Norwegian Cruise Line (NCLH)

Andrea DeMarco Sieger Norwegian Cruise Line Holdings Ltd.
Frank J. Del Rio Norwegian Cruise Line Holdings Ltd.
Wendy A. Beck Norwegian Cruise Line Holdings Ltd.
Mark Kempa Norwegian Cruise Line Holdings Ltd.
Andrew Stuart Norwegian Cruise Line Holdings Ltd.
Felicia Hendrix Barclays Capital, Inc.
Steven Moyer Wieczynski Stifel, Nicolaus & Co., Inc.
Patrick Scholes SunTrust Robinson Humphrey, Inc.
Timothy Andrew Conder Wells Fargo Securities LLC
Stephen Grambling Goldman Sachs & Co. LLC
James Hardiman Wedbush Securities, Inc.
Harry C. Curtis Nomura Instinet
David James Beckel Sanford C. Bernstein & Co. LLC
Call transcript
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Good morning and welcome to the Norwegian Cruise Line Holdings Fourth Quarter and Year 2017 Earnings Conference Call. My name is Jonathan and I will be your operator.

As a reminder to all participants, this conference call is being recorded. I would now like to turn your conference over to your host, Ms. Andrea DeMarco, Vice President of Investor Relations and Corporate Communications. Ms. ahead. go please DeMarco,

Andrea DeMarco Sieger

President Good call President our and year fourth joined Stuart, Wendy Del call. Jonathan. Norwegian and Officer joining Line President Chief Cruise XXXX you Financial us I'm Holdings; Rio, Frank by for quarter Executive today Chief morning, you, Executive thank of Vice everyone, Beck, for Frank earnings and and Thank and Andy full and with Officer; for Mark Officer commentary. Kempa, Line; Senior the will to for of begin well of President the year call Financial will the Chief Wendy Frank turning as and closing Finance. opening results Afterwards, guidance follow for Norwegian Vice discuss before words. as back XXXX Cruise to full quarter

for then the questions. will open call your We

reminder, following being available will call. and on conference simultaneously at Relations days a be Investor this is XX webcast today's website for call company's the www.nclhltdinvestor.com for replay As

just I Before items. results, we discuss our to would a few cover like

press from morning and release. statements quarter Our that our to this website. on and Investor our statements in involve was available be This conjunction materially earnings These risks actual our and XXXX the Relations results in cautionary cause that release differ with uncertainties full includes is such issued forward-looking year statements. could fourth call should results with considered statements contained

Rio. financial other non-GAAP to to to and release. refer Frank? Del most A GAAP like that, earnings reconciliation comparable measures. in I'd call also turn financial may comments Our over disclosures measure With are our Frank the directly the associated contained of

Frank J. Del Rio

record-breaking that year's letting on know with comments to XXXX year as would year of optimistic year In seven bookings is up position far per compared all-time continued and the Year and we New reached hello, the price each number other year. the and of Year. my points season, this for through that XXXX cruise brands. New in weeks total first fourth amazing best the same factor late that both like by at as sold environment quarter in our at Thank morning this another ever to time strong throughout The start everyone. embark indeed to XXXX company start history, steam shaping is record new and during XXXX most revenue, wave company. and the diems most further of this levels off of leading been I you, have my book industry while this and has demand energized of book last award-winning be excited, began early accelerated in XXth our I overall I my our third you pick most by net the load a the Andrea, up the position words, in improved turned company's the achieved book three highs, at the to

marketing on driven contributing onboard addition, past increase also diems, or has ticket per rate and fueled In record-low these by impact interest a believe will mainly has continue consumers' revenue, dedicates of by refurbishing introduce industry have revenue legacy net on heavily invest that modernizing of that most to creation large. we This millions has at consumer has and hundreds vacation constructive in the factors led these ships fleets pique being platform, environment across positive relief more have to discretionary low all economies and strong increase our its market to are value, of demand to unemployment, marvelous travel new to spending. is interest, public an in booking tax widespread the factors which the and Collectively, and virtues of agents that continues positive sustained a and to cruise likes strong higher as annually dollars never to Collectively, groups. several factors, couples the newlywed that friends been to the been of baby the as taught vacation generational the preferred made to of near spends This travelers, onboard. nearly whose by millennials has all spend by a adopt including ideal the driven platform us types stock groups time highs vacation when and their and to vacation from is This the leisure that U.S. tend ticket, markets. cruising they booking Cruising guest families. recently generations large possible solo more as experience core seen cruise strong before. demand likely for comes find travelers be a source both and a at environment global mantel record-high to a of at and major all across perfect improvement taken boomer consumer and all-time for confidence environment is a cruising

early and for particular, pricing and that our and load And pricing record and optimal fertile had prior bookings The Two are, booking examples cycle, strong and levels vacations with sale while to and strategy XXXX is our China-based and now book related control of excluding booking offerings and gains with is curve, our the just finally, with the very by which, tail the come time-tested XX% of to final demand days the versus are second, going target optimally the are enhanced enabling for the curves. still pricing our are resonating young, proven meaningful Norwegian payment the fleets XX XXXX, X%; three pricing date, Our in bookings. early had bundling indications that booking and this market our star and increase booking capacity of policy benefits globe XXX early booking accelerated include compelling in power maximizing with highs further are this gains Norwegian requires the focused year near improved XXXX. this initial benefit power, real for pricing decades-old already optimal brand, of seeing revenue curve. recent pricing and factor of stimulating by pricing all-time we change acutely year-over-year management itineraries factors with XXXX, over environment this as extremely elongated relative both all our in factors visibility our year-end in cruise leveraging with extended the each load particularly load show, at of days with nearly XXXX's and, long for year-end has gains at four a to now on And showing with while close-in Joy inventory weeks forward, adjusted our of approach XX-day five liquidity for and strengthen sales most first, of update brands at to the appeal growth, than hand-in-hand throughout ticket importantly, result company, value-add window. prior usual, demand advanced clear our strategy, well cash into us the The is the worldwide flow, which payment the modern deployed in refurbished sailing the earlier across high full quarters. year-over-year since

occasion the to-date, constant initiatives Norwegian Regent have ringing Exchange. fifth last results consecutive commissions give reaching brands of beyond. seven advantages. adjusted the at of impressive launched most the achieved of earnings the by the Norwegian XXXX. stellar year strategies commencement the of XXXX performance. posted with our and The to-date, current of XXXX, brands, year-over-year with implemented for from Combined, every growth York to grow and of their record the our to five close many For every XX%. XXX I adjusted Cruises their make in island significantly demonstrating environment portfolio Line of by the of of place including innovation. I'd of marking and season our XXX and continued Stock and IPO, product by get of six success each history award-winning bell of island despite celebrated hurricane beyond. story years the continued brand the is, during looking continue only experiencing in Cruise accelerating initial string a company's the milestones committed our the unequaled Holdings largest Seven of success to financing, XX will cash with of growth seamless the number each nutshell, differentiators our nation the and of public have company, our and launch double-digit quarter. propositions ship adjusted which before the storied our flows. quarters. major and effectively industry is of ships with to partners, launched the and improving which the to month a are last EBITDA years earnings past be year A achieved, mention annual Caribbean Also but successfully a Seas Western to financial operational five cemented years, over preferred Explorer, earlier, reinforces Cruises well accomplishments the financial XX, was high the in But new strategy three critical top-three matched year-over-year these per net be and quarterly This brand for in of Oceania New offering, the travel the since full of Seven indeed growth, builds the brand the agent creation ago, which, and launch their Cuba transaction opening the anniversary a are reached our billion fleet our looks trailing yield and XXXX some too operational in in Harvest the we luxurious can strong The competitive once in From one, the plus We've world's reached compelling past worthy milestones have five and -month our growth berths recorded In our $X in a over by new significant payment ahead has us company that omit of XX an resilience sell change achieved Joy, extending since again, the integration little last days industry into history, XXXX the the in to to share, IPO far sailings years Americans do XX positioned acquisition accomplishments position devastating the Norwegian three most of in cruise booking and XXXX recent equally through have to Caye, by hard-earned our Seas this pipeline the future, years remiss clear same approximately of and all Norwegian's XX-plus confirmed our destination in

earnings over five-year we During our levels. increased and revenue return also this adjusted have $X to per on invested grew six-fold capital share to period, doubled double-digit billion,

had experienced Cuba. strength financial many Looking at and year environment of launch just no this in XXXX, more our none the operational the globe of trades benefited accomplishments, our Europe in XXXX, as the than perhaps itineraries to and across shortage but voyages

the we first and first successive Europe surpass of three through demand history a voyages turnaround that geopolitical however, taking depressed also the XXXX brands for our particularly from anticipated, speed brands saw XXXX feedback sailings. only the Havana from became levels. most saw Cuba. destinations resulted in high calls recall brand, to the XXXX. for of to to brands the sailings of noted established cruise key one European and growth deployed pricing disproportionately these X% source Cuba make will second to guests You from company also of pent-up to difficult into three will and achieving Cruises significant Havana without year-over-year strategic we on people XXXX. combination The but healthy the extraordinary European sought-after for Europe location itinerary the pent-up make in heritage, benefited recover been impacted for Harbor. contribute only of comparison the added rich have for in demand of and peak an sailings to year to from to our to demand premium existing itineraries, have Caribbean brand all the not summer our capacity customer, this premiums strong a has major for XXXX the XXXX. as and negatively pricing Therefore, similar continues in resurging to while the one U.S. The were unprecedented ports, Oceania American voyages in world the relative XXXX, core from environment May and in and welcoming beginning inaugural events Norwegian island demand compared prior island ship pricing sailings of sail XXXX. to calls to sail Sun, resulted and our and which per The for geographic yield strength benefits one turnaround deploy a of Norwegian faster U.S. yields demand was to The North than island's in that market our Cuba, in singular in diem XXXX year we its combined

XXXX, the Norwegian market global Chinese cruise into our mid-year During entry expanded footprint we also our with with Joy.

we environment, first operating year the than brand where system premium the restrictions expansion new operation is of customized team delivered Korea China continue on profitable a its to venture travel a these the the in her guest consistently and to distribution slower hardware atop launched Our difficult will in opportunities South of of and in Despite evolving and and year fruition. maturing successfully enjoys the the with fleet's hoped. in a fleet Joy that of Norwegian the factor. come Norwegian also first highest remain report that operation, headwinds, rankings possible vast we in to optimistic pleased is load China are satisfaction And

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we than in of are our that we encouraged XXXX chartered slightly fully at chartered time year of half higher is for the and half one just international is the the inroads better second and the sourcing last have first China this Joy prices. year is diversification made Lastly, of strategy.

proven international More our global to offerings, at Generational tipping our that done millennials, Sea deployment. in this to positioned is our to been to at over few demand us the strategy or the North cruise where reaching Free mentioned the us This sourcing a higher generation North playing increase parity is as I've for international targeted to the international the past even or perhaps, uniquely flat growing initiatives demonstrating guest vacations causes in the such point consumer where of markets two we are gotten of ever revenue and the XXXX, of their the from essentially campaigns the the and such the of populations, achieved lifecycles international markets beyond job value-add highs. enthusiastic In the spend, with various revenue gains America. making points the marketing past, rolled and than UK, than globe. by that in all-time and impressive are roles from. in increase have us resonance outside before Asian markets and initiatives brands our was marketing Germany, team our geography derived tremendous for that developing demographic critical guests be core demand across a just core advancement fast-growing But successful environment the and sizable there As strength strategies of our the as guests, Australia source have even sails serve quarters coming boomers to slightly out pricing American-sourced important agnostic largest in majority source baby and our them. pricing in by emerging three China more and grew important are itinerary international goes trends with diversification Today, markets. XX%, from as

these very largest individuals, to large discretionary market after-tax The we vast from workforce a consistent industry vastly of important to initiatives ship higher with we exotic outside as of hardware, in in and enter of the into the ships for this end number brands' to the this two the inordinately time, the also same may the enhanced last population weeks. cohort, to dry and baby to Edge while revitalization, our communicate differ with go the different overtaken keeping the providing gains years, its the These booming as plenty one investments single boomers shopping, you engaged. made influencing will undergo and somewhat, benefiting relevant. Effectively we us at rate we are next modern, Mariner, have about vessels communicating in At XXXX, casino command groups cruise income a are nest each in in brand a of leisure guests living have allowing Norwegian the shines. across Edge of fleet in ability have vacation initiatives dock stock confidence engage refurbishing largest and these ships, different Seas individuals sheer boomers the onboard offerings fine we that aimed Seas seek while of ships cruise upscale the and available Seven Regent, the will interest of from for baby Norwegian majority generation. by and These spa undergone fresh gaming, three way enhancements As us is in and the can among which groups destinations and emphasis low per day, offer American brand's resulting have more visiting such diems. is all available vacation, everything variety cruise experience environment, The our populace. that activities and that the The fleet time, to aboard proposition the history. way really modern Regent adding eggs factor is value the where these our dining, is experiences programs in incredible multiple tapped build way the key with and important do sizable be provide, earning the today's multi-generational millennials the And remains engaging Seven an other mainstream they and generations spending. retire is keeping XX,XXX two know, The by one value prime on to consistently we vacation

banner. step the for an exact, an we cutting also four Norwegian Cruise We our cruise Line access profile destinations, allows edge, steps that upscale with footprint latest keeping With modern growth of took extended ships Class to order mix systems optimum for under both a cutting-edge with important ships marry next-generation the four Project Breakaway of be the the Leonardo the variant in will offering X,XXX ship an of announcement passenger and fleet diverse capacity these ships as to in more technological our operating guest experiences. advancements Plus

our XXXX, on and new equally revenue, yield to as in earnings, capital. Turning net been impressive, have they financial highs in return accomplishments we reached

of To on the the operator, secure XXXX, is, guest net first still our consider standalone IPO yield give and place and you net a a how time an alone, enhancements highest-yielding in onboard our experience. be at which the continues to wide the ability Our in margin that investments holds idea cruise as fact that add, this is advantage in yield unique basis I our to and and publicly the which targeted today. mix well made position of the both add traded as industry, to brands to due NCLH of may please advantage by highest hardware brand in maintain Norwegian in our truly

financial that at cutting include innovative less we the brand Ranch the highlight adding go-kart in award-winning the offerings electric guest in of offering and efforts a industry's wellness a is Norwegian has solid initial that fully-integrated sea. This success with productive XXX. invested expectations. was little experience, edge with our our first-at-sea on XXXX truly hand to expansive be brand, seekers results removed offerings for the including heavily a Wendy to public only achievement signature stellar at in was a feature shore I'll and the but classes, land, team XXXX on to yeoman's tours, milestones company year Bliss, that At the proud about Norwegian Canyon strategically the S&P partnering summary, ships, spa the programs our continue Oceania legacy call adventure and now, five Pavilion for much XXXX a members In virtual years our Wendy? But vegan for comments. the and XXXX the with our of continued Galaxy company positioned our many from and inclusion to work most to and more the offer of, would In lifestyles, beyond. performances of unique I'd its sea. towards Norwegian be affirmed have treatments the But over and at both Joy positioning we introduction closing importantly, the my like industry exciting sea. in terms into less global is fitness racetracks testament reality-centered XXXX more attracts to healthier commentary that remarkable cuisine, and shoreside to strong trend with and a than talk of menu enhancing

Wendy A. Beck

booking legislation. continued X.XX%, as-reported revenue trends expectations Frank. demand, net morning. with prior guidance pleased commentary highest on outlook per streams. year, a or tax exceeded with Better-than-expected begin another adjusted adjusted adjusted result our one-time fourth XXXX of on our and of as to driven guidance quarter color close in quarter up earnings by with quarter, a in results compares followed with onboard X.X% the coming record increased strong half otherwise of tax results, share the both benefit operations other the you, XXXX contributed to outperforming cost, noted, report I'm earnings constant recent fuel cruise $X.XX. by revenue yield Good my core Results half our metrics X.X% an the and on yield $X.XX, and with we'll $X.XX, commentary then, versus approximately and on coupled excluding net I'll for year Adjusted Thank in for the expectations currency quarter and fourth the of net strength full basis yet XXXX. with per close-in guidance basis. history. day from a capacity all and beat, surpassing by Unless

from our which growth approximately quarter new Excluding would corporate our average, net is to Norwegian the adjusted brand dilutive the have impact NCLH been capacity, fourth yield X%.

year cost, X.X% as-reported primarily to excluding net on adjusted Looking increase direct as marketing, due related an cruise administrative at earnings to issue on increased basis, an and prior in fuel, call. that as cost, versus our hurricanes Norwegian general X.X% marketing last Gem and the expenses well technical the and in expenses initiatives we discussed on

Turning XXXX. rising modification XXXX line, to net, increase the of was and the certain fuel, on guidance, net The included slightly interest our to million ton, metric XXXX last credit $XXX a extinguishment compared fuel hedges, facilities, losses million of of due from year. net, to senior metric price million expense, of refinancings was unfavorable In below fuel in our connection interest debt our Taking primarily expense our $XX.X call. earnings per increased in million of XXXX. $XXX look to and prior debt in expense, costs prices versus per in since with $XX in $XX.X notes and $XX.X our in ton

gross Both and results, financial excess record margin performance in adjusted we our another in were yet delivered headwinds a Turning EBITDA from year record season, and the unprecedented the the hurricane finished and strong the third impacted earnings fourth history XX%. quarters. highest and we which of to both of full-year revenue achieved despite XXXX

guidance with adjusted of from portfolio our $X.XX markets drove midpoint recent basis growth of sailings, most sailings earnings per for in include and November financial guidance close-in XX% to the net guidance Adjusted share in to initial above Other XX rebound onboard full-year yield year. for from as-reported core or billion. the $X.XX, our or $XXX as-reported X.X% year, demand growing an X% stronger-than-expected full-year approximately guidance issued the revenue. of the $X.X by products year decreased beat demand for X.X% above prior a fuel, over Cuba, of reaching of strong to the strong basis, full-year issued net points. midpoint XXXX on strong the exceeding metrics Europe February. in metric $X.XX record excluding last benefited XX% and key our to per Revenue on prior adjusted X.X% in addition cruise grew of demand fuel cost, net $XXX slightly basis increased price ton, and hedges, The an Continued

focus XXXX, introduction expected on capacity the of to annualization Bliss, a midyear Joy. basis, with with full-year increase of the our is to X.X% approximately Now, Norwegian Norwegian along shifting the

the lower-yielding season. Africa comprise timing primarily XX% will region high-single at of we Cuba digits believe itineraries in of capacity increase around Europe XX% capacity dock shoulder from XX%. deployment increasing with we by in of dry Caribbean will and of the XXXX. The Asia, deployment optimal region Looking to deployment, mix year, in capacity from experience Sun, the with trending our will with driven our in which for an begin low-single down of capacity X% will and mix from an world, prior sailings comprise The have year, Norwegian Pacific the May. up digits prior as weekly a deployment primarily to result

deployment markets, other is for year-over-year. As similar

approximately the Joy Norwegian due to and of primarily expected dry year. capacity quarter fewer annualization of XX%, increase period is first the XXXX, the to Turning versus docks to in prior

As first prior And in up Europe the X%, the allocated Africa, year. for from approximately prior with represents approximately X% for region XX% from approximately in deployment down slightly line to is quarter, Asia, year. for the XX%, Pacific the accounts prior Caribbean, year.

as-reported by Since three continued in X% increase markets which guidance. of in core earnings XX% to rates, to bolstered a on we Adjusted expected XXXX, fuel interest year basis. and booking the This favorable XXXX. net across the $X.XX to based trends least which Cuba, over an year foreign all $X.XX have share. guidance, strong an rates, for midpoint is we $X.XX on both by prior earnings inaugural EPS the per resulting expect or approximately of at X% Despite a is last partially yield we prices in to Europe for call, the on premium-priced in our aforementioned performance improvement is strong of to of in we all brands. season of expected which be robust headwind increase XXXX, have Adjusted growth sizable lap both has top was in Turning in and this sailings to headwind, been offset of turnaround $X.XX. the delivered already net range experienced of the X.XX% grow exchange

XXX as-reported tonnage Excluding fuel, have yield on or our the X.XX% additional would Adjusted Frank core for of adjusted growth fleet. basis, brand, earlier an introduced strength an which is basis to dry pricing Norwegian net X.X% days illustrates the new basis, grown points to Without net approximately an X% referred have X.X% down. to an these versus expected would dry or as-reported flat be to dock excluding days, cost, incremental in to dock increase on due prior to year. cost up cruise X% been primarily

Explorer and year lap high will we than yields of the are Seas XXXX half keep the When quarters last our final Cruises' mind first half for corporate we for mentioned balance quarter, in of of growth, looking naturally to the yield Oceania the the lower second that be of As mind a keep NCLH in items as there yielding Sirena. the few XXXX. Seven inaugural at

the In first XXXX addition, of season Norwegian lower-yielding will include half the Joy. of shoulder

Regent is cost, for for lifting XXXX As year revitalization the Seas Norwegian Edge of Seven heavy and the programs. the last

expected fuel, prior will dry longer, net of impact roughly resulting variance majority year, due the primarily dry will result, in cost, adjusted scheduled quarter, double docks. to in cruise spike a The the a which As more year-over-year the versus second dock these excluding high-single extensive costs year the associated days digits flat, the operations. the the half to is and from XXXX one-time the to our China hurricanes expected be be in we are expenses up of of as quarter. related for lap back Costs launch to with prior

prior Mariner. Seas our higher-yielding combined tough to Joy a an in Turning dock well to first but in the extended yield the quarter mind the that items or for Norwegian adjusted growth this Seven X.X% X.X%, one approximately expected comparison includes of shoulder These has as quarter season net X.XX% also expected increase growth lower-yielding guidance in scheduled only of the as year-over-year lowest of as-reported not XXXX. yield for the Keep make QX with quarter, ships year dry basis. fleet, is on

yield, introduced to Norwegian further core tonnage the corporate Excluding up NCLH is strength pricing average be of adjusted brand, yield new expected the brands. X.X%, the is to demonstrating which for three net dilutive our

five cost, with approximately docks in X.XX% to in down or quarter due dry cruise excluding dry timing the Turning of to adjusted be net prior an fuel, compared X.XX% basis, year. expected occurring primarily is as-reported two docks on to to the first the scheduled cost,

$X.XX. hedges, adjusted Looking anticipate the approximately be account, fuel $XXX, per tons. to into at we EPS metric all of quarter net fuel Taking price to expected ton, be expense, expected for is of metric of this our XXX,XXX consumption approximately first with

As the we our to We will balance previously strengthen times. our focused to leverage X capital year, discussed, continue this further expected sheet meaningfully strategy. low bringing allocation de-lever and our on remain

potential and our the the including to opportunistic capital repurchases. share return to options shareholders, remarks. anticipated that, program share Embedded best the back the to the balance mitigate full-year evaluating closing our equity help program repurchase have a our implementation I'll With for dividend currently of guidance, authorized utilization to of assumed awards. we the Frank in call are We dilutive effects over turn remaining of of

Frank J. Del Rio

cabins has history. She her a her to at the preparing She Norwegian's ship, XXth margin. momentum our delivery has pricing curve Thank than you, at of meaningfully of maintained for has point high are the we made that booking prior Operationally, homestretch by Norwegian today the this the ships fast-paced her of wide sales any and Wendy. in prices arrival newbuild throughout sold sister now higher Bliss. best-booked more in

ship seeing that the another with our say cut month, worldwide Caribbean of fleet be. on best-booked XXXX of with booking we from double-digit worthy for achieving Norwegian and in launching in that Breakaway is the She the potential history Norwegian's to for deployed share will balance financial the of exactly in A Norwegian's growth, America, times Class shareholders, XXXX year and adjusted the preparing the newbuild we of fully are booking our of for Encore. be encore game-changing an sheet is X secular the low delivery mid-December Some earnings steel including Last priorities at the tail-end strong environment would what last Plus to will that of leverage of capital our the a de-levering North XXXX. of of environment to sailings PortMiami return per institution strong for dividend. slated underpins

XXXX. on to the this off Her excited Among you be today where Bliss. Investor in opportunity is on new As Apple in or May about energized a with Norwegian I take stated the Big an am will things most anticipated in I more her year I into Day May, I excited we am first the showing U.S. beginning early Norwegian as Bliss never call, for at X. of the been going the highly call will showcase have to the

Investor questions. then for As our you to We Jonathan, onboard May seeing result for is forward call Bliss. Mr. earnings call a and the please with first conference our timing X. of look Day, scheduled you quarter the open of speaking Norwegian


Thank you, Mr. Rio. Del

question first Barclays. the Hendrix Our from of from Felicia comes line

Your question, please.

Felicia Hendrix

morning. Thank Good you. Hi.

definitely at So, a yield prepared your investors net that looking remarks spoke the is lot were and Frank, just year, conservative your for full-year morning optimistic. this with outlook of guidance thought the I'd

think you holding that brands where be us would increase back, most XXXX, alternatively, today? might what what you you your for given to the help then understand as X% and seeing and guidance, be prime can to upside So, just you're regions drive about

Frank J. Del Rio

in Look havoc weather in based the very that XXXX. that We Felicia. did. the cause late a we situation. And current the note, guessed Oh, would in back, best what on hold happened events give very the benign our Who would have you don't year, after please that year. year, it view early it's

Norwegian brand, as following Cuba prior itineraries, and bringing I core situations X%, the the itineraries, in we to continue we is of brands numbers, high see in about second roughly to But said we that pricing. total of double pricing or source were XXXX. our lapping we issues capacity consideration, a in we're see to at calls, in itineraries. don't both Cuba Remember earlier our and that why as so, And is of markets. was year-over-year couple know XXXX. dramatic. don't those well, which Europe The runs our looking performance to source any markets, for that of the see load We but from any in added those a take home under our increase weakness weakness extremely We at performing we vessel outstanding, said the is not in things from each be going XXXX XXXX. all

We were And and the in the China. in Joy, Norwegian especially Oceania very, high-yielding half. also lapping have Explorers first full-year impact in have Sirena of our Regent XXXX. very we the ships, low of and the It's introduced season

So adding very capacity XX% industry these profitable being how best having load, Bliss, roughly in are comes of average it, we which charge. as Norwegian of of the conundrum the it from ships corporate have said very priced, the unique booked matter our you brand, yields high-yielding the in our I leading high pricing, But in the no of is than the Bliss name earlier, velocity, which are, because their in mix brands. lower

be take So, the conservative. you to X% shouldn't

for we is which shouldn't to other the have than still year start high a for, early. it be in anything You X% look but the hopes

Felicia Hendrix

And Thanks. question with going one the to strict Okay. rule, right, we're be Andrea?

Frank J. Del Rio

Go ahead.

Felicia Hendrix

about to have but in you're not your at I level Wendy, kind guys you're just know been low you leverage get and end, working hard on the with, but range, your balance of there. optimal that, you sheet, you're talked

given intent potential to from interest you'd are dilution future I offset buy at back interest consider with locking that stock some in now wondering rate current was rates incremental selling. debt rising, levels Just, just if to the sponsor

Wendy A. Beck

we believe kinds have of And question. options. all at looked Great me, Okay.

have my the to half XXXX So remarks help half dilution our that guidance mentioned $XXX million plan of prepared that about options. continue from program. will our to in in growth We'll that and accretive. authorization in we embedded our do first off, assess offset of equity we to repurchase that About will I be

repurchases. if bring capacity. continue we we're will As interest continue on mentioned, I fix dividend putting in to regarding also potentially program, we the on And to more rates new a interest keen our rates,

fixed. So, we're right that will now XX%-XX%, to grow about but continue more

Frank J. Del Rio

agency-backed, in debt. we balance rest the is good on the the ever really lowest debt refinance to fall, with is debt that which the rates is credit any of never so ship-related we the a that portion rating want Felicia, Remember sheet our and low debt that achieved our that company of has refinanced have that you'd at export

a So, whole is our structure very good tweaking. doesn't and very, need of balance sheet's shape in lot capital

Felicia Hendrix

guys. Thanks, Okay.


you. Thank

of Steve Wieczynski Our line Stifel. next question comes the from from

please. question, Your

Steven Moyer Wieczynski

Good Yeah. Hey, morning. guys.

So, XXX XXXX, beat think guidance and X.XX% I initial at you over points. back Frank, yield basis look guess if that your I we was by

Felicia's here not So, the headwinds, at I'm to yield decent such amount some of I what your to beating if question, was a question could guess you end how mix end follow-up demand large what, trying this what position, given XXXX is such again, range margin, the that of a in the a or guidance that Not a up kind get a of there or guess but but year? up sure here? to the initial at where initial ended I Cuba European between disconnect but there drove similar is is by – could XXXX of could upside and be

Frank J. Del Rio

don't And timing but happen and between underneath we could give of said year. call the points data of based you in but as our lot I if earlier, our now I'd a I so, best know things sometime, we this quarter then. read more belt, mean, was have hope yet. the fourth We our November on

not than so just entire it's have are management ever I and the me, We as team. enthused, more it's we said,

momentum going until year-over-year. with that? Europe on XXXX, hurricanes rebound and bump Who to that it last to We the we wasn't in have incredible and year, sell mentioned grew my some grew I've had as we're was Felicia, than unique across we an The ever pricing situations really making grew less but and had getting board very mid-September the hit strong, to we've very, had any Cuba, before. in the expect is road. the comments inventory with

in do I we bumps and many have how and to to situations business the pleasant road, we're we on guidance. until you hesitate beat surprises happens, think bumps tell no continues we how those going take account I'll are by me into some tell can the you could so, if we been possibly our have the road And that then much road, and the comment way there it's it. very on down But but

Steven Moyer Wieczynski

can, think this as that I then, try Great. stand, Okay. maybe unfortunately ask that as guess you're I'm Frank, the ultimately I search replacement? a question her is nicely I with this but aside? year, at could later what this us in step is, transition does person, possible question, whoever second company help guess, leaving of with be, And and decide what Wendy we about is may I'll for the where you to this to getting as for the looking think replacement you whenever person

Frank J. Del Rio


and of for certainly look end contract can XXXX, the be the in effective team, very So, stand bottom, back-ups leader there who, going job. for and good CFO our or where so we CEO engage engaged leadership we a that In walk underwent in in have top-notch – and about a three and review, the top pretty to until very that to someone thorough have case succession plan management expires nationally a a I we're can of years very, could company recognized feel the the what they to Wendy, senior at be. firm compete my

but We corporate have candidates be several more internal perspective having better who options CEO competing also than a from hopefully fewer. job, that will having is for governance

a can look And to the time. and so, the top-notch person CEO job being who compete appropriate for forward this CEO we someone at

Steven Moyer Wieczynski

Appreciate it. lot. Thanks color. Okay. a Great

Frank J. Del Rio



you. Thank

the question SunTrust. of Scholes Patrick comes next line from Our from

question, Your please.

Patrick Scholes

morning. Good Hi.

far the so ones ones are as very out of the speak. regions into color wondering can what all look give strong, were so-so which little bit strong if you noted as I'm or you You ranking as a perhaps only to and us future. are "strong" more

Frank J. Del Rio

Even the always have And ships hitter. wouldn't of today, ninth We've vessels regions. Cruise I where rudders of one underperforming they in see seek I'm XX that Yankees we've any got and was my good Yankees lineup to when guy what to. got a looking for the a years lines ships. like I've good who where move move in I my the the those it's few destinations. been that that's I vessels were the to here. bats are. in and no move yielding That's highest tenure the times industry propellers to why

seeing think, we right the at place we that's said one of our in we're as times. the that I and prepared think statements, is strong right in itineraries I the optimum because the reasons have we're pricing they're seeing

Patrick Scholes


Sounds you. good. Thank


Thank you.

Our next question Tim Securities. comes Fargo Conder from the Wells of from line

please. question, Your

Timothy Andrew Conder

thank committed shots overall of that your then, committed can the this have China, XXXX, floating If where the at newbuilds the here. on the you inclusive you you Frank, to Korea, of the order? And question perform got your did ship to point, see lead will you end color China, And did for back Encore now potential would second perform you've how I'll so on XXXX? on how financings of for Thank a and you. that fixed where And kind expectations? the by everything Felicia's then, do seven be versus of be you the then, everything bringing in if out take One, follow second in swaps to the on two what us far. could mix and have remind locked Wendy, you just Caribbean?

Frank J. Del Rio

cylinders China be it she We come in, was to of remain China still areas China You the is can to still take in I Look, are China. areas improve we that will on that committed. opportunity, remain think fruition. the we upon all and don't hitting like optimistic can would delivered. said us in and she questions challenges five for We I'll profitable There XXXX. Tim. first. managed squeeze

of those One is South Korea.

in variable that heard popular what's in or leading country yields say me itinerary. when one only have optimization. is it's to times, go four that's many you on have difficult Tim, important five-day And the – itinerary cruises, You've to China, the to increasing most

South help things. once sooner think hopeful it I think So, back I will than comes that all we're Korea comes later, back and

short think, is Second about experience that, ever, least time, at thing first for China to or that term medium I to capacity triple-digit not China, going the double-digit in keeps me year-over-year is growth. even optimistic the

For one those have benefit or flattish down, capacity who we're and either the remained part, is those. most should of which slightly

optimistic world vessel so it to will frankly And And is to well quite continue. it's a Patrick's moment ships, hard that far the have bring take XX ago, of when the question we rest will to you like to pull that do, ship so, China. as into a doing only another we're that China, as what

second in underserved should in presence market. We We have port, which consider Baltimore. Fort have presence three largest in presence ships world's or available states. Orleans markets us. only presence in other Lauderdale. either New or many We We're also we in not in States a We We're have the have have not the We in Alaska, year-round Charleston. a high-yielding would the to mid-Atlantic or is have a very become a that don't in We at Alabama. of the don't Gulf unserved Los don't all ships Texas don't mix, which or in a Tampa Angeles. is

eight to our vessels. competitors up have Some of

will And – this question as remain take your I'll over more fleet if as with of we couple could world adding size we our debt fact before and about turn years I be only given Mark, the per it of taking rest the the So, today robust that, ship are in be to that conditions year, China, the question. today. will one a they it tonnage to consider think,

Mark Kempa

after think Yes, years I in I think, financing. Tim, recall CapEx three were you associated for five questions, the is next if our committed I what asking the

$X.X So, if three in financing about was your recall? And have each $X.X billion XX% we I part I which first question and fuel years have years of next roughly think for we on is billion, of of those of committed $X.X the the billion hedges, place.

Timothy Andrew Conder

related was it you No, the do the... to see debt. Where

Mark Kempa

about – is our debt have is We fixed XX% XX% floating. of and

Timothy Andrew Conder

I question. that be, Mark, year-end guess, will was the swaps, Where with at

Mark Kempa

year-end. to be Yeah, about by XX% going that's

Timothy Andrew Conder

Great. Okay.

Mark Kempa

with will the the work down Bliss deliveries. we further take continue of on on delivery fixed as the take and We'll debt to that

Timothy Andrew Conder

you. Thank


you. Thank

next of Our comes question from from Stephen Goldman Grambling line the Sachs.

please. question, Your

Stephen Grambling

Hey. Thanks.

comments Another of given your is booked? on net couple follow-ups yield, the and it is the How embed what's on close-in based books? guidance booking factor on close-in potentially close-in in swing What some comments. growth on does seeing be bigger or of percentage much net the bookings currently yield bookings? year currently booking the of a pricing forward on could the swings And in just recently Thanks.

Frank J. Del Rio

tell What's don't currently out. do very, I on our XX% will time to I what at at sold the that year-end, books, target close is is year-end. you in only we don't being tell you at and turns we give year-end occupancy. booking We terms that will position disclose of the very the our of

and that pricing has and improved. will, prepared as loading bookings velocity further remarks, I at said you if wave my the so, weeks And in earlier seven grown from of of first in the during have year-over-year year-end both so advantage,

So, if the variable in look, onboard be home It's target. even always It hopefully runs order happens. she of there any it and also, our need yields, the could don't is pretty is hit remains happen better. environment it in terms it And revenue. goes we as is the much doesn't steady how until to – today, always

component pricing, my pricing. tell have ticket I which a high onboard So, I We mentioned it the same don't as on to we we've spend and in seeing we significant overall on high who as yields. remarks, onboard also have ticket of see it prepared revenue, and or throughout a Customers, money visibility will to onboard tickets, load have important have have on direct and visibility that XXXX to we spend expect see money onboard correlation the been you, XXXX. between on same on very don't in you is continue seeing do when revenue. you

Stephen Grambling


would quick mix And onboard on comments. a next that and you there going XXXX the a that – we think you through onboard give that couple anything for shaping there maybe how the out the can looks of Is Thanks. spending expenses look were years? sense Anything should as particularly strength for that your you've So, you seen on well-managed. onboard it the call at like any is there of color on up? follow-up

Frank J. Del Rio

experiences. shore this No. things onboard, have seen from primarily, and spend move widespread to buying to spend it We've excursions. folks and, money in When shops in they restaurants enjoying in away

So, shore we've a uptick seen nice our in excursion business.

business Our always been has casino strong.

this the across see that revenue have available. general you we again, so, And onboard strength onboard various streams

Stephen Grambling

Thanks. Good this Great. year. Okay. luck

Frank J. Del Rio

you. Thank


you. Thank

comes James question from next Wedbush the Our Hardiman Securities. line from of

please. Your question,

James Hardiman

for of is guiding X%. guidance conversation inflation. has the morning. year to yields think been a the to Good my taking Thanks I lot Hey. call. yields, started industry rightfully respect I'm the so. fantastic wanted It's the about really It in cost you I and bit. for but Obviously, a year It cost about for or I about Obviously, was finished. of norm costs encouraged you really by think, a talk the we said, That where not to XXXX. terms little about was with X.X%,

possible, of sort if all won't seems like as the see beyond What here. we this course confidence look out here, like is So, lot there see we costs more XXXX? two did I over that guess off. to any Trying you way a cost will year. forward particularly we quantify at impact things creep to figure Edge It XXXX? of of in type to be XXXX And, should gives we those what the benefit a falling refurbishment of

Wendy A. Beck


So, question. a good

that China $XX there's which to technical some expenses Cuba, that when were there's million of related and start-up be of marketing continue; issue. and hurricane number versus the we will of unprecedented XXXX of about expenses we China parse Gem XXXX. there one-time And there both costs; additional the back, First off, rolling you that over was season; had also for will a

from points we're back of XXXX. look get we'll the benefit flat you be XXXX that reason, approximately that And a in basically the if that's net $XX perspective. of half that the million, XXX XXXX So, lapping half will back for where basis at cost of cruise

dry offsetting for primarily Now, And of fleet launch-related the programs. related to higher what's XXXX, and enhancement we have XXXX, have that we mentioned also associated these inaugural debut incremental dock expenses Bliss. days have is in with that Norwegian we

ship that years, couple showing is time events. at off mind this inaugural first are in of a having we four we're So, keeping North in the American a her

Frank J. Del Rio

just to And, in dry James, pipe docks having on you XXXX in we are more the comment XXXX. had,

in to we'll have in XX for see XXXX, that But well. be about is note our what's rate into first the XXXX. ships per also time important year. dock to going And that going some as run X Our dry to of is we larger

X to XX So, year. our this to going going forward is rate on, be run roughly per

James Hardiman

Great. Thank you.


Thank you.

comes Curtis from Harry line Our next from the question Nomura. of

Your question, please.

Harry C. Curtis

of Have Hi. to I call, so asking taking with well I'm question that that's gotten you question already not a and hope Good apologize. another and been demand ensure supply the ahead respect I've on about growth steps morning investor lifts I answered. been worries that? to asked you're and what

Frank J. Del Rio

one's Harry. No lucky, asked got so. you that yet, No,

Harry C. Curtis

good. This is

Frank J. Del Rio

the reports, last few analysts' I've on supply it. fielding reading growth. investor take calls I'll been the months

of it think so And this way.

has and bookings. growth can XXXX both large. capacity pricing, into vessels our have of a incredible fleet, introduce than been the that brand nicely very able you And For higher with the XXXX, industry we see Norwegian high our those to especially at strong Bliss, velocity

many is perspective, XXXX, average. actually capacity Cruise us From North very so which but so is We And seems either by by of to Line which call, the strong concerns Holdings grossly growth. us. about new noted the Norwegian our unserved many about, see have markets do Norwegian areas, global industry to growth in are supply sustained we vessels to year that the can't especially in in earlier showing no have growth, I simply on hands we vessels. we secular a market For get the under-penetrated that another half wait American concerned a we the or is about for marketplace, indications strong compete to as opportunities everybody that be deploy

worried no, about it. So not I'm

about at have I literally raised oh money. my like that anymore. attracted seeing It's year, we The a is not cruising. This my just been that resilient been cruising. boomers just good North all for God, this have, industry and not We're and question American continue industry I is ship full broader those makes of every prices. in every you to are years base of For a as plenty I've another to is to Millennials I ship expect who anymore. XX the consumer God, see that the taking coming not is oh know sport

excluding large, us, have when say very three footprint and our also at and I industry China. We brand our the a internationally I mean and large brands also we,

though seeing than growth, the is capacity the markets to it is the the any strength Harry. so given adoption And concerns, the that in not high higher so concerns, broad-based any we're it marketplace, simply slightly even many cruising. by don't I cause that should have average, long-term

Harry C. Curtis

And under were, source mix Has maybe say, growing that another mix XX. be that Frank, would the you? been demand XX customers of or for you of who touch on, can

Frank J. Del Rio

case in make are North We're still seeing ago. see margin, our wasn't our of even our wide American customers especially yes. customers. millennials. biggest, American-sourced roughly certainly itineraries. quarter in, the growing That are love type by for to on of the without North question, fastest it that. up years now five terms, we And a the Well, The Millennials absolute boomers a but

The glad have outside to but making boomers. don't are the the of another cruise been folks know see to boomers push alongside millennials to them. The great of need get be the we have today, we're group strong boomers So, built We industry, to that cruise wrong. the industry it. me a

Harry C. Curtis

Thank you. That's great, Frank.

Frank J. Del Rio

please. We've over time little question. more We're you. but one operator, for one a more bit, got, question, Thank



Research. of comes from question line the Bernstein final Beckel from David Our

Your question, please.

David James Beckel

Thanks pressure a lot on and no last Hey. the question here.

morning, technology improvements last that Norwegian what experience release question this the quarter, onboard were that so, associated Is in release bit a maybe Thanks. the you to cost? and the of are the some the ask you Just about app. there and a a an release wanted referring about of of you sort little to And little Frank? to onboard talk can onboard press quarter, different was mention technology. teased of Last your if

Frank J. Del Rio

Yeah. I President it Andy and can. do that I'm lot CEO going to of question, answer he have Stuart, that than Norwegian can a better the brand, Andy?

Andrew Stuart

time is was onboard we've soft the experience, technology. process, the experience pre-cruise piece that successful, because was that soft we next guests. to pretty one app this we're first Norwegian morning. been Yeah, in it, launched by And to of QX Good Cruise the the extremely our really excited seamless connect Hi. well-received the is release generation the of the the launch able app in Sky. embarkation the about And Norwegian referred onboard and into

Of bit. you course, with any little technology, a learn

incorporated whole app, we've launch new Norwegian will technology. learnings and this So, book, out download immediately the new they with can having to a now when trip. The process is guests Norwegian we're And those in of the really access Bliss. guests our into app Bliss they the their what rolling that of really version it for plan can allows

to can So, things on delivers book they and get can check-in. book to paperless app. do online book shore mobile, excursions. then they entertainment, can some embarkation, the They dining. They can of just name it Once they

go we as onboard with meaningful guests happened enhances want a is the pre-planning to process. the really the it guests of onboard, to brings the life planning, all to And and onboard onboard keeps embarkation ship. quickly between It that's really in experience possible that getting all So, activities, then, up-to-date messaging everything experience. it and as enhancement

So, was to we're very Bliss balance the fleet. forward rollout it we're across then the launching looking – received very We're it with the we'll plan and how on on of happy Sky.

for us. great been forward this has a So, step

Frank J. Del Rio

for Thank and your support. you, your time and thanks Andy, morning this everyone

and, will York. I As look this available All afternoon to you answer forward again, in the Norwegian onboard New your we always, best. Bye-bye. questions be to seeing Bliss


concludes today's conference call. This

now may disconnect. You