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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-35784

NORWEGIAN CRUISE LINE HOLDINGS LTD.

(Exact name of registrant as specified in its charter)


Bermuda		98-0691007
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7665 Corporate Center Drive, Miami, Florida 33126		33126
(Address of principal executive offices)		(zip code)

(305) 436-4000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Ordinary shares, par value $0.001 per share		NCLH		The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ⌧	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

There were 451,937,084 ordinary shares outstanding as of July 31, 2025.

Table of Contents

TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41

Item 4.	Controls and Procedures	42

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	43

Item 1A.	Risk Factors	43

Item 5.	Other Information	43

Item 6.	Exhibits	44

SIGNATURES		46

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Norwegian Cruise Line Holdings Ltd.

Consolidated Statements of Operations

(Unaudited)

(in thousands, except share and per share data)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Revenue
Passenger ticket	$	1,708,985	$	1,602,076	$	3,127,669	$	3,061,890
Onboard and other		808,512		770,416		1,517,381		1,501,817
Total revenue		2,517,497		2,372,492		4,645,050		4,563,707
Cruise operating expense
Commissions, transportation and other		487,835		501,039		883,178		937,249
Onboard and other		187,684		171,707		326,542		303,743
Payroll and related		346,133		330,578		680,637		674,859
Fuel		157,377		174,964		332,391		372,698
Food		81,323		77,046		156,911		161,754
Other		196,495		199,421		381,126		391,875
Total cruise operating expense		1,456,847		1,454,755		2,760,785		2,842,178
Other operating expense
Marketing, general and administrative		393,054		353,771		784,430		716,240
Depreciation and amortization		243,760		222,405		475,057		445,334
Total other operating expense		636,814		576,176		1,259,487		1,161,574
Operating income		423,836		341,561		624,778		559,955
Non-operating income (expense)
Interest expense, net		(236,782)		(178,472)		(454,654)		(396,649)
Other income (expense), net		(156,425)		1,896		(180,930)		20,033
Total non-operating income (expense)		(393,207)		(176,576)		(635,584)		(376,616)
Net income (loss) before income taxes		30,629		164,985		(10,806)		183,339
Income tax benefit (expense)		(637)		(1,549)		503		(2,550)
Net income (loss)	$	29,992	$	163,436	$	(10,303)	$	180,789
Weighted-average shares outstanding
Basic		446,586,784		434,807,434		443,882,011		430,805,477
Diluted		448,033,138		513,589,734		443,882,011		468,078,473
Earnings (loss) per share
Basic	$	0.07	$	0.38	$	(0.02)	$	0.42
Diluted	$	0.07	$	0.35	$	(0.02)	$	0.41

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

Norwegian Cruise Line Holdings Ltd.

Consolidated Statements of Comprehensive Income

(Unaudited)

(in thousands)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Net income (loss)	$	29,992	$	163,436	$	(10,303)	$	180,789
Other comprehensive income (loss):
Shipboard Retirement Plan		16		94		32		189
Cash flow hedges:
Net unrealized gain		22,076		1,157		52,901		48,410
Amount realized and reclassified into earnings		11,044		(3,150)		15,117		(6,483)
Total other comprehensive income (loss)		33,136		(1,899)		68,050		42,116
Total comprehensive income	$	63,128	$	161,537	$	57,747	$	222,905

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

Norwegian Cruise Line Holdings Ltd.

Consolidated Balance Sheets

(Unaudited)

(in thousands, except share data)


	June 30,		December 31,
	2025		2024
Assets
Current assets:
Cash and cash equivalents	$	184,015	$	190,765
Accounts receivable, net		265,782		221,412
Inventories		160,564		149,718
Prepaid expenses and other assets		562,272		448,209
Total current assets		1,172,633		1,010,104
Property and equipment, net		18,247,526		16,810,650
Goodwill		135,764		135,764
Trade names		500,525		500,525
Other long-term assets		1,539,369		1,512,768
Total assets	$	21,595,817	$	19,969,811
Liabilities and shareholders’ equity
Current liabilities:
Current portion of long-term debt	$	1,130,228	$	1,323,769
Accounts payable		169,367		171,106
Accrued expenses and other liabilities		1,254,568		1,180,026
Advance ticket sales		3,833,775		3,105,964
Total current liabilities		6,387,938		5,780,865
Long-term debt		12,633,183		11,776,721
Other long-term liabilities		1,005,126		986,786
Total liabilities		20,026,247		18,544,372
Commitments and contingencies (Note 10)
Shareholders’ equity:
Ordinary shares, $0.001 par value; 980,000,000 shares authorized; 446,814,009 shares issued and outstanding at June 30, 2025 and 439,861,281 shares issued and outstanding at December 31, 2024		447		440
Additional paid-in capital		8,008,295		7,921,918
Accumulated other comprehensive income (loss)		(438,989)		(507,039)
Accumulated deficit		(6,000,183)		(5,989,880)
Total shareholders’ equity		1,569,570		1,425,439
Total liabilities and shareholders’ equity	$	21,595,817	$	19,969,811

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

Norwegian Cruise Line Holdings Ltd.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)


	Six Months Ended
	June 30,
	2025		2024
Cash flows from operating activities
Net income (loss)	$	(10,303)	$	180,789
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense		514,972		488,027
Gain on derivatives		(1,903)		(1,129)
Loss on extinguishment of debt		117,938		29,000
Provision for bad debts and inventory obsolescence		2,152		3,198
Gain on involuntary conversion of assets		5		(4,462)
Share-based compensation expense		46,180		44,932
Net foreign currency adjustments on euro-denominated debt		137,922		(8,587)
Changes in operating assets and liabilities:
Accounts receivable, net		(46,754)		66,671
Inventories		(11,319)		7,329
Prepaid expenses and other assets		(89,441)		(124,287)
Accounts payable		12,415		(2,216)
Accrued expenses and other liabilities		14,073		56,439
Advance ticket sales		708,135		742,360
Net cash provided by operating activities		1,394,072		1,478,064
Cash flows from investing activities
Additions to property and equipment, net		(1,858,861)		(599,505)
Acquisition, net of cash acquired		—		(27,322)
Other		(9,201)		5,955
Net cash used in investing activities		(1,868,062)		(620,872)
Cash flows from financing activities
Repayments of long-term debt		(3,866,296)		(778,109)
Proceeds from long-term debt		4,452,990		261,734
Common share issuance proceeds, net		63,996		—
Net share settlement of restricted share units		(23,805)		(22,039)
Early redemption premium		(106,108)		(19,163)
Deferred financing fees		(53,537)		(107,932)
Net cash provided by (used in) financing activities		467,240		(665,509)
Net increase (decrease) in cash and cash equivalents		(6,750)		191,683
Cash and cash equivalents at beginning of period		190,765		402,415
Cash and cash equivalents at end of period	$	184,015	$	594,098

The accompanying notes are an integral part of these consolidated financial statements.

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Norwegian Cruise Line Holdings Ltd.

Consolidated Statements of Changes in Shareholders’ Equity

(Unaudited)

(in thousands)


	Three Months Ended June 30, 2025
					Accumulated
			Additional		Other				Total
	Ordinary		Paid-in		Comprehensive		Accumulated		Shareholders’
	Shares		Capital		Income (Loss)		Deficit		Equity
Balance, March 31, 2025	$	443	$	7,918,391	$	(472,125)	$	(6,030,175)	$	1,416,534
Share-based compensation		—		25,899		—		—		25,899
Common share issuance proceeds, net		4		63,992		—		—		63,996
Common share issuance for NCLC exchangeable notes		—		13		—		—		13
Other comprehensive income, net		—		—		33,136		—		33,136
Net income		—		—		—		29,992		29,992
Balance, June 30, 2025	$	447	$	8,008,295	$	(438,989)	$	(6,000,183)	$	1,569,570

	Six Months Ended June 30, 2025
					Accumulated
			Additional		Other				Total
	Ordinary		Paid-in		Comprehensive		Accumulated		Shareholders’
	Shares		Capital		Income (Loss)		Deficit		Equity
Balance, December 31, 2024	$	440	$	7,921,918	$	(507,039)	$	(5,989,880)	$	1,425,439
Share-based compensation		—		46,180		—		—		46,180
Issuance of shares under employee-related plans		3		(3)		—		—		—
Common share issuance proceeds, net		4		63,992		—		—		63,996
Common share issuance for NCLC exchangeable notes		—		13		—		—		13
Net share settlement of restricted share units		—		(23,805)		—		—		(23,805)
Other comprehensive income, net		—		—		68,050		—		68,050
Net loss		—		—		—		(10,303)		(10,303)
Balance, June 30, 2025	$	447	$	8,008,295	$	(438,989)	$	(6,000,183)	$	1,569,570

The accompanying notes are an integral part of these consolidated financial statements.

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Norwegian Cruise Line Holdings Ltd.

Consolidated Statements of Changes in Shareholders’ Equity - Continued

(Unaudited)

(in thousands)


	Three Months Ended June 30, 2024
					Accumulated
			Additional		Other				Total
	Ordinary		Paid-in		Comprehensive		Accumulated		Shareholders’
	Shares		Capital		Income (Loss)		Deficit		Equity
Balance, March 31, 2024	$	429	$	7,708,869	$	(464,423)	$	(6,882,784)	$	362,091
Share-based compensation		—		22,984		—		—		22,984
Common share issuance for NCLC exchangeable notes		11		146,517		—		—		146,528
Net share settlement of restricted share units		—		(7)		—		—		(7)
Other comprehensive loss, net		—		—		(1,899)		—		(1,899)
Net income		—		—		—		163,436		163,436
Balance, June 30, 2024	$	440	$	7,878,363	$	(466,322)	$	(6,719,348)	$	693,133

	Six Months Ended June 30, 2024
					Accumulated
			Additional		Other				Total
	Ordinary		Paid-in		Comprehensive		Accumulated		Shareholders’
	Shares		Capital		Income (Loss)		Deficit		Equity
Balance, December 31, 2023	$	425	$	7,708,957	$	(508,438)	$	(6,900,137)	$	300,807
Share-based compensation		—		44,932		—		—		44,932
Issuance of shares under employee-related plans		4		(4)		—		—		—
Common share issuance for NCLC exchangeable notes		11		146,517		—		—		146,528
Net share settlement of restricted share units		—		(22,039)		—		—		(22,039)
Other comprehensive income, net		—		—		42,116		—		42,116
Net income		—		—		—		180,789		180,789
Balance, June 30, 2024	$	440	$	7,878,363	$	(466,322)	$	(6,719,348)	$	693,133

The accompanying notes are an integral part of these consolidated financial statements.

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Norwegian Cruise Line Holdings Ltd.

Notes to Consolidated Financial Statements

(Unaudited)

Unless otherwise indicated or the context otherwise requires, references in this report to (i) the “Company,” “we,” “our” and “us” refer to NCLH (as defined below) and its subsidiaries, (ii) “NCLC” refers to NCL Corporation Ltd., (iii) “NCLH” refers to Norwegian Cruise Line Holdings Ltd., (iv) “Norwegian Cruise Line” or “Norwegian” refers to the Norwegian Cruise Line brand and its predecessors, (v) “Oceania Cruises” refers to the Oceania Cruises brand and (vi) “Regent” refers to the Regent Seven Seas Cruises brand.

References to the “U.S.” are to the United States of America and “dollar(s)” or “$” are to U.S. dollars and “euro(s)” or “€” are to the official currency of the Eurozone. We refer you to “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Terminology” for the capitalized terms used and not otherwise defined throughout these notes to our consolidated financial statements.

1. Description of Business and Organization

We are a leading global cruise company which operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands. As of June 30, 2025, we had 33 ships with approximately 70,100 Berths. Oceania Allura was delivered in July 2025. We refer you to Note 13 – “Subsequent Event” for additional information. The Company currently has orders for 13 additional ships to be delivered from 2026 through 2036.

We have three Prima Class Ships on order with currently scheduled delivery dates from 2026 through 2028. We also have orders for three new classes of ships: four Sonata Class Ships with deliveries currently scheduled from 2027 through 2035, two Prestige Class Ships with deliveries currently scheduled in 2026 and 2030 and four Norwegian Cruise Line ships with deliveries currently scheduled from 2030 through 2036. In July 2025, we confirmed that we will not exercise the options to cancel the orders for the last two Sonata Class Ships.

2. Summary of Significant Accounting Policies

Liquidity

As of June 30, 2025, we had liquidity of approximately $2.4 billion, including cash and cash equivalents of $184.0 million, $2.0 billion available under our Revolving Loan Facility and a €200 million commitment that could be used for future newbuild payments which was available through July 2025. We believe that we have sufficient liquidity to fund our obligations and expect to remain in compliance with our financial covenants for at least the next twelve months from the issuance of these financial statements.

We will continue to pursue various opportunities to optimize our liquidity, refinance future debt maturities to reduce interest expense and/or extend the maturity dates associated with our existing indebtedness and obtain relevant financial covenant amendments or waivers, if needed.

Basis of Presentation

The accompanying consolidated financial statements are unaudited and, in our opinion, contain all normal recurring adjustments necessary for a fair statement of the results for the periods presented.

Our operations are seasonal and results for interim periods are not necessarily indicative of the results for the entire fiscal year. Historically, demand for cruises has been strongest during the Northern Hemisphere’s summer months. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2024, which are included in our most recent Annual Report on Form 10-K filed with the SEC on February 27, 2025.

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Earnings Per Share

Basic earnings per share is computed by dividing net income by the basic weighted-average number of shares outstanding during each period. Diluted earnings per share is computed by dividing net income and assumed conversion of exchangeable notes by diluted weighted-average shares outstanding.

A reconciliation between basic and diluted earnings per share was as follows (in thousands, except share and per share data):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Net income (loss)	$	29,992	$	163,436	$	(10,303)	$	180,789
Effect of dilutive securities - exchangeable notes		—		16,017		—		9,225
Net income and assumed conversion of exchangeable notes - Diluted EPS	$	29,992	$	179,453	$	(10,303)	$	190,014
Basic weighted-average shares outstanding		446,586,784		434,807,434		443,882,011		430,805,477
Dilutive effect of share awards		1,446,354		2,054,804		—		3,135,246
Dilutive effect of exchangeable notes		—		76,727,496		—		34,137,750
Diluted weighted-average shares outstanding		448,033,138		513,589,734		443,882,011		468,078,473
Basic EPS	$	0.07	$	0.38	$	(0.02)	$	0.42
Diluted EPS	$	0.07	$	0.35	$	(0.02)	$	0.41

Each exchangeable note (see Note 7 – “Long-Term Debt”) is individually evaluated for its dilutive or anti-dilutive impact on EPS as determined under the if-converted method. Only the interest expense and weighted average shares for exchangeable notes that are dilutive are included in the effect of dilutive securities. During the three and six months ended June 30, 2025, the 2025 Exchangeable Notes, 2027 1.125% Exchangeable Notes and 2027 2.5% Exchangeable Notes were anti-dilutive. During the six months ended June 30, 2024, the 2024 Exchangeable Notes, 2025 Exchangeable Notes and 2027 2.5% Exchangeable Notes were anti-dilutive. For the 2030 Exchangeable Notes, we are required to settle the principal amount in cash and have the option to settle the conversion spread in cash or shares. If the conversion value of the 2030 Exchangeable Notes does not exceed their conversion price for a reporting period, then the shares underlying the notes will not be reflected in the Company’s calculation of diluted EPS. For the three and six months ended June 30, 2025, the price of NCLH's ordinary shares did not exceed the conversion price, and therefore, there was no impact to diluted EPS. Share awards are evaluated for a dilutive or anti-dilutive impact on EPS using the treasury stock method. For the three months ended June 30, 2025 and 2024, a total of 59.3 million and 7.1 million shares, respectively, and for the six months ended June 30, 2025 and 2024, a total of 70.1 million and 53.3 million shares, respectively, have been excluded from diluted weighted-average shares outstanding because the effect of including them would have been anti-dilutive.

Segment Reporting

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which aims to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 has been applied retrospectively.

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The below table includes our calculation of adjusted operating income, our significant segment expenses therein, and a reconciliation of adjusted operating income to net income (loss) before income taxes (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Total revenue	$	2,517,497	$	2,372,492	$	4,645,050	$	4,563,707
Cruise operating expense
Commissions, transportation and other		487,835		501,039		883,178		937,249
Onboard and other		187,684		171,707		326,542		303,743
Adjusted payroll and related (1)		340,173		324,783		669,300		663,731
Fuel		157,377		174,964		332,391		372,698
Food		81,323		77,046		156,911		161,754
Other		196,495		199,421		381,126		391,875
Adjusted total cruise operating expense		1,450,887		1,448,960		2,749,448		2,831,050
Other operating expense
Adjusted marketing, general and administrative (2)		372,563		335,864		748,482		680,999
Depreciation and amortization		243,760		222,405		475,057		445,334
Adjusted total other operating expense		616,323		558,269		1,223,539		1,126,333
Adjusted operating income	$	450,287	$	365,263	$	672,063	$	606,324

Adjusted operating income	$	450,287	$	365,263	$	672,063	$	606,324
Non-cash compensation (3)		(26,451)		(23,702)		(47,285)		(46,369)
Interest expense, net		(236,782)		(178,472)		(454,654)		(396,649)
Other income (expense), net		(156,425)		1,896		(180,930)		20,033
Net income (loss) before income taxes	$	30,629	$	164,985	$	(10,806)	$	183,339

(1)	Excludes non-cash share-based compensation expenses related to equity awards for shipboard officers (see Note 9 – “Employee Benefits and Compensation Plans”) and non-cash deferred compensation expenses related to the crew pension plan as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Service cost	$	552	$	718	$	1,105	$	1,437

(2)	Excludes non-cash share-based compensation expenses related to equity awards for corporate employees (see Note 9 – “Employee Benefits and Compensation Plans”).

(3)	Includes non-cash deferred compensation expenses related to the crew pension plan and non-cash share-based compensation expenses related to equity awards, which are included in payroll and related expense and marketing, general and administrative expense.

Foreign Currency

The majority of our transactions are settled in U.S. dollars. We remeasure assets and liabilities denominated in foreign currencies at exchange rates in effect at the balance sheet date. The resulting gains or losses are recognized in our consolidated statements of operations within other income (expense), net. We recognized a loss of $158.5 million and a gain of $2.3 million for the three months ended June 30, 2025 and 2024, respectively, and a loss of $181.0 million and a gain of $15.6 million for the six months ended June 30, 2025 and 2024, respectively, related to remeasurement of assets and liabilities denominated in foreign currencies. Remeasurements of foreign currency related to operating activities are recognized within changes in operating assets and liabilities in the consolidated statement of cash flows.

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Depreciation and Amortization Expense

The amortization of deferred financing fees is included in depreciation and amortization expense in the consolidated statements of cash flows; however, for purposes of the consolidated statements of operations they are included in interest expense, net.

Recently Issued Accounting Guidance

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information as well as certain other amendments to improve the effectiveness of income tax disclosures. The amendments in this update are effective for annual periods beginning after December 15, 2024 and will be applied on a prospective basis. We are evaluating the impact of ASU 2023-09 on our notes to the consolidated financial statements.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disaggregation of certain costs and expenses, including employee compensation, and requires other improvements to disclosures. The amendments in this update are effective for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The update may be applied on a prospective or retrospective basis. We are evaluating the impact of ASU 2024-03 on our notes to the consolidated financial statements.

3. Revenue Recognition

Disaggregation of Revenue

Revenue and cash flows are affected by economic factors in various geographical regions. Revenues by destination were as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
North America	$	1,290,919	$	1,176,098	$	2,737,647	$	2,736,870
Europe		963,830		1,055,061		1,037,080		1,080,297
Asia-Pacific		232,944		118,527		638,733		515,529
Other		29,804		22,806		231,590		231,011
Total revenue	$	2,517,497	$	2,372,492	$	4,645,050	$	4,563,707

North America includes the U.S., the Caribbean, Canada and Mexico. Europe includes the Baltic region, Canary Islands and Mediterranean. Asia-Pacific includes Australia, New Zealand and Asia. Other includes all other international territories.

Geographic Concentration

Although we sell cruises on an international basis, our passenger ticket revenue is primarily attributed to U.S.-sourced guests who make reservations through the U.S. Revenue attributable to U.S.-sourced guests has approximated 84-85% of total revenue over the preceding three fiscal years. No other individual country’s revenues exceed 10% in any given period.

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Contract Balances

Receivables from customers are included within accounts receivable, net. As of June 30, 2025 and December 31, 2024, our receivables from customers were $121.2 million and $114.2 million, respectively, primarily related to in-transit credit card receivables.

Our contract liabilities are included within advance ticket sales. As of June 30, 2025 and December 31, 2024, our contract liabilities were $3.0 billion and $2.2 billion, respectively. Of the amounts included within contract liabilities as of June 30, 2025, approximately 40% were refundable in accordance with our cancellation policies. Of the deposits included within advance ticket sales, the majority are refundable in accordance with our cancellation policies and it is uncertain to what extent guests may request refunds. For the six months ended June 30, 2025, $1.9 billion of revenue recognized was included in the contract liability balance at the beginning of the period.

4. Leases

Operating Leases - Lessee

Operating lease balances were as follows (in thousands):


	Balance Sheet location	June 30, 2025		December 31, 2024
Operating leases
Right-of-use assets	Other long-term assets	$	989,056	$	899,091
Current operating lease liabilities	Accrued expenses and other liabilities		27,916		27,313
Non-current operating lease liabilities	Other long-term liabilities		797,827		788,669

Operating Leases - Lessor

In March and April 2025, we executed long-term leases for four of our ships. The leases for Norwegian Sky and Seven Seas Navigator will commence in 2026, and the leases for Norwegian Sun and Insignia will commence in 2027. Each lease has a term of 10 years and contains a nominal purchase option at the end of each lease term. These leases are expected to be operating leases. The aggregate undiscounted lease payments to be received throughout the terms of the agreements, including variable payments, are expected to be approximately $600 million.

5. Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) for the six months ended June 30, 2025 was as follows (in thousands):


	Six Months Ended June 30, 2025
						Change
	Accumulated		Change			Related to
	Other		Related to			Shipboard
	Comprehensive		Cash Flow			Retirement
	Income (Loss)		Hedges			Plan
Accumulated other comprehensive income (loss) at beginning of period	$	(507,039)	$	(514,243)		$	7,204
Current period other comprehensive income before reclassifications		52,901		52,901			—
Amounts reclassified into earnings		15,149		15,117	(1)		32	(2)
Accumulated other comprehensive income (loss) at end of period	$	(438,989)	$	(446,225)	(3)	$	7,236

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Accumulated other comprehensive income (loss) for the six months ended June 30, 2024 was as follows (in thousands):


	Six Months Ended June 30, 2024
						Change
	Accumulated		Change			Related to
	Other		Related to			Shipboard
	Comprehensive		Cash Flow			Retirement
	Income (Loss)		Hedges			Plan
Accumulated other comprehensive income (loss) at beginning of period	$	(508,438)	$	(508,524)		$	86
Current period other comprehensive income before reclassifications		48,410		48,410			—
Amounts reclassified into earnings		(6,294)		(6,483)	(1)		189	(2)
Accumulated other comprehensive income (loss) at end of period	$	(466,322)	$	(466,597)		$	275

(1)	We refer you to Note 8 – “Fair Value Measurements and Derivatives” for the affected line items in the consolidated statements of operations.

(2)	Amortization of prior-service cost and actuarial loss reclassified to other income (expense), net.

(3)	Includes $33.3 million of losses expected to be reclassified into earnings in the next 12 months.

6.Property and Equipment, Net

Property and equipment, net increased $1.4 billion for the six months ended June 30, 2025 primarily due to the delivery of Norwegian Aqua.

7. Long-Term Debt

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.

Also in January 2025, NCLC issued $1.8 billion aggregate principal amount of 6.750% senior unsecured notes due February 1, 2032 (the “2032 Notes”). NCLC may, at its option, redeem the 2032 Notes, in whole or in part, (i) prior to February 1, 2028 (the “First Call Date”), at a redemption price equal to 100% of the principal amount of the 2032 Notes to be redeemed plus an applicable “make-whole” amount, plus accrued and unpaid interest and additional amounts, if any, to, but excluding, the redemption date, and (ii) on or after the First Call Date, at the redemption prices set forth in the 2032 Notes indenture, plus accrued and unpaid interest and additional amounts, if any, to, but excluding, the redemption date. In addition, at any time and from time to time prior to the First Call Date, NCLC may redeem up to 40% of the aggregate principal amount of the 2032 Notes with the net proceeds of certain equity offerings at a redemption price equal to 106.750% of the principal amount of the 2032 Notes redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, so long as at least 60% of the aggregate principal amount of the 2032 Notes issued remains outstanding following such redemption. The 2032 Notes pay interest at 6.750% per annum, semiannually in arrears on February 1 and August 1 of each year, to holders of record at the close of business on the immediately preceding January 15 and July 15, respectively. The 2032 Notes indenture contains covenants that limit the ability of NCLC and its restricted subsidiaries to, among other things: (i) create liens on certain assets to secure debt; (ii) enter into sale leaseback transactions; and (iii) consolidate, merge, sell or otherwise dispose of all or substantially all of their assets.

The net proceeds from the issuance of the 2032 Notes, together with cash on hand, were used to redeem $1.2 billion aggregate principal amount of the 5.875% senior unsecured notes due 2026 and $600.0 million aggregate principal amount of the 8.375% senior secured notes due 2028, together with accrued and unpaid interest thereon, and to pay related transaction premiums, fees and expenses. The repayment of the 8.375% senior secured notes due 2028 also released the related collateral. During the three months ended March 31, 2025, the related losses on extinguishment were approximately $49.5 million, which were recognized in interest expense, net.

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Concurrently with the above January 2025 transactions, NCLC entered into an amended and restated Revolving Loan Facility (the “Seventh ARCA”). The Seventh ARCA, among other things, increased the aggregate amount of commitments under the Revolving Loan Facility from $1.2 billion to $1.7 billion. The commitments and any loans under the Revolving Loan Facility mature on January 22, 2030, provided that (a) if, on the date that is 91 days prior to the final maturity date of any of NCLC’s outstanding senior notes (other than the exchangeable notes), (i) such senior notes (other than the exchangeable notes) have not been repaid or refinanced with indebtedness maturing after April 23, 2030 and (ii) the aggregate principal amount outstanding under such senior notes exceeds $400,000,000, the maturity date will be such date if such date is earlier than January 22, 2030, (b) if, on November 17, 2026, the 2027 1.125% Exchangeable Notes have not been repaid or refinanced with indebtedness maturing after April 23, 2030 and a liquidity test is not satisfied, the maturity date will be November 17, 2026 and (c) if, on November 17, 2026, the 2027 2.5% Exchangeable Notes have not been repaid or refinanced with indebtedness maturing after April 23, 2030 and a liquidity test is not satisfied, the maturity date will be November 17, 2026. Loans under the Revolving Loan Facility will accrue interest (x) in the case of alternate base rate loans, at a per annum rate based on an alternate base rate plus a margin of between 0.00% and 1.00% and (y) in the case of term benchmark loans, at a per annum rate based on the adjusted term SOFR plus a margin of between 1.00% and 2.00%. The commitments under the Revolving Loan Facility will accrue an unused commitment fee on the amount of available unused commitments at a rate of between 0.15% and 0.30%. The applicable margin and unused commitment fee will depend on the total leverage ratio as of the applicable date. The Seventh ARCA also modified certain existing negative covenant thresholds.

In March 2025, we took delivery of Norwegian Aqua. We had export credit financing in place for 80% of the contract price. The associated €1.0 billion term loan bears interest at a fixed rate of 1.83% with a maturity date of February 23, 2037. Principal and interest payments are payable semiannually.

In April 2025, NCLC entered into individually negotiated note exchange agreements with certain existing holders (the “Holders”) of the 2025 Exchangeable Notes, pursuant to which NCLC and the Holders agreed to exchange (the “Exchange”) approximately $353.9 million in aggregate principal amount of the Holders’ 2025 Exchangeable Notes for (i) approximately $353.9 million in aggregate principal amount of NCLC’s 0.875% exchangeable senior notes due April 15, 2030 (the “2030 Exchangeable Notes”) and (ii) an aggregate cash payment (the “Cash Payment”) of approximately $64.0 million, plus accrued and unpaid interest on the 2025 Exchangeable Notes that was exchanged to, but excluding, the closing date of the Exchange. The Cash Payment was equal to the gross proceeds from the concurrent Equity Offering (as defined below) and represented the remainder of NCLC’s exchange obligation in excess of the aggregate principal amount of the 2025 Exchangeable Notes that were exchanged. During the three months ended June 30, 2025, the related losses on extinguishment were approximately $68.4 million, which were recognized in interest expense, net.

Additionally, in April 2025, the Company completed a registered direct offering of 3,358,098 ordinary shares to the Holders at a price of $19.06 per share (the “Equity Offering”). In connection with the Equity Offering, the Company entered into individually negotiated share purchase agreements with the Holders. The Company used the net proceeds from the Equity Offering, together with cash on hand, to make the Cash Payment.

The 2030 Exchangeable Notes are general senior unsecured obligations of NCLC and guaranteed by NCLH on a senior unsecured basis. Holders may exchange all or a portion of the 2030 Exchangeable Notes at the holder’s option (i) at any time prior to the close of business on the business day immediately preceding October 15, 2029, subject to the satisfaction of certain conditions and during certain periods, and (ii) on or after October 15, 2029 until the close of business on the business day immediately preceding the maturity date, regardless of whether such conditions have been met. Upon exchange of the 2030 Exchangeable Notes, NCLC will satisfy its exchange obligation by paying cash up to the aggregate principal amount of the 2030 Exchangeable Notes to be exchanged and paying or delivering, as the case may be, cash, ordinary shares or a combination of cash and ordinary shares, at NCLC’s election, in respect of the remainder, if any, of NCLC’s exchange obligation in excess of the aggregate principal amount of the 2030 Notes to be exchanged. The initial exchange rate per $1,000 principal amount of 2030 Notes is 38.1570 ordinary shares, which is equivalent to an initial exchange price of approximately $26.21 per ordinary share, subject to adjustment in certain circumstances. The maximum exchange rate is 52.4658 and reflects potential adjustments to the initial exchange rate, which would only be made in the event of certain make-whole fundamental changes or tax redemption events. The exchange rate referred to above is also subject to adjustment for any stock split, stock dividend or similar transaction.

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The 2030 Exchangeable Notes pay interest at 0.875% per annum, semiannually on April 15 and October 15 of each year, to holders of record at the close of business on the immediately preceding April 1 and October 1, respectively.

In June 2025, NCLC entered into an amendment to the Seventh ARCA (the “ARCA Amendment”). The ARCA Amendment increased the aggregate amount of the lenders’ commitments under the Revolving Loan Facility from $1.7 billion to approximately $2.5 billion and modified the vessels that serve as collateral. The Revolving Loan Facility and related guarantees are now secured by first-priority interests in, among other things and subject to certain agreed security principles, 14 of our vessels. Concurrently, NCLC also entered into a supplemental indenture that modified the collateral for the 8.125% senior secured notes due 2029 such that this collateral is the same as the ARCA Amendment.

Exchangeable Notes

The following is a summary of NCLC’s exchangeable notes as of June 30, 2025 (in thousands):


			Unamortized
	Principal		Deferred		Net Carrying		Fair Value
	Amount		Financing Fees		Amount		Amount		Leveling
2025 Exchangeable Notes (1)	$	96,101	$	(81)	$	96,020	$	106,147	Level 2
2027 1.125% Exchangeable Notes		1,150,000		(9,517)		1,140,483		1,123,734	Level 2
2027 2.5% Exchangeable Notes		473,175		(4,232)		468,943		470,525	Level 2
2030 Exchangeable Notes		353,876		(3,214)		350,662		376,170	Level 2

The following is a summary of NCLC’s exchangeable notes as of December 31, 2024 (in thousands):


			Unamortized
	Principal		Deferred		Net Carrying		Fair Value
	Amount		Financing Fees		Amount		Amount		Leveling
2025 Exchangeable Notes (1)	$	449,990	$	(1,463)	$	448,527	$	641,560	Level 2
2027 1.125% Exchangeable Notes		1,150,000		(12,289)		1,137,711		1,177,347	Level 2
2027 2.5% Exchangeable Notes		473,175		(5,411)		467,764		492,395	Level 2

(1)	Classified within current portion of long-term debt. Subsequent to June 30, 2025, substantially all the remaining holders of the 2025 Exchangeable Notes elected to exchange their notes for 5,120,487 NCLH ordinary shares and the remaining unexchanged notes were repaid in cash at maturity.

The following provides a summary of the interest expense of NCLC’s exchangeable notes (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Coupon interest	$	8,567	$	13,308	$	20,805	$	27,745
Amortization of deferred financing fees		2,340		2,709		4,821		5,612
Total	$	10,907	$	16,017	$	25,626	$	33,357

As of June 30, 2025, the effective interest rate is 5.97%, 1.64%, 3.06% and 1.06% for the 2025 Exchangeable Notes, 2027 1.125% Exchangeable Notes, 2027 2.5% Exchangeable Notes and 2030 Exchangeable Notes, respectively.

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Debt Repayments

The following are scheduled principal repayments on our long-term debt including exchangeable notes, which can be, or in the case of certain of the 2025 Exchangeable Notes have been, settled in NCLH ordinary shares, and finance lease obligations as of June 30, 2025 (in thousands):


Year	Amount
Remainder of 2025	$	500,640
2026		1,045,214
2027		3,383,798
2028		1,207,797
2029		2,023,088
2030		1,758,833
Thereafter		4,194,868
Total	$	14,114,238

Debt Covenants

As of June 30, 2025, we were in compliance with all of our debt covenants. If we do not continue to remain in compliance with our covenants, we would have to seek additional amendments to or waivers of our covenants. However, no assurances can be made that such amendments or waivers would be approved by our lenders. 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 on our operations and liquidity.

8. Fair Value Measurements and Derivatives

Fair value is defined as the price at which an orderly transaction to sell an asset or to transfer a liability would take place between market participants at the measurement date under current market conditions (that is, an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability).

Derivatives are generally recorded at fair value. Contracts that are designated as normal purchases and normal sales are not recorded at fair value. The normal purchases and normal sales exception requires, among other things, physical delivery in quantities expected to be used or sold over a reasonable period in the normal course of business. All of our allowance purchase agreements related to the European Union’s Emissions Trading System meet the criteria specified for this exception.

Fair Value Hierarchy

The following hierarchy for inputs used in measuring fair value should maximize the use of observable inputs and minimize the use of unobservable inputs by requiring that the most observable inputs be used when available:

Level 1 Quoted prices in active markets for identical assets or liabilities that are accessible at the measurement dates.

Level 2 Significant other observable inputs that are used by market participants in pricing the asset or liability based on market data obtained from independent sources.

Level 3 Significant unobservable inputs we believe market participants would use in pricing the asset or liability based on the best information available.

Derivatives

We are exposed to market risk attributable to changes in interest rates, foreign currency exchange rates and fuel prices. We attempt to minimize these risks through a combination of our normal operating and financing activities and through

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the use of derivatives. We assess whether derivatives used in hedging transactions are “highly effective” in offsetting changes in the cash flow of our hedged forecasted transactions. We use qualitative assessments or regression analysis for hedge relationships and high effectiveness is achieved when a statistically valid relationship reflects a high degree of offset and correlation between the fair values of the derivative and the hedged forecasted transaction. Cash flows from the derivatives are classified in the same category as the cash flows from the underlying hedged transaction. If it is determined that the hedged forecasted transaction is no longer probable of occurring, then the amount recognized in accumulated other comprehensive income (loss) is released to earnings. There are no amounts excluded from the assessment of hedge effectiveness, except when the hedged item is a contractually specified component, and there are no credit-risk-related contingent features in our derivative agreements. We monitor concentrations of credit risk associated with financial and other institutions with which we conduct significant business. Credit risk, including but not limited to counterparty non-performance under derivatives, is not considered significant as we primarily conduct business with large, well-established financial institutions with which we have established relationships, and which have credit risks acceptable to us, or the credit risk is spread out among many creditors. We do not anticipate non-performance by any of our significant counterparties.

As of June 30, 2025, we had fuel swaps, which are used to mitigate the financial impact of volatility of fuel prices pertaining to approximately 913 thousand metric tons of our projected fuel purchases, maturing through December 31, 2027.

As of June 30, 2025, we had fuel swaps pertaining to approximately 94 thousand metric tons of our projected fuel purchases which were not designated as cash flow hedges maturing through October 31, 2027.

As of June 30, 2025, we had foreign currency forwards and collars which were used to mitigate the financial impact of volatility in foreign currency exchange rates related to our ship construction contracts denominated in euros. The notional amount of our foreign currency contracts were €764.2 million, or $900.8 million based on the euro/U.S. dollar exchange rate as of June 30, 2025.

The derivatives measured at fair value and the respective location in the consolidated balance sheets include the following (in thousands):


		Assets				Liabilities
		June 30,		December 31,		June 30,		December 31,
	Balance Sheet Location	2025		2024		2025		2024
Derivative Contracts Designated as Hedging Instruments

Fuel contracts
	Prepaid expenses and other assets	$	3	$	1,576	$	—	$	1,798
	Other long-term assets		223		650		—		208
	Accrued expenses and other liabilities		1,099		488		15,041		12,955
	Other long-term liabilities		1,003		648		5,747		2,030
Foreign currency contracts
	Prepaid expenses and other assets		6,235		—		—		—
	Other long-term assets		44,268		—		—		—
	Accrued expenses and other liabilities		—		—		—		1,567
	Other long-term liabilities		—		—		—		17,427
Total derivatives designated as hedging instruments		$	52,831	$	3,362	$	20,788	$	35,985

Derivative Contracts Not Designated as Hedging Instruments

Fuel contracts
	Prepaid expenses and other assets	$	—	$	234	$	1	$	—
	Other long-term assets		3		—		—		—
	Accrued expenses and other liabilities		382		—		2,031		390
	Other long-term liabilities		34		—		70		35

Total derivatives not designated as hedging instruments		$	419	$	234	$	2,102	$	425
Total derivatives		$	53,250	$	3,596	$	22,890	$	36,410

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The fair values of swap and forward contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. The Company determines the value of options and collars utilizing an option pricing model based on inputs that are either readily available in public markets or can be derived from information available in publicly quoted markets. The option pricing model used by the Company is an industry standard model for valuing options and is used by the broker/dealer community. The inputs to this option pricing model are the option strike price, underlying price, risk-free rate of interest, time to expiration, and volatility. The fair value of option contracts considers both the intrinsic value and any remaining time value associated with those derivatives that have not yet settled. The Company also considers counterparty credit risk and its own credit risk in its determination of all estimated fair values.

Our derivatives and financial instruments were categorized as Level 2 in the fair value hierarchy, and we had no derivatives or financial instruments categorized as Level 1 or Level 3. Our derivative contracts include rights of offset with our counterparties. We have elected to net certain assets and liabilities within counterparties when the rights of offset exist. We are not required to post cash collateral related to our derivative instruments.

The following table discloses the gross and net amounts recognized within assets and liabilities (in thousands):


			Gross				Gross
	Gross		Amounts		Total Net		Amounts
June 30, 2025	Amounts		Offset		Amounts		Not Offset		Net Amounts
Assets	$	50,732	$	(1)	$	50,731	$	(50,503)	$	228
Liabilities		22,889		(2,518)		20,371		—		20,371


			Gross				Gross
	Gross		Amounts		Total Net		Amounts
December 31, 2024	Amounts		Offset		Amounts		Not Offset		Net Amounts
Assets	$	2,460	$	(2,006)	$	454	$	—	$	454
Liabilities		34,404		(1,136)		33,268		(18,994)		14,274

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The effects of cash flow hedge accounting on accumulated other comprehensive income (loss) were as follows (in thousands):


					Location of Gain
					(Loss) Reclassified
					from Accumulated	Amount of Gain (Loss) Reclassified
	Amount of Gain (Loss)				Other Comprehensive	from Accumulated Other
	Recognized in Other				Income (Loss) into	Comprehensive Income
Derivatives	Comprehensive Loss				Income (Expense)	(Loss) into Income (Expense)
	Three Months		Three Months			Three Months		Three Months
	Ended		Ended			Ended		Ended
	June 30, 2025		June 30, 2024			June 30, 2025		June 30, 2024
Fuel contracts	$	(27,268)	$	1,035	Fuel	$	(6,147)	$	6,838
Fuel contracts		—		—	Other income (expense), net		(777)		432
Foreign currency contracts		49,344		122	Depreciation and amortization		(4,120)		(4,120)
Total gain (loss) recognized in other comprehensive loss	$	22,076	$	1,157		$	(11,044)	$	3,150


					Location of Gain
					(Loss) Reclassified
					from Accumulated	Amount of Gain (Loss) Reclassified
	Amount of Gain (Loss)				Other Comprehensive	from Accumulated Other
	Recognized in Other				Income (Loss) into	Comprehensive Income
Derivatives	Comprehensive Loss				Income (Expense)	(Loss) into Income (Expense)
	Six Months		Six Months			Six Months		Six Months
	Ended		Ended			Ended		Ended
	June 30, 2025		June 30, 2024			June 30, 2025		June 30, 2024
Fuel contracts	$	(16,596)	$	48,288	Fuel	$	(5,857)	$	13,415
Fuel contracts		—		—	Other income (expense), net		(1,021)		1,307
Foreign currency contracts		69,497		122	Depreciation and amortization		(8,239)		(8,239)
Total gain (loss) recognized in other comprehensive loss	$	52,901	$	48,410		$	(15,117)	$	6,483

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The effects of cash flow hedge accounting on the consolidated statements of operations include the following (in thousands):


	Three Months Ended June 30, 2025						Three Months Ended June 30, 2024
			Depreciation						Depreciation
			and		Other Income				and		Other Income
	Fuel		Amortization		(Expense), net		Fuel		Amortization		(Expense), net
Total amounts of income and expense line items presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded	$	157,377	$	243,760	$	(156,425)	$	174,964	$	222,405	$	1,896

Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (expense)
Fuel contracts		(6,147)		—		—		6,838		—		—
Foreign currency contracts		—		(4,120)		—		—		(4,120)		—

Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (expense) as a result that a forecasted transaction is no longer probable of occurring
Fuel contracts		—		—		(777)		—		—		432


	Six Months Ended June 30, 2025						Six Months Ended June 30, 2024
			Depreciation						Depreciation
			and		Other Income				and		Other Income
	Fuel		Amortization		(Expense), net		Fuel		Amortization		(Expense), net
Total amounts of income and expense line items presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded	$	332,391	$	475,057	$	(180,930)	$	372,698	$	445,334	$	20,033

Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (expense)
Fuel contracts		(5,857)		—		—		13,415		—		—
Foreign currency contracts		—		(8,239)		—		—		(8,239)		—

Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (expense) as a result that a forecasted transaction is no longer probable of occurring
Fuel contracts		—		—		(1,021)		—		—		1,307

Long-Term Debt

As of June 30, 2025 and December 31, 2024, the fair value of our long-term debt, including the current portion, was $13.6 billion and $12.8 billion, respectively, which was $0.6 billion lower than the carrying values, excluding deferred financing costs. The difference between the fair value and carrying value of our long-term debt is due to our fixed and variable rate debt obligations carrying interest rates that are above or below market rates at the measurement dates. The fair value of our long-term revolving and term loan facilities was calculated based on estimated rates for the same or similar instruments with similar terms and remaining maturities. The fair value of our exchangeable notes considers observable risk-free rates; credit spreads of the same or similar instruments; and share prices, tenors, and historical and implied volatilities which are sourced from observable market data. The inputs are considered to be Level 2 in the fair value hierarchy. Market risk associated with our long-term variable rate debt is the potential increase in interest expense from an increase in interest rates or from an increase in share values.

Other

The carrying amounts reported in the consolidated balance sheets of all other financial assets and liabilities approximate fair value.

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9. Employee Benefits and Compensation Plans

In January 2013, NCLH adopted the 2013 Performance Incentive Plan, which as amended and restated through 2024 (the “Restated 2013 Plan”), provided for a maximum aggregate limit of 45,009,006 shares that could have been delivered pursuant to all awards granted under the Restated 2013 Plan. In June 2025, NCLH’s shareholders approved a further amendment and restatement of the Restated 2013 Plan to increase the number of NCLH ordinary shares that may be delivered by 3,000,000, resulting in an increase in the maximum aggregate limit to 48,009,006 shares.

Restricted Share Unit Awards

In March 2025, NCLH granted 4.5 million time-based restricted share unit awards to our employees, which primarily vest in substantially equal installments over three years. Additionally, in March 2025, NCLH granted 1.1 million performance-based restricted share units to certain members of our management team, which vest upon the achievement of certain pre-established performance targets established through 2027 and the satisfaction of an additional time-based vesting requirement that generally requires continued employment through March 1, 2028.

The following is a summary of restricted share unit activity for the six months ended June 30, 2025:


	Number of	Weighted-		Number of	Weighted-
	Time-Based	Average Grant		Performance-	Average Grant
	Awards	Date Fair Value		Based Awards	Date Fair Value
Non-vested as of January 1, 2025	8,923,718	$	17.68	2,265,422	$	18.04
Granted	4,637,034		21.95	1,107,504		21.95
Vested	(4,264,798)		17.51	(376,068)		18.48
Forfeited or expired	(367,558)		18.93	(243,556)		17.04
Non-vested as of June 30, 2025	8,928,396		19.92	2,753,302		19.65

The following is a summary of option activity for the six months ended June 30, 2025:


	Number of Share Option Awards	Weighted-Average Exercise Price		Weighted-Average	Aggregate
	Time-	Time-		Contractual	Intrinsic
	Based	Based		Term	Value
	Awards	Awards		(years)	(in thousands)
Outstanding as of January 1, 2025	2,173,443	$	55.20	0.61	$	—
Forfeited and cancelled	(1,508,500)		55.36
Outstanding as of June 30, 2025	664,943		54.84	0.38		—

The compensation expense recognized for share-based compensation for the periods presented includes the following (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Payroll and related expense	$	5,408	$	5,077	$	10,232	$	9,691
Marketing, general and administrative expense		20,491		17,907		35,948		35,241
Total share-based compensation expense	$	25,899	$	22,984	$	46,180	$	44,932

10. Commitments and Contingencies

Ship Construction Contracts

For the Oceania Cruises brand, the second Allura Class Ship, Oceania Allura, at approximately 68,000 Gross Tons and 1,200 Berths, was delivered in July 2025. We refer you to Note 13 – “Subsequent Event” for additional information. For the Norwegian brand, we have three Prima Class Ships on order, each ranging from approximately 156,000 to 169,000 Gross Tons with 3,565 to 3,840 Berths, with currently scheduled delivery dates from 2026 through 2028. For the

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Norwegian brand, we also have an order for four additional ships, each at approximately 227,000 Gross Tons and 5,000 Berths, with currently scheduled delivery dates from 2030 through 2036. For the Oceania Cruises brand, we also have an order for four Sonata Class Ships, each at approximately 86,000 Gross Tons and 1,390 Berths, with currently scheduled delivery dates from 2027 through 2035. For the Regent Seven Seas Cruises brand, we have an order for two Prestige Class Ships, each at approximately 77,000 Gross Tons and 822 Berths, with currently scheduled delivery dates in 2026 and 2030. The impacts of initiatives to improve environmental sustainability and modifications that NCLH plans to make to its newbuilds to improve their profitability and better space out the newbuilds, along with shipyard availability, have resulted in us resetting delivery dates for certain expected ship deliveries. These and other impacts could result in additional delays in ship deliveries in the future, which may be prolonged.

As of June 30, 2025, the combined contract prices, including amendments and change orders, of the 12 ships then on order for delivery (including Oceania Allura but excluding the two Sonata Class Ships on order for Oceania Cruises that we previously had the option to cancel as of June 30, 2025) was approximately €17.2 billion, or $20.3 billion based on the euro/U.S. dollar exchange rate as of June 30, 2025. The combined contract prices of the two additional Sonata Class Ships on order for delivery as of July 2025 was approximately €1.8 billion, or $2.1 billion based on the euro/U.S. dollar exchange rate as of June 30, 2025. For ships on order, 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 currently 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 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.

As of June 30, 2025, our minimum annual payments for non-cancelable ship construction contracts, which exclude the two Sonata Class Ships with the previously existing options to cancel as of June 30, 2025, were as follows (in thousands):


Year	Amount
Remainder of 2025	$	914,674
2026		2,431,439
2027		2,492,610
2028		2,303,634
2029		1,102,347
2030		2,511,831
Thereafter		7,496,742
Total minimum annual payments	$	19,253,277

In July 2025, we confirmed the last two Sonata Class Ships and also reset certain ship delivery dates. The table below reflects these changes on our minimum annual payments (in thousands):


Year	Amount
Remainder of 2025	$	865,832
2026		2,383,676
2027		2,491,194
2028		1,516,540
2029		1,326,469
2030		3,353,478
Thereafter		9,498,450
Total minimum annual payments	$	21,435,639

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Litigation

Investigations

In March 2020, the Florida Attorney General announced an investigation related to the Company’s marketing during the COVID-19 pandemic. Following the announcement of the investigation by the Florida Attorney General, we received notifications from other attorneys general and governmental agencies that they are conducting similar investigations. The Company is cooperating with these ongoing investigations, the outcomes of which cannot be predicted at this time.

Helms-Burton Act

On August 27, 2019, a lawsuit was filed against Norwegian Cruise Line Holdings Ltd. in the United States District Court for the Southern District of Florida under Title III of the Cuban Liberty and Solidarity (Libertad) Act of 1996, also known as the Helms-Burton Act. The complaint, filed by Havana Docks Corporation (the “Havana Docks Matter”), alleges it holds an interest in the Havana Cruise Port Terminal, which was expropriated by the Cuban Government. The complaint further alleges that the Company “trafficked” in the property by embarking and disembarking passengers at the facility, as well as profiting from the Cuban Government’s possession of the property. The plaintiff seeks all available statutory remedies, including the value of the expropriated property, plus interest, treble damages, attorneys’ fees and costs. After various motions challenging the sufficiency of plaintiff’s complaint were resolved and voluminous discovery was completed, both sides filed motions for summary judgment. On March 21, 2022, the court issued an order granting plaintiff’s motion for summary judgment on the issue of liability and denying the Company’s cross-motion for summary judgment. The court scheduled a trial on determination of damages only for November 2022. The plaintiff elected to seek what the court ruled to be its baseline statutory damage amount, which was the amount of the certified claim plus interest, trebled and with attorneys’ fees. Given this, there was no fact issue to be tried, and the matter was removed from the trial calendar. On December 30, 2022, the court entered a final judgment of approximately $112.9 million and, on January 23, 2023, the Company filed a notice of appeal from that judgment. On April 12, 2023, the Company posted a sufficient supersedeas bond with the court to prevent any efforts by the plaintiff to collect on the judgment pending the appeal. On June 30, 2023, the Company filed its opening appellate brief with the United States Court of Appeals for the Eleventh Circuit. On September 29, 2023, the plaintiff filed its answering brief responding to the Company’s opening brief in the Eleventh Circuit. On May 17, 2024, the Eleventh Circuit heard oral argument on the matter. On October 22, 2024, the Eleventh Circuit reversed the trial court in the pending matter and dismissed the claim. We believe that the likelihood of loss related to this matter is reasonably possible but not probable at this time; therefore, no liability has been recorded.

Other

In the normal course of our business, various other claims and lawsuits have been filed or are pending against us. Most of these claims and lawsuits are covered by insurance and, accordingly, the maximum amount of our liability is typically limited to our deductible amount. Nonetheless, the ultimate outcome of these claims and lawsuits that are not covered by insurance cannot be determined at this time. We have evaluated our overall exposure with respect to all of our threatened and pending litigation and, to the extent required, we have accrued amounts for all estimable probable losses associated with our deemed exposure. We are currently unable to estimate any other potential losses beyond those accrued, as discovery is not complete nor is adequate information available to estimate such range of loss or potential recovery. However, based on our current knowledge, we do not believe that the aggregate amount or range of reasonably possible losses with respect to these matters will be material to our consolidated results of operations, financial condition or cash flows. We intend to vigorously defend our legal position on all claims and, to the extent necessary, seek recovery.

Other Contingencies

The Company also has agreements with its credit card processors that govern approximately $3.6 billion in advance ticket sales at June 30, 2025 that have been received by the Company relating to future voyages. These agreements allow the credit card processors to require under certain circumstances, including the existence of a material adverse change, excessive chargebacks and other triggering events, 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

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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. We may be required to pledge additional collateral and/or post additional cash reserves or take other actions in the future that may adversely affect our liquidity.

11. Other Income (Expense), Net

For the three and six months ended June 30, 2025, other income (expense), net was expense of $156.4 million and $180.9 million, respectively, and for the three and six months ended June 30, 2024, other income (expense), net was income of $1.9 million and $20.0 million, respectively, primarily due to net gains and losses on foreign currency remeasurements of our euro-denominated debt.

12. Supplemental Cash Flow Information

For the six months ended June 30, 2025 and 2024, we had non-cash investing activities consisting of changes in accruals related to property and equipment of $44.7 million and $36.3 million, respectively.

13. Subsequent Event

In July 2025, we took delivery of Oceania Allura. We have export credit financing in place for 80% of the contract price. The associated €570.4 million term loan bears interest at a fixed rate of 1.50% with a maturity date of July 10, 2037. Principal and interest payments are payable semiannually.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement Concerning Forward-Looking Statements

Some of the statements, estimates or projections contained in this report are “forward-looking statements” within the meaning of the U.S. federal securities laws intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained, or incorporated by reference, in this report, including, without limitation, our expectations regarding our results of operations, future financial position, including our liquidity requirements and future capital expenditures, plans, prospects, actions taken or strategies being considered with respect to our liquidity position, including with respect to refinancing, amending the terms of, or extending the maturity of our indebtedness, our ability to comply with covenants under our debt agreements, expectations regarding our exchangeable notes, valuation and appraisals of our assets, expectations regarding our deferred tax assets and valuation allowances, expected fleet additions and cancellations, including expected timing thereof, our expectations regarding the impact of macroeconomic conditions and recent global events, and expectations relating to our sustainability program and decarbonization efforts may be forward-looking statements. Many, but not all, of these statements can be found by looking for words like “expect,” “anticipate,” “goal,” “project,” “plan,” “believe,” “seek,” “will,” “may,” “forecast,” “estimate,” “intend,” “future” and similar words. Forward-looking statements do not guarantee future performance and may involve risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in those forward-looking statements. Examples of these risks, uncertainties and other factors include, but are not limited to the impact of:

●

adverse general economic factors, such as fluctuating or increasing levels of interest rates, inflation, unemployment, underemployment, tariff increases and trade wars, the volatility of fuel prices, declines in the securities and real estate markets, and perceptions of these conditions that decrease the level of disposable income of consumers or consumer confidence;

●

our indebtedness and restrictions in the agreements governing our indebtedness that require us to maintain minimum levels of liquidity and be in compliance with maintenance covenants and otherwise limit our flexibility in operating our business, including the significant portion of assets that are collateral under these agreements;

●

our ability to work with lenders and others or otherwise pursue options to defer, renegotiate, refinance or restructure our existing debt profile, near-term debt amortization, newbuild related payments and other obligations and to work with credit card processors to satisfy current or potential future demands for collateral on cash advanced from customers relating to future cruises;

●

our need for additional financing or financing to optimize our balance sheet, which may not be available on favorable terms, or at all, and our outstanding exchangeable notes and any future financing which may be dilutive to existing shareholders;

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the unavailability of ports of call;

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future increases in the price of, or major changes, disruptions or reductions in, commercial airline services;

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changes involving the tax and environmental regulatory regimes in which we operate, including new and existing regulations aimed at reducing greenhouse gas emissions;

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the accuracy of any appraisals of our assets;

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our success in controlling operating expenses and capital expenditures;

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adverse events impacting the security of travel, or customer perceptions of the security of travel, such as terrorist acts, armed conflict or threats thereof, acts of piracy, and other international events;

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public health crises and their effect on the ability or desire of people to travel (including on cruises);

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adverse incidents involving cruise ships;

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our ability to maintain and strengthen our brand;

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breaches in data security or other disturbances to our information technology systems and other networks or our actual or perceived failure to comply with requirements regarding data privacy and protection;

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changes in fuel prices and the type of fuel we are permitted to use and/or other cruise operating costs;

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mechanical malfunctions and repairs, delays in our shipbuilding program, maintenance and refurbishments and the consolidation of qualified shipyard facilities;

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the risks and increased costs associated with operating internationally;

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our inability to recruit or retain qualified personnel or the loss of key personnel or employee relations issues;

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impacts related to climate change and our ability to achieve our climate-related or other sustainability goals;

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our inability to obtain adequate insurance coverage;

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implementing precautions in coordination with regulators and global public health authorities to protect the health, safety and security of guests, crew and the communities we visit and to comply with related regulatory restrictions;

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pending or threatened litigation, investigations and enforcement actions;

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volatility and disruptions in the global credit and financial markets, which may adversely affect our ability to borrow and could increase our counterparty credit risks, including those under our credit facilities, derivatives, contingent obligations, insurance contracts and new ship progress payment guarantees;

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our reliance on third parties to provide hotel management services for certain ships and certain other services;

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fluctuations in foreign currency exchange rates;

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our expansion into new markets and investments in new markets and land-based destination projects;

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overcapacity in key markets or globally; and

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other factors set forth under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 27, 2025 (our “Annual Report on Form 10-K”).

The above examples are not exhaustive and new risks emerge from time to time. There may be additional risks that we currently consider immaterial or which are unknown. Such forward-looking statements are based on our current beliefs, assumptions, expectations, estimates and projections regarding our present and future business strategies and the environment in which we expect to operate in the future. You are cautioned not to place undue reliance on the forward-looking statements included in this report, which speak only as of the date made. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in our

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expectations with regard thereto or any change of events, conditions or circumstances on which any such statement was based, except as required by law.

Solely for convenience, certain trademark and service marks referred to in this report appear without the ® or ™ symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and service marks.

Terminology

This report includes certain non-GAAP financial measures, such as Adjusted Gross Margin, Net Yield, Net Cruise Cost, Adjusted Net Cruise Cost Excluding Fuel, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS. Definitions of these non-GAAP financial measures are included below. For further information about our non-GAAP financial measures including detailed adjustments made in calculating our non-GAAP financial measures and a reconciliation to the most directly comparable GAAP financial measure, we refer you to “Results of Operations” below.

Unless otherwise indicated in this report, the following terms have the meanings set forth below:

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2024 Exchangeable Notes. On May 8, 2020, pursuant to an indenture among NCLC, as issuer, NCLH, as guarantor, and U.S. Bank National Association, as trustee, NCLC issued $862.5 million aggregate principal amount of exchangeable senior notes due 2024.

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2025 Exchangeable Notes. On July 21, 2020, pursuant to an indenture among NCLC, as issuer, NCLH, as guarantor, and U.S. Bank National Association, as trustee, NCLC issued $450.0 million aggregate principal amount of exchangeable senior notes due 2025.

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2027 1.125% Exchangeable Notes. On November 19, 2021, pursuant to an indenture among NCLC, as issuer, NCLH, as guarantor, and U.S. Bank National Association, as trustee, NCLC issued $1,150.0 million aggregate principal amount of exchangeable senior notes due 2027.

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2027 2.5% Exchangeable Notes. On February 15, 2022, pursuant to an indenture among NCLC, as issuer, NCLH, as guarantor, and U.S. Bank National Association, as trustee, NCLC issued $473.2 million aggregate principal amount of exchangeable senior notes due 2027.

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Adjusted EBITDA. EBITDA adjusted for other income (expense), net and other supplemental adjustments.

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Adjusted EPS. Adjusted Net Income divided by the number of diluted weighted-average shares outstanding.

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Adjusted Gross Margin. Gross margin adjusted for payroll and related, fuel, food, other and ship depreciation. Gross margin is calculated pursuant to GAAP as total revenue less total cruise operating expense and ship depreciation.

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Adjusted Net Cruise Cost Excluding Fuel. Net Cruise Cost Excluding Fuel adjusted for supplemental adjustments.

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Adjusted Net Income. Net income (loss) adjusted for the effect of dilutive securities and other supplemental adjustments.

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Allura Class Ships. Oceania Cruises’ Vista and Oceania Cruises’ Allura.

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Berths. Double occupancy capacity per cabin (single occupancy per studio cabin) even though many cabins can accommodate three or more passengers.

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Capacity Days. Berths available for sale multiplied by the number of cruise days for the period for ships in service.

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Dry-dock. A process whereby a ship is positioned in a large basin where all of the fresh/sea water is pumped out in order to carry out cleaning and repairs of those parts of a ship which are below the water line.

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EBITDA. Earnings before interest, taxes, and depreciation and amortization.

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EPS. Earnings (loss) per share.

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GAAP. Generally accepted accounting principles in the U.S.

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Gross Cruise Cost. The sum of total cruise operating expense and marketing, general and administrative expense.

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Gross Tons. A unit of enclosed passenger space on a cruise ship, such that one gross ton equals 100 cubic feet or 2.831 cubic meters.

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Net Cruise Cost. Gross Cruise Cost less commissions, transportation and other expense and onboard and other expense.

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Net Cruise Cost Excluding Fuel. Net Cruise Cost less fuel expense.

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Net Yield. Adjusted Gross Margin per Capacity Day.

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Occupancy Percentage. The ratio of Passenger Cruise Days to Capacity Days. A percentage greater than 100% indicates that three or more passengers occupied some cabins.

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Passenger Cruise Days. The number of passengers carried for the period, multiplied by the number of days in their respective cruises.

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Prestige Class Ships. Regent’s Seven Seas Prestige and one additional ship on order.

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Prima Class Ships. Norwegian Prima, Norwegian Viva, Norwegian Aqua, Norwegian Luna and two additional ships on order.<

Norwegian Cruise Line Holdings Ltd. 10-Q