ​ ​ Commissions, transportation and other expense ​ 1,782,004 ​ 1,917,443 Onboard and other expense ​ 688,724 ​ 661,553 Net Cruise Cost ​ 4,717,241 ​ 4,544,507 Less: Fuel expense ​ 675,887 ​ 698,050 Net Cruise Cost Excluding Fuel ​ 4,041,354 ​ 3,846,457 Less Other Non-GAAP Adjustments: ​ ​ ​ ​ Non-cash deferred compensation (1) ​ 2,210 ​ 2,875 Non-cash share-based compensation (2) ​ 88,393 ​ 91,781 Adjusted Net Cruise Cost Excluding Fuel ​ $ 3,950,751 ​ $ 3,751,801 Capacity Days ​ 24,433,624 ​ 23,445,397 Gross Cruise Cost per Capacity Day ​ $ 294.18 ​ $ 303.83 Net Cruise Cost per Capacity Day ​ $ 193.06 ​ $ 193.83 Net Cruise Cost Excluding Fuel per Capacity Day ​ $ 165.40 ​ $ 164.06 Adjusted Net Cruise Cost Excluding Fuel per Capacity Day ​ $ 161.69 ​ $ 160.02 (1) Non-cash deferred compensation expenses related to the crew pension plan, which are included in payroll and related expense.
Concurrently, the Revolving Loan Facility was increased from $1.2 billion to $1.7 billion with the maturity date extended to 2030 and the collateral of the Revolving Loan Facility and the 8.125% senior secured notes due 2029 were modified.
Concurrently, the Revolving Loan Facility was increased from $1.2 billion to $1.7 billion with the maturity date extended to 2030.
Although the agreements vary, these requirements may generally be satisfied either through a percentage of customer payments withheld or providing cash funds directly to the card processor. Any cash reserve or collateral requested could be increased or decreased.
These agreements allow the credit card processors to require, under certain circumstances, that the Company maintain a reserve which would be satisfied by posting collateral. Although the agreements vary, these requirements may generally be satisfied either through a percentage of customer payments withheld or providing cash funds directly to the card processor.
(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. 55 Table of Contents Adjusted Net Income and Adjusted EPS were calculated as follows (in thousands, except share and per share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 Net income ​ $ 910,257 ​ $ 166,178 Effect of dilutive securities - exchangeable notes ​ ​ 63,308 ​ ​ — Net income and assumed conversion of exchangeable notes ​ ​ 973,565 ​ ​ 166,178 Non-GAAP Adjustments: ​ ​ Non-cash deferred compensation (1) ​ 4,930 ​ 4,039 Non-cash share-based compensation (2) ​ 91,781 ​ 118,940 Extinguishment and modification of debt (3) ​ 29,175 ​ 8,822 Reversal of U.S. deferred tax asset valuation allowance (4) ​ (161,926) ​ — Adjusted Net Income ​ $ 937,525 ​ $ 297,979 Diluted weighted-average shares outstanding - Net income and Adjusted Net Income ​ 515,030,548 ​ 427,400,849 Diluted EPS ​ $ 1.89 ​ $ 0.39 Adjusted EPS ​ $ 1.82 ​ $ 0.70 (1) Non-cash deferred compensation expenses related to the crew pension plan 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. 54 Table of Contents Adjusted Net Income and Adjusted EPS were calculated as follows (in thousands, except share and per share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Net income ​ $ 423,246 ​ $ 910,257 Effect of dilutive securities - exchangeable notes ​ ​ 13,923 ​ ​ 63,308 Net income and assumed conversion of exchangeable notes ​ ​ 437,169 ​ ​ 973,565 Non-GAAP Adjustments: ​ ​ ​ ​ Non-cash deferred compensation (1) ​ 3,952 ​ 4,930 Non-cash share-based compensation (2) ​ 88,393 ​ 91,781 Extinguishment and modification of debt (3) ​ 272,463 ​ 29,175 Reversal of U.S. deferred tax asset valuation allowance (4) ​ (6,830) ​ (161,926) Information technology write-off (5) ​ ​ 95,101 ​ ​ — Net foreign currency adjustments on euro-denominated debt (6) ​ 135,400 ​ (25,837) Effect of dilutive securities - exchangeable notes (7) ​ ​ 19,104 ​ ​ — Adjusted Net Income ​ $ 1,044,752 ​ $ 911,688 ​ ​ ​ ​ ​ ​ ​ Diluted weighted-average shares outstanding - Net income ​ 477,742,311 ​ 515,030,548 Diluted weighted-average shares outstanding - Adjusted Net Income (7) ​ ​ 495,385,351 ​ ​ 515,030,548 ​ ​ ​ ​ ​ ​ ​ Diluted EPS ​ $ 0.92 ​ $ 1.89 Adjusted EPS ​ $ 2.11 ​ $ 1.77 (1) Non-cash deferred compensation expenses related to the crew pension plan are included in payroll and related expense and other income (expense), net.
(1) Berths and Gross Tons are preliminary and subject to change as we approach delivery. (2) Designs for the final two Prima Class ships have been lengthened and reconfigured to accommodate the use of green methanol as a future fuel source. Additional modifications will be needed to fully enable the use of green methanol.
(2) Designs for the final two Prima Class ships have been lengthened and reconfigured to accommodate the use of green methanol as a future fuel source.
However, if any such events were to occur, it could result in, among other things, the forfeiture of prior deposits or payments made by us and potential claims and impairment losses which may materially impact our business, financial condition and results of operations. 60 Table of Contents Capitalized interest for the year ended December 31, 2024 and 2023 was $59.9 million and $56.4 million, respectively, primarily associated with the construction of our newbuild ships.
We do not anticipate any contractual breaches or cancellations to occur. However, if any such events were to occur, it could result in, among other things, the forfeiture of prior deposits or payments made by us and potential claims and impairment losses which may materially impact our business, financial condition and results of operations.
The deferred tax assets accumulated during the COVID-19 pandemic and a portion of the valuation allowance was released related to the deferred tax assets that more likely than not will be realized in the future. We consider this adjustment to be non-recurring as it originated as a result of losses incurred during the pandemic.
The deferred tax assets primarily represent an accumulation of net operating losses during the COVID-19 pandemic and a portion of the valuation allowances were released related to the deferred tax assets that more likely than not will be realized in the future.
Expense Total cruise operating expense increased 4.0% in 2024 compared to 2023 primarily related to the delivery of three new ships in 2023 partially offset by a reduction in air costs largely due to changes in itinerary mix.
Expense Total cruise operating expense decreased 0.9% in 2025 compared to 2024 primarily related to a reduction in air costs largely due to changes in itinerary mix and fuel cost offset by delivery of Norwegian Aqua in March 2025 and Oceania Allura in July 2025.
As of December 31, 2024, we have committed undrawn export-credit backed facilities of $8.6 billion which funds approximately 80% of our ship construction contracts, with the exception of the two ships on order for Oceania Cruises that we have the option to cancel and the four additional ships on order for Norwegian Cruise Line with currently scheduled delivery from 2030 to 2036.
As of December 31, 2025, we have committed undrawn export-credit backed facilities of $12.2 billion which funds approximately 80% of our effective ship construction contracts, with the exception of the two Sonata Class Ships on order for Oceania Cruises with currently scheduled delivery in 2032 and 2035 and the two additional ships on order for Norwegian Cruise Line with currently scheduled delivery in 2034 and 2036. ​ For other operational commitments for lease and port obligations, we refer you to Note 6 – “Leases” and Note 13 – “Commitments and Contingencies,” respectively, for further information.
For example, certain ports have become temporarily unavailable to us due to hurricane damage and other destinations have either considered or implemented restrictions on cruise operations due to environmental concerns.
For example, certain ports have become temporarily unavailable to us due to hurricane damage and other destinations have either considered or implemented restrictions on cruise operations due to environmental concerns. Refer to “Impacts related to climate change may adversely affect our business, financial condition and results of operations” in “Item 1A—Risk Factors” for further information.
Net cash provided by operating activities included net income and the timing differences in cash receipts and payments relating to operating assets and liabilities. The net cash provided by operating activities in 2024 included net income of $910.3 million and an increase in advance ticket sales of $35.7 million.
Net cash provided by operating activities was $2.1 billion in 2025 and $2.0 billion in 2024. Net cash provided by operating activities included net income and the timing differences in cash receipts and payments relating to operating assets and liabilities.
See Note 9 – “Long-Term Debt” for further information. (2) Ship construction contracts are for our 13 non-cancelable newbuild ships based on the euro/U.S. dollar exchange rate as of December 31, 2024.
Excludes the impact of any future possible refinancings and undrawn export-credit backed facilities. (2) Ship construction contracts are for our 13 non-cancelable newbuild ships based on the euro/U.S. dollar exchange rate as of December 31, 2025.
Based on our liquidity estimates and our current resources, we have concluded we have sufficient liquidity to satisfy our obligations for at least the next 12 months.
The collateral of the Revolving Loan Facility was also modified. Refer to Note 9 – “Long-Term Debt” for further details about the above financing transactions. Based on our liquidity estimates and our current resources, we have concluded we have sufficient liquidity to satisfy our obligations for at least the next 12 months.
The increase in 2024 primarily reflects higher losses from extinguishment of debt and debt modification costs, which were $29.2 million in 2024 and $8.8 million in 2023. Other income (expense), net was income of $54.2 million in 2024 compared to expense of $40.2 million in 2023 primarily related to net gains and losses on foreign currency remeasurements.
Interest expense, net was $953.5 million in 2025 compared to $747.2 million in 2024. The change in interest expense reflects higher losses in 2025 from extinguishment of debt and debt modification costs, which were $272.5 million in 2025 compared to $29.2 million in 2024.
For example, we are currently contemplating a long-term charter for residences at sea with a purchase option for a nominal value at the end of the lease period. These types of agreements are being pursued as part of our ship disposal strategy for certain older vessels in our fleet.
We are currently negotiating a bareboat charter with a purchase option for Seven Seas Navigator, which is expected to be completed before the end of the first quarter of 2026. These types of agreements are being pursued as part of our ship disposal strategy for certain older vessels in our fleet.
The increase in Capacity Days was primarily related to the delivery of three new ships in 2023 partially offset by increased Dry-dock days in 2024.
The increase in Capacity Days was primarily related to the delivery of Norwegian Aqua in March 2025 and Oceania Allura in July 2025 partially offset by increased number of Berths in Dry-dock as larger ships were in Dry-dock.
However, there is no guarantee that debt or equity financings will be available in the future to fund our obligations, or that they will be available on terms consistent with our expectations. ​ As of December 31, 2024, we had advance ticket sales of $3.2 billion, including the long-term portion.
However, there is no guarantee that debt or equity financings will be available in the future to fund our obligations, or that they will be available on terms consistent with our expectations. ​ The Company also has agreements with its credit card processors that govern the vast majority of advance ticket sales that are received by the Company relating to future voyages.
Sources and Uses of Cash In this section, references to 2024 refer to the year ended December 31, 2024, references to 2023 refer to the year ended December 31, 2023. Net cash provided by operating activities was $2.0 billion in 2024 and 2023.
As of December 31, 2025, the Company was not required to maintain any reserve funds. Sources and Uses of Cash In this section, references to 2025 refer to the year ended December 31, 2025 and references to 2024 refer to the year ended December 31, 2024.
The net proceeds, together with cash on hand, were used to redeem $315.0 million aggregate principal amount of the 3.625% senior unsecured notes due 2024, including to pay any accrued and unpaid interest thereon. 57 Table of Contents In January 2025, the full amount of outstanding borrowings under the Breakaway one loan, Breakaway two loan, Marina newbuild loan and Riviera newbuild loan, plus any accrued and unpaid interest thereon, was repaid with funds drawn from the Revolving Loan Facility.
Financing Transactions In January 2025, the full amount of outstanding borrowings under the Breakaway one loan, Breakaway two loan, Marina newbuild loan and Riviera newbuild loan, plus any accrued and unpaid interest thereon, was repaid with funds drawn from the Revolving Loan Facility, and the related collateral was also released.
Net cash used in investing activities was $2.9 billion in 2023, primarily related to three new ship deliveries and newbuild payments.
Net cash used in investing activities was $3.3 billion in 2025, primarily related to the delivery of Norwegian Aqua and Oceania Allura in 2025. Net cash used in investing activities was $1.2 billion in 2024, primarily related to newbuild payments and ship improvements.
Future expected capital expenditures will significantly increase our depreciation and amortization expense. Newbuilds The following chart discloses details about our newbuild program. The impacts of initiatives to improve environmental sustainability and modifications the Company plans to make to its newbuilds and/or other macroeconomic conditions and events have resulted in delays in expected ship deliveries.
Future expected capital expenditures will significantly increase our depreciation and amortization expense. Newbuilds The following chart discloses details about our newbuild program.
Future income tax expense is not expected to change materially as a result of the reversal. ​ EBITDA and Adjusted EBITDA were calculated as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 Net income ​ $ 910,257 ​ $ 166,178 Interest expense, net ​ 747,223 ​ 727,531 Income tax benefit ​ (137,350) ​ (3,002) Depreciation and amortization expense ​ 890,242 ​ 808,568 EBITDA ​ 2,410,372 ​ 1,699,275 Other (income) expense, net (1) ​ (54,224) ​ 40,204 Other Non-GAAP Adjustments: ​ ​ Non-cash deferred compensation (2) ​ 2,875 ​ 2,312 Non-cash share-based compensation (3) ​ 91,781 ​ 118,940 Adjusted EBITDA ​ $ 2,450,804 ​ $ 1,860,731 (1) Primarily consists of gains and losses, net of foreign currency remeasurements.
(7) The impact of the above non-GAAP adjustments results in an anti-dilutive effect on Adjusted EPS related to our exchangeable notes for which we are adjusting the impact from GAAP net income and dilutive weighted average shares. ​ ​ 55 Table of Contents EBITDA and Adjusted EBITDA were calculated as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Net income ​ $ 423,246 ​ $ 910,257 Interest expense, net ​ 953,506 ​ 747,223 Income tax (benefit) expense ​ 5,475 ​ (137,350) Depreciation and amortization expense ​ 1,078,755 ​ 890,242 EBITDA ​ 2,460,982 ​ 2,410,372 Other (income) expense, net (1) ​ 178,641 ​ (54,224) Other Non-GAAP Adjustments: ​ ​ ​ ​ Non-cash deferred compensation (2) ​ 2,210 ​ 2,875 Non-cash share-based compensation (3) ​ 88,393 ​ 91,781 Adjusted EBITDA ​ $ 2,730,226 ​ $ 2,450,804 (1) Primarily consists of gains and losses, net of foreign currency remeasurements.
Net cash provided by financing activities was $346.9 million in 2023, primarily due to newbuild loans and $1.6 billion from our various note offerings, partially offset by debt repayments and a net decrease in our Revolving Loan Facility balance.
Net cash provided by financing activities was $1.2 billion in 2025, primarily due to newbuild loans related to the delivery of Norwegian Aqua and Oceania Allura and draws of our Revolving Loan Facility partially offset by payments on other newbuild loan facilities.
(6) Delivery dates may be delayed at the option of the builder, which would result in additional fees. ​ As of December 31, 2024, the combined contract prices, including amendments and change orders, of the 13 ships on order for delivery (which excludes the two ships on order for Oceania Cruises, which are currently scheduled for delivery in 2030 and 2031, that we have the option to cancel) was approximately €17.5 billion, or $18.1 billion based on the euro/U.S. dollar exchange rate as of December 31, 2024.
Additional modifications will be needed to fully enable the use of green methanol. 59 Table of Contents (3) We have obtained export-credit financing which is expected to fund approximately 80% of the contract price of each ship as well as related financing premiums, subject to certain conditions. ​ As of December 31, 2025, the combined contract prices, including amendments and change orders, of the 13 ships on order for delivery that are effective was approximately €18.3 billion, or $21.5 billion based on the euro/U.S. dollar exchange rate as of December 31, 2025.
We had Adjusted Net Income and Adjusted EPS of $937.5 million and $1.82, respectively, for the year ended December 31, 2024, including $(36.0) million of adjustments primarily consisting of the reversal of a valuation allowance partially offset by share-based compensation, compared to Adjusted Net Income and Adjusted EPS of $298.0 million and $0.70, respectively, for the year ended December 31, 2023.
We had Adjusted Net Income and Adjusted EPS of $1.0 billion and $2.11, respectively, for the year ended December 31, 2025, including $607.6 million of adjustments primarily related to certain euro foreign currency remeasurements and losses on extinguishment and modification of debt, compared to Adjusted Net Income and Adjusted EPS of $911.7 million and $1.77, respectively, for the year ended December 31, 2024.
Within the next twelve months, we may pursue additional refinancings in order to reduce interest expense and/or extend debt maturities. We expect the holders of the 2025 Exchangeable Notes maturing in August 2025 will exchange their 2025 Exchangeable Notes for NCLH ordinary shares if not refinanced prior to maturity.
Beyond the next 12 months, we will pursue refinancings and other balance sheet optimization transactions in order to reduce interest expense and/or extend debt maturities.
For example, for the year ended December 31, 2024, we had a benefit of $161.9 million related to the reversal of the majority of our U.S. deferred tax asset valuation allowance.
For example, for the year ended December 31, 2025, we had a loss of $95.1 million related to the write-off of certain information technology assets.
Income tax benefit was $137.4 million in 2024 compared to $3.0 million in 2023. The increase in the benefit was due to the reversal of the majority of our valuation allowance for the U.S. deferred tax assets in 2024.
The decrease in the benefit was due to the reversal of the majority of our valuation allowance for the U.S. federal deferred tax assets in 2024. 56 Table of Contents Liquidity and Capital Resources General As of December 31, 2025, our liquidity of approximately $1.6 billion consisted of cash and cash equivalents of $209.9 million and borrowings available of $1.4 billion under our Revolving Loan Facility.
Removed
We believe that Adjusted EBITDA is appropriate as a supplemental financial measure as it is used by management to assess operating performance.
Added
In 2025, drew down on euro-denominated debt for two newbuilds that is primarily unhedged, and we expect to take delivery of ships that have euro-denominated debt in the future.
Removed
Financing Transactions and Newbuild Orders In February 2024, NCLC and the Commitment Parties entered into the third amended commitment letter, which became effective in March 2024.
Added
Due to the significant increase in our euro-denominated debt in 2025 and the fact that a substantial portion of our debt is in dollars, we have included the related net foreign currency remeasurement losses as a supplemental adjustment in our calculation of Adjusted Net Income and Adjusted EPS.
Removed
Pursuant to the third amended commitment letter, the Commitment Parties have agreed to purchase from NCLC an aggregate principal amount of $650 million of senior unsecured notes due five years after the issue date at NCLC’s option, which option is available through March 2025 and we do not expect to extend.
Added
To ensure comparability, we have retrospectively applied this adjustment to the corresponding periods in 2024, using a consistent methodology. The quantitative impact of these adjustments is presented in the accompanying reconciliation tables within this Annual Report.
Removed
In connection with the execution of the third amended commitment letter, NCLC agreed to repurchase all of the outstanding $250 million aggregate principal amount of 9.75% senior secured notes due 2028 at a negotiated premium plus accrued and unpaid interest thereon.
Added
Non-GAAP diluted weighted-average shares are calculated using the treasury stock method to calculate the effect of restricted share units and options and the if-converted method to calculate the effect of convertible instruments. This is the same methodology that is used when calculating GAAP diluted weighted-average shares.
Removed
See Note 9 – “Long-Term Debt” for more information. ​ In April 2024, we obtained export credit financing for 80% of the contract price of two new Regent Seven Seas Cruises ship orders and two new Oceania Cruises ship orders as well as related premiums. Contemporaneously, the ship orders became effective.
Added
However, the determination of whether the shares are dilutive or anti-dilutive is made independently on a GAAP and non-GAAP net income basis, and therefore, the number of diluted weighted-average shares outstanding for GAAP and non-GAAP may be different.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+4 added−1 removed4 unchanged
Biggest changeThe change in our fixed rate percentage from December 31, 2023 to December 31, 2024 was primarily due to the addition of variable rate debt and the extinguishment of certain fixed rate debt with variable rate debt.
Biggest changeThe change in our fixed rate percentage from December 31, 2024 to December 31, 2025 was primarily due to the addition of variable rate debt proportionally higher than the addition of fixed rate debt.
Foreign Currency Exchange Rate Risk As of December 31, 2024, we had foreign currency derivatives to hedge the exposure to volatility in foreign currency exchange rates related to our ship construction contracts denominated in euros. These derivatives hedge the foreign currency exchange rate risk on a portion of the payments on our ship construction contracts.
Foreign Currency Exchange Rate Risk As of December 31, 2025, we had foreign currency derivatives to hedge the exposure to volatility in foreign currency exchange rates related to our ship construction contracts denominated in euros. These derivatives hedge the foreign currency exchange rate risk on a portion of the payments on our ship construction contracts.
This increase would be partially offset by an increase in the fair value of our fuel swap agreements of $34.7 million. Fair value of our derivative contracts is derived using valuation models that utilize the income valuation approach.
This increase would be partially offset by an increase in the fair value of our fuel swap agreements of $27.6 million. Fair value of our derivative contracts is derived using valuation models that utilize the income valuation approach.
We use fuel derivative agreements to mitigate the financial impact of fluctuations in fuel prices and as of December 31, 2024, we had hedged approximately 56% and 21% of our 2025 and 2026 projected metric tons of fuel purchases, respectively. As of December 31, 2023, we had hedged approximately 21% of our 2025 projected metric tons of fuel purchases.
We use fuel derivative agreements to mitigate the financial impact of fluctuations in fuel prices and as of December 31, 2025, we had hedged approximately 51% and 22% of our 2026 and 2027 projected metric tons of fuel purchases, respectively. As of December 31, 2024, we had hedged approximately 21% of our 2026 projected metric tons of fuel purchases.
Based on our December 31, 2024 outstanding variable rate debt balance, a one percentage point increase in annual Term SOFR interest rates would increase our annual interest expense by approximately $7.8 million excluding the effects of capitalization of interest.
Based on our December 31, 2025 outstanding variable rate debt balance, a one percentage point increase in annual Term SOFR interest rates would increase our annual interest expense by approximately $15.0 million excluding the effects of capitalization of interest.
Additional fuel swaps were executed between December 31, 2023 to December 31, 2024 to lower our fuel price risk. We estimate that a 10% increase in our weighted-average fuel price would increase our anticipated 2025 fuel expense by $65.1 million.
Additional fuel swaps were executed between December 31, 2024 to December 31, 2025 to lower our fuel price risk. We estimate that a 10% increase in our weighted-average fuel price would increase our anticipated 2026 fuel expense by $66.2 million.
As of December 31, 2024, the payments not hedged aggregated €16.0 billion, or $16.6 billion based on the euro/U.S. dollar exchange rate as of December 31, 2024. As of December 31, 2023, the payments not hedged aggregated €5.4 billion, or $6.0 billion, based on the euro/U.S. dollar exchange rate as of December 31, 2023.
As of December 31, 2025, the payments not hedged aggregated €16.4 billion, or $19.3 billion based on the euro/U.S. dollar exchange rate as of December 31, 2025. As of December 31, 2024, the payments not hedged aggregated €16.0 billion, or $16.6 billion, based on the euro/U.S. dollar exchange rate as of December 31, 2024.
Derivative positions are monitored using techniques including market valuations and sensitivity analyses. Interest Rate Risk As of December 31, 2024, 94% of our debt was fixed and 6% was variable. As of December 31, 2023, 95% of our debt was fixed and 5% was variable.
Derivative positions are monitored using techniques including market valuations and sensitivity analyses. Interest Rate Risk As of December 31, 2025, 90% of our debt was fixed and 10% was variable. As of December 31, 2024, 94% of our debt was fixed and 6% was variable.
We estimate that a 10% change in the euro as of December 31, 2024 would result in a $1.7 billion change in the U.S. dollar value of the foreign currency denominated remaining payments. Fuel Price Risk Our exposure to market risk for changes in fuel prices relates to the forecasted purchases of fuel on our ships.
We estimate that a 10% change in the euro as of December 31, 2025 would result in a $199.9 million change in the U.S. dollar value of the foreign currency denominated debt principal not hedged. Fuel Price Risk Our exposure to market risk for changes in fuel prices relates to the forecasted purchases of fuel on our ships.
Fuel expense, as a percentage of our total cruise operating expense, was 12.3% for the year ended December 31, 2024 and 62 Table of Contents 13.1% for the year ended December 31, 2023.
Fuel expense, as a percentage of our total cruise operating expense, was 12.0% for the year ended December 31, 2025 and 12.3% for the year ended December 31, 2024.
Removed
The change from December 31, 2023 to December 31, 2024 was primarily due to the eight new effective newbuild agreements, which excludes the two ships on order for Oceania Cruises, which are currently scheduled for delivery in 2030 and 2031, that we have the option to cancel.
Added
The change from December 31, 2024 to December 31, 2025 was primarily due to the addition of confirmed ship construction contracts and an increase in the contract prices of our Norwegian ships to be delivered from 2030 through 2036 offset by the delivery of Norwegian 61 Table of Contents Aqua and Oceania Allura.
Added
We estimate that a 10% change in the euro as of December 31, 2025 would result in a $1.9 billion change in the U.S. dollar value of the foreign currency denominated remaining payments. Additionally, in 2025, we borrowed debt denominated in euros in connection with our newbuild program.
Added
Net gains and losses recognized in other income (expense), net from exchange rate remeasurements on euro-denominated debt were losses of $135.4 million and gains of $25.8 million for the years ended December 31, 2025 and December 31, 2024, respectively.
Added
As of December 31, 2025, the total aggregate euro-denominated debt balance not hedged was approximately €1.7 billion, or $2.0 billion based on the euro/U.S. dollar exchange rate as of December 31, 2025.

Other NCLH 10-K year-over-year comparisons