Norwegian Cruise Line (NCLH) 9 Aug 222022 Q2 Earnings call transcript

Good morning, and welcome to the Norwegian Cruise Line Holdings Business Update and Second Quarter 2022 Earnings Conference Call. My name is Darryl, and I will be your operator. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session and instructions for the session will follow at that time. [Operator Instructions] As a reminder to all participants, this conference call is being recorded. to Vice conference ESG President Communications. like host, to and now John, Jessica of would turn over the your Corporate I Investor Relations, Ms. please John, proceed.

us which, everyone. Kempa, to Thank with Line business and Norwegian the and I'm Frank Officer. you good Mark Chief Darryl, and by After call. will Frank opening second Executive call morning, today Rio, begin you, for the XXXX and update call joining Cruise closing Del and discuss Financial for joined Holdings; to Vice earnings Chief Executive will handing commentary. our quarter our Frank of Thank President Mark follow before remarks. President financials for back Officer

We call open will then the for questions. your

call Company's on conference simultaneously As www.nclhltd.com/investors. at a Investor website is the this webcast being Relations reminder,

for a call also be may Both on call, will reference We presentation following make and presentation will for the during this Relations which slide available today's call. our replay website. conference XX Investor days found to be

Before to we few a like cover would items. I begin,

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

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

and for us you, joining and you Thank thank good everyone, Jessica, morning, today.

call, operational. pivotal we first to we our had be becoming march fully several operator we fleet in major cruise have the last back just post-pandemic recovery. reached quarters, steady past On the the ship welcomed milestones to our as last many of our service, continue Over the

pleased quarter. report turning reached another are second milestone cash to we with that have key This quarter, the flow operating for we positive

on to can't us reflect have on and and future, again occasion industry While I the travel our I opportunities team in tremendous alongside their lie the cruise and the ahead. year more than a proud since of community ago, but focus we see that we throughout immensely an profitable over well launching can take be impressive is great when for just thank who that journey. our agent has delivering them help support our appreciate come the overcome, progress Norwegian made rising the back time the also importantly, have Working tremendous entire a results. moment We anyone challenges for more been as can this unyielding to

a our in been by to consistent on clear focused strategy maintained and disciplined emphasizing mindset expand have of and our have go-to-market refine ramp-up We strategy. over market-to-fill price continuing bundling and and our methodical and value

long-term pricing. industry-leading Our our to our XXXX continue guiding in our we the means the plan, equity options by focus to be long-term tactical protecting opportunistic, in for our all of sustainable favor accelerate of the short forefront intentional this a Company, particularly business making of term brand and This building on has and the at also With sacrifices exploring ethos results. recovery. profitability long-term principle been beyond, on

and are our which in see several tailwinds company outlined the for landscape, serve catalysts on slide X. I current As I

This discontinued month, COVID-XX ships. was has regulatory hospitality since industry. and environment, has to seen regulations, bringing very its mitigation COVID-XX which us strong First, local guests. industry's the signal This paved cruise by way that to committed an rest land-based improvement of begin us and allowed the CDC public protocols program spoke, but quite alternatives, significantly and our us barriers effective. the voluntary closer. align further positive the to the We're have CDC health removing plans development for the robust we the not we and by confidence relax and equal a leisure COVID-related Last last management us more vacation for in for with are of footing

always, changes we regulations. own yesterday, to effective a to Xrd, Just announced health safety and local are number September protocols, of and our which subject as are

regardless unvaccinated We to of U.S. vaccination it test vaccinated will those to are or related our those XX requirement on protocols, negative embarking choose To in ports have provide of put testing and relaxed no will have pre-cruise longer of any embarkation. to have hours within any and not simply, who proof individuals, sailing ship vaccination a mandatory including no ships, will length. NCLH longer from protocols, required be prior

In where XX be we a There continue protocols kind. our remain and These years requirements will flexibility wider Bermuda or us meaningful Greece local are addition, variety will travel-related with younger our with guests to and a and reduce for all from comply requirements, strict vaccination modifications guests Canada, including old any additional of hassles and greater exempt population, give testing jurisdictions reach and to mandates. friction bring to cruising and few itineraries.

three year. In instant one was fact, best catalyst, announcement booking yesterday's resulting the of an days top in our of

easing we commitment lifting and crew safety environment. testing of health even the to the to onerous cruise, adapt restrictions the enter to of this is continue top one-day Across significant reopening the of we well-being operating to communities June too Our to travel us the requirement of changing ports unwavering bringing U.S. closer our evolving visit. health, see remains And in of and public and example SailSAFE guests, normal globe, as a are the One easing this to is our protocols the we environment. priority

late degree, booking change and announcement. future volumes decision ship on this quarters lesser immediate was While a periods an in and a in boost following in sustained sailing resulted weeks the of second, have for year, the impact too meaningful to a third to the in the

more economic at show a in willingness which cruise week-over-week, we abounding the on the spend broad touch consumer, marketplace, I extent fears level, trends high recession upmarket detail will on the in and to improvement and slowdown Second, travel, a to steady see continue continuing strong with two booking despite to evaluate typically we of key later call. indicators. consumers and in monitor But to

be time future, is both a window. own expectations. it window, purchase. psyche the into we the peek First And booking which within relatively ticket the is about not our and a in that provides seen cracks high long and the the any range To cruise have booking consumer remains emerge clear, given of dynamics lead historical

generation was onboard continue a situation has now per about quarter, as the day to even passenger ships. real-time ramp how right cruise than up impressive, of is onboard our comparable we generation, while XX% guests are all and during occupancy continued more Second carrying revenue second guests and to indicator XXXX which Onboard the our feeling revenue across now higher is classes. onboard our In cabin their approximately ships be financial revenue period.

in an more points We spend. continue from and ever overall of enhancing time offerings to results arrive board which to with our capture touch focus on to guests on booking the our pre-cruise, higher fresher wallet, with allowing ultimately revenue even bundled increasing starting guests market-leading quality

for up our given proposition. consumer. And to level, even are pre-cruise want to At average versus double pre-book travel Hotel guests And goods, a 'XX during a who airline a basis see the over in economic consumer the for vacation broader tend pullback affluent spending or pre-cruise XXXX guests believe XX% physical fares our that daily strong has revenue spend better purchases high occupancies near on economy onboard and Consumers fact, peaks. per pandemic on downturns. the day record who continue reaching we and make rates strong passenger propensity of do particularly for value capture unmatched to In activities. from remain land-based levels. positioned is levels, not approximately second alternatives experienced at than a quarter while cruises much with spending experiences, demand we

in for to believe While experiences particular consumer outperform well industry, we this positioned best in cruise is entire appetite the environment. our for company bodes

and XX have to and the while three the X, already delivery with on last on upscale focus back Cruise in drive Norwegian significant where last just not ships, indications our catalyst from to six than abated. cohorts will to attractive approximately other Prima, all industry most to total bottom higher-end line. experiences Our demographic skewed travel our for consumer, The brands builds, immune touch first Line top pipeline Norwegian resilient and of fleet world-class XX,XXX And outlined berths. I intent on categories, therefore, respective that of to bringing of we exciting are more took their the downturns. which the contributions not has enhance new proven previous greatly is providing slide arguably relative want fleet which towards this week came next-generation and Italy our I vessels

We she as incredible. And christening to is later truly this of her firsthand month encourage in celebrate Iceland. are I Reykjavik, ceremony to excited you her experience all

as Line Prima been the evolution is positioning which of seen Viva, clients’ debut to Norwegian most also the In reinforce in slide celebrated this fact, cruise marks Norwegian brands built. X. major float class in and further and The peers as guest we our of is groundbreaking vessel upscale vessel providing in Last each and the expected complex our experience most will on Cruise an Fincantieri, the class of Cruise the experiences second partner, design our differentiate of has cruise as ever aspect they summer categories. XXXX, leaders in shipbuilding class, have for Prima to Prima said The Line compared Norwegian new the week, demanding elevated. every of have out the

that we to new spring addition up to delivery 'XX Oceania the add In in Regent our we in will the expecting of answer few premium segments. Norwegian dominance I Seven new Seas the whether These profitably the and the Grandeur also often year. for are upper luxury we Vista growth yes. later further get are vessels, of years. additions absorb gearing and asked that confident we resounding a capacity And for can next is the flourishing are

Given only we have XX many still relatively underserved the our world. base small ships, of and markets around unserved

even to our refurbishment more existing more attract emphasize provide and continually our to innovating fleet bundle this high-paying through are can't new value offering offerings even builds our I enhancing product guests upgrades and enough. enhancements brands. and We to and making our to our

on trend. years continue deliver once fully So, the growth, operating to I expect will cash contributions to slide adjusted EBITDA show proven and flow our relative ability we've we and X again this and over to capacity revenue, absorb how you our capacity outsized

our to demand slide X. now on trends summarized booking, Turning and pricing

second the improvement see we In sequential line was foundation for remain quarter, in record and load the expectations the significant disciplined to factor laying our XX%, our and XX%. continue versus quarter XXXX with on and prior We as approximately a focused improvement a of beyond.

factors XX% for the is quarter to already increase steady at until July low historical third XXXX. We levels sequential the continue to with expect beginning in range quarter, XX%. the load XXX%-plus reach ramp coming we This to in second of expected

and we XX, emphasizing In half is significant of XXXX normalized X, as first over net high-quality We integrity terms diem our market-to-fill pricing of pricing, by post on the results our with price. of the and versus see optimal strategy, slide this continually you once These over outlined firm half a go-to-market on low maintaining of sustainable pricing fully discount-to-fill in pandemic. environment holding was path our XX%. slide to believe value first deliver can growth return at XXXX to are of consistent strategy absolutely profitability per high the on

effect quarter. taking to which dilutive into of extraordinarily future for the our and credits second of the is primarily impact by cruise strong XXXX of primarily when from second XXXX the Ukraine to premium in Omicron when expected, priced be below higher conflict. of the the compared the XXXX, even half and half lasting position said, XXXX, an pricing itineraries Russia-Ukraine the third book As conflict, Baltic remains concentrated continues That impacts driven consideration

and significantly year And we is to performance. booking share record And year XXXX extraordinary Pricing level focus to this naturally is XXXX's has is this with while one performance As higher of continue increases while build indeed also the across XXXX, XXXX's book our sail excess and is to time. had currently needed we on XXXX, would higher typically just provide will area our I is full. full long-term in reached tend level a as line pricing move of this XX% three by factors in running strategy over recent brands. you on short-term level with transition detail, beyond as this And we position working consistently off XX% intended. weeks record testament to pace our XXXX. not of in so it in for for all that focusing Pricing above double our is pricing it load digits price nevertheless that for is book steadfast -- our

Another XX% proof the books will I higher. XXXX time XX%, that sailings already into same XXXX to ticket for in XXXX onetime point on compared is are sales When the provide of XXXX account capacity growth sales a whopping approximately sailings. and taking for

our past air In the proven as level our to a of times own in higher 'XX include significantly sailings has of which through ticket indeed is the be seen quality stickiness expected travel improve, addition, to and in X for programs, stickier. the XXXX, sales booked proportion air bookings, also

demonstrating build. ticket consumer Another positive our is indicator sales demand strong advance

This increased a see slide On to over our the sales sales of over quarter, level basis, of Company. $X.X quarter, As gross record ticket in stood billion represents XX, approximately million $X quarter, years. by advance highest $X.X ticket at build $XXX the balance the billion an on XX% billion recognized. of high can prior despite the the you up revenue as three second end for in the ATS balance versus all-time advance

that subject quarter-end In within entire ATS is bottom now that balance and The addition, bookings of before. approximately associated more to ever $X.X the final line cancellation team already is than total our with payment window, billion penalties. energized at therefore, the are is

public reach this XXXX year and record welcoming through striving XXXX, of leveraging our are EBITDA adjusted additional be after especially ships and navigate to net maximize goal We our to record yields in all for to opportunities X easy and as feat, we but This fleet macroeconomic, will Prima encouraging to regulatory continue an uncertain value environment. health our an stakeholders. an not increasingly

all we be for scenarios. back I'll his call We up today are closing the for a for later. taking confident steps right prepared our turn I'll little over But financial commentary now, are success. the us to for that Mark And position. to set on with I'm future comments Mark?

good and morning, Thank you, Frank, everyone.

nearly to Their dedication, team I on recovery my collective commentary propelling our if financial did team thank commitment and I would I across globe on Before plan. for be a members begin as outlook, and financial our our efforts us remiss results take and of we moment execute not excellence. continued are passion XX,XXX the to their forward continue to operational

date, We pandemic. progress since for operating first have the led has positive flow point cash of of inflection the the to tremendous generating time financial the quarter made to which the in significant start

our to second Turning results. quarter

of to the service early our During fleet returned quarter, back relaunch in we the with Norwegian May. full Spirit

key which the particular maximizing sailings over XX% months reflects and across regions in was Our Bermuda XXX% occupancy markets. with Caribbean load Numerous factor prior guidance, up strength approach achieved to ramping occupancy, recent quarter while and the line for in our and our XX%, pricing. with in methodical markets

sequential We continue levels approximately in for the cruise historical quarterly versus XXXX. the ticket factors of onboard second XXXX. pricing returning occupancies, revenue with generation total and quarter to up in expect quarter drove load XX% revenue increases per day passenger Strong to

weighted high by to impact single quarter, conflict the heavily third Russia-Ukraine levels. As of in Baltic, which to is we quarter. XXXX European, XXXX the impressive This considering metric itineraries, on digits third this we to increase premium-priced particular, the look the expect to compared are in

each fleet result canceled one were reminder, three sailings conflict, a redeployed or for of the of a our XX entirely and brand, were across modified. total including ships As a as

capacity America high headwind to addition, Pride the overcome. on further a yielding constraints In crew-related are of

protection. costs. recently, to Like pressures prices inflation chain remain on Turning as to prices across every moderate. partial continue a Fuel we supply hedge seen to also And experience but headwind, provides global beginning from XX, more company seen our have the constraints. globe, slide we program, and

XX% XXXX. position for added XX% and quarter opportunistically the the are of and our approximately have remainder to 'XX hedge hedged now We during for approximately

experiencing for beef of food although such We also green certain commodities, and recently on are as we seen shoots moderating prices have pressure pork. costs,

we starting and and early in 'XX. XXXX to are highs moderating shipping logistical experienced from see In costs addition, their

Our continue this work supply minimize to chain measures the find to impact. to and logistics around teams clock

Lastly, in related the to first incur associated safety half COVID-XX of our we with health XXXX, continued testing. and additional primarily costs to protocols,

expect leisure protocols and these we to industry the the with to continues down its costs ramp space, future. travel align in As the broader

fuel Guided strong decrease in in to investments for market Taken disciplined of to on demand-generating focus compared half. second fill the continue the half will term, cruise together, day, net XX% our near to a capacity adjusted we with XXXX approximately to the excluding core cost, we the strategy, foundation expect per laying marketing by in make a first XXXX.

too Looking still levels. guidance, ahead, to cruise to excluding in fuel net XXXX early expect is XXXX provide capacity while exceed it concrete per costs, day we

three remember Aside the both or youngest the hyperinflation, of we fact operators. fleet four years major and the of of now from normal have that

not milestones capital our XX. performance. Shifting expenditures, and upcoming interest on all expectations already the capacity. to guidance metrics, as during the the therefore, achieved cost for on as modeling, depreciation from additional of consumption out disposed any found help amortization, provided XX lays the we expense, financial can have the ships days, key financial like of unit with our revenue of be also not Slide pandemic, benefit have expectations well fuel We and capacity receive and which slide efficient To less removal key will quarters.

second the quarter As cash generated of positive million March. of the first we for previously after month for stated, approximately turning operating flow $XXX

service is half slightly this sidelines, second of just herculean a year is the XXX days over on were task are our ships adjusted the we no XXXX, leading the beginning of the we returning just fourth cash accomplishment. free to flow positive EBITDA achieve for to quarter. for that milestone aiming small The adjusted next after Given to ago positive

service All normal our yields to focus for to extremely is of record full well return a are our to record expected with stepping consistent to environment, position pricing for and discipline, on with the XXXX, and us more stones operating along these net EBITDA plan lead return adjusted where year. a

Moving to and our liquidity balance sheet.

quarter-end, of billion at originally $X existing cash position $X.X overall into through strong, of undrawn $X.X consisted in remains commitment. XXXX. commitment, liquidity $X an billion was Our billion This November billion approximately totaling extended which entered recently and XXXX, approximately March

We have we to clear backstop, facility draw and on view this that a currently as it. do not been we intend

the of the financial markets needs XX liquidity months, our However, on the payments believe flexibility. debt to undertook deliberate our measures pandemic current were previously result given profile. demonstrates meet choice our be debt trajectory, optimize in our we which during to and organically. deferred and the in we the proactive continue April, capital amortization the to extending we projections facility enhance felt was able we volatility Slide recent prudent to maturity will throughout the resumed pandemic. the in We Based

the payments export due, related agency-backed which of approximately majority our we is million $XXX financing. credit XXXX of for coming debt and respectively. The For million $XXX to full vast have year ship XXXX, remainder and of

well revolver up maturity. a This While Term facility, prior continue Both environment. return to consisting of on us to Loan to to billion high, normal which credit our XXXX operating related maturities the A. and well ramp positions we refinance more approximately surface, we expect operating as and is to of our appear $X.X

with environment. back financing to expected is to XX% rate our was 'XX high-cost rate out, new on X%. is the rising fixed all of next we debt by of XXXX, rate are prior detail we completing average After the our website. approximately fixed in than in ratio positioning weighted reminder, builds delivery The -- took February on approximately a time as XXXX, two transactions rate of secured incurred opportune three XXXX. Investor fixed Relations ago, debt detailed provide addition and at our for XXXX, to XX% pandemic us an debt upcoming we weeks a of with We fixed year-end that in during also payments double-digit breakdown schedule in today. This through optimization well current dislocation November approximately Prima debt year, the the markets seeing portfolio is balance cost the increase less For the additional by taking of the a sheet portfolio

to Turning XX. slide

today, in said this I've an compared growth have by XXXX XX% transformational we the as the investment XXXX, representing component As before growth thesis. next our in it pipeline to capacity repeat of few and will the years, underappreciated we over is believe company's

and and to efficient new have in an immediate expected structures, financing favorable profitability. Our resulting ships very boost

For In rates financing approximately the To ship, all new better averaging beginning scenario to our of the approximately help due mechanics due and Typically, an XX% the new cash understand preconstruction is typical the of of over milestones taking builds line. then slide ships out inflows X.X% with XX% outflows fixed various the committed the of on portfolio. cost signing. general, the installments order, lays illustrative delivery ship. in you contract is four at demonstrating associated XX at time the cost upon is tied

well facet in began sales of years. flows. of on receiving inflows significant a after but of already we in six export presales. XX% time. incredibly looks ticket credit expenditure mechanics cash this agency-backed deck financing cash This of financing the financial like flow delivery financing which, each I cost, However, order a we contract advanced timing months often predelivery efficient outlay covers over to also of statements, delivery capital ship the that continue in cases, attractive earlier, a we the is extremely line onboard time approximately the vessel, very form ECA-backed to Amortization signing this certain the better and received the same in new of while large mentioned committed cash vessel a also prior and to build and structure prior at max is In as overlooked An at important XX rates. payments are

guests to this the payments engine to from final due life. sailing, XXX typically that when cash days Given our come to are is a prior begins

typically in we business to as revenue from estimate, over of a continues million cash that build of bookings due. the final time payments a also cash million resulting receive to future the in for rough a range infusion vessel's to $XXX $XXX first As inflow into voyages become future prior sailing,

surrounding So, often concerns industry's have are new growth, welcome capacity excited coming we while we capacity online. hear the we and for

degree have only supply and We high are supply major incredibly cruise of into a four build chain, This, large. visibility with the ships builds industry of and a cost pipeline efficient for shipyards structure scale. for at us with differentiator coupled unique the industry, new can who of the financing the the globally

So, in but have have I am we with our made how company more for so pleased the importantly, progress the future. far, summary, positioned we

also While tailwinds, over facing have there evolves, I all comments. to on just eye post-pandemic that our significant normalcy we be future how continued to and that, a With turn we Frank return our industry-leading macroeconomic challenges the continue which for business the capacity including back bode it are a prospects. and for environment of discussed, closing close keeping I'll to growth well

World on we XX wrap Sustain, priorities. Sail provide we The our commitments and global ESG our on I'd before our update and aligned And & report published report program, we milestones. key up Mark. slide which SASB Oceans spoke, in an our comprehensive top June. second like you, Day last progress annual accomplishments highlights on disclosure Since remarks, prepared ESG Thank and our to outlines sustainability

stakeholders As providing as resiliency expanding Scope related data we to in training strengthening and greenhouse strive human as to and including including diversity data our and disclosed gas the assessment, through on critical data development. X to our disclosure, transparency risk reporting, we year, expanding this our emissions provide TCFD and focused climate well report, with improving capital

emissions this aim We XXXX. greenhouse of many year, zero us partners to operation our along and Earlier of also by journey. new net the are pursuing also with our include bring announced This value these that on all ambition as entire increased scope chain key we spans this assurance data of we gas we points. our to third-party important

recently key destinations previously, driver the with distribution, creation, is usage along ambition As storage have to fuels alternative associated globally of achieve one of actively said of institute's a development adapt these critical providers. members the is Methanol fuels. to and solutions infrastructure And we net the share and at joined the collaborate, our we support of the to producers, zero and fuels alongside are Institute we Methanol exploring. distributors technology methanol the

you evaluate a collectively try to other long-term I'd that some and And with continue key like we share to as of to alternative slide variety you fuels will We companies learnings over Q&A, I viable find call a solution. to find takeaways the leave can before on with turn XX.

'XX and recent sustainable vaccination a And tailwind. a stage long-term key testing our continue improving protocols, First, the is and are we achieving our including relaxation setting milestones and team and to return-to-normalcy. for health environment, execute The on on regulatory focused plan are public in beyond. our return-to-service entire as of profitability

is experiences, seeing desire our in particularly with Second, robust travel demographics upscale we the strong on and by target. This strength improving pricing a and spend brands strong onboard revenue demonstrated trends, generation. booking a are healthy to consumer our

the Lastly, we Operator? up a years lot our commentary we to as next your and are for questions. fleet profitable covered and We've today, call open additional excited have for ships I'll over eight our welcome the conclude the transformational Norwegian after we highly here store so Prima. in growth five

line with question from Our the Dan first Wells [Operator Politzer Instructions] comes Fargo. of

guys certainly you had So, some positive commentary XXXX. on

guys you to the XX% higher bridge than are I trying to this sales XXXX time first think, to from half Does pacing record. to of continue second a that a I'm is be gave the that pace function have cruise more of time set? going just is you costs Frank, or said is -- assume you moderating which EBITDA, pricing accelerate, going historically. to that which

Dan to everything. cruise welcome I industry. think it's and Look, Hi, the

levels. I to return see occupancies think to we're normal going

quarter certainly We expect second by begin that of to 'XX.

than 'XX XXXX. We expect higher be in pricing to

will of from more have XXXX, Remember, We of Splendor, no the was XXXX. few capacity, we X and delivery of Both months have which weeks roughly had the price the February full We towards of a last year. Prima. full contribution capacity. Grandeur year literally vessels end. in in of took have in delivered have of year a little more Regent in Encore high the bit months so of those Viva 'XX. of We'll We'll a Vista, or X

new extraordinary, So, deliveries are that we've ship got high-priced.

typical I going relaxing of is Today and a the accelerated really We throughout yesterday, day. tailwind. gangbusters also is to if we really trending last already instantly are including remarks, every protocols you is we seeing, as thing overall it But better -- yesterday and strong. have in mentioned believe some to coming today food it costs, that and saw his are day. be of We announcement Tuesday. green compared over that's as the costs experts, have where a shoots, fuel, control prepared think The Mark down, our inflation. including

'XX, telling record days which we absorbing have results pricing, record we record today, believe And that that a yield net therefore, capacity record here very in we load, easily. strongly so record you will EBITDA. that we're sit have in And we

new not further it's saying, ships only line highlight, line. have coming And what Dan, top to and the just of growth the to profitability the we on Frank's

load bit costs. where second given the be on focused are year. be. a will a It has factors been very lumpy continue for are our expected to We lumpy to half Obviously, XXXX

of nature. remember fixed in a costs are our to lot have You that

stated clearly, again, a look of in strong a we bit demand-generating And XXXX. board. it go unit that normalization you they dollars we building we a -- So are higher book we've into very on basis, second on marketing, when in i.e., XXXX. at the are for very spending But initiatives, the as little half expect across yes, XXXX

making we're today. not So incremental factor next We're for investment quarter. the the load chasing

are high-yielding, a profitable, lower we We on cost next year in EBITDA result year. believe focused a record XXXX, very which will

follow-up. Got then, it. just And my for

is this tracking headwind that, you unpack I up For a the additional know you or color, would if pricing assume digits. could given, high have guys third just Europe, obviously, Any single quarter, talked year. I about

seen of in land lay be you've just other strength extent the So a regions, of to the helpful. would kind

very, is strong. very Alaska Look, Yes.

out going We reposition Port doing well. which Ukraine considering Our with Europe Caribbean she's Bermuda very, doing the selling Baltic conflict. very there what's on doing well. all that very of over also is product Everglades, isn't large minute last took the back a is great. vessel to

European are And still, in revenue. are typically more underperforms in We on QX. our leaning stores of overall, better price both yields business, onboard ticket which and terms

the protocol was things the going we're think huge. improving. COVID. to the mentioned, that elimination through, visibility to in stuck I the situations because to of lumpiness. great of short, wonderful into of get one Remember, Americans had The didn't Europe We've term. chance book want advance. have some cruise simply be Mark the requirement people So, the testing take back country had the are in booking medium should they curve, about contact That's is impact over an industry way you like

that don't is pricing. occupancy, or want simply once the impact. of a any which term, long-term occur, sailing long has The It pricing at -- when it's the why finished. short-term the does. has it's we no impact it finished, the But is occupancy given run cumulative these long to tail. chase factor So, load Pricing expense of impact things short on no sailing,

maintain So truly across see, XX% since to you incredibly for consumer us, that as for extraordinary. especially pricing, high-paying can target pricing to the up in it's discipline, we be board XXXX important, is high-quality,

from of next line Montour Barclays. question Brandt Our comes the with

-- months adjusted positive of for and else talking when about when your weren't may in back ago sort were I'm But have to that, for deck for EBITDA like And the price. maybe But of of I just maybe little down not you was back there in shifted a on half bit up that giving the think bit. here. to know really that. terms little if impacted the just I anything look last looks just occupancy there want hairs you in you versus looking now expecting three like feel question. I quarter, in . that maybe Frank, it apologies covered near-term splitting it, So a the I

back only -- one. weeks last to don't It's lasting in it's the just us cruise weeks of Number relaxation about down get cumulative to the number Administration one. the guidelines, and requirement into just that, negative our occurred CDC test three which ago, yesterday, protocols. dropping The sustained issues around announcing I the been U.S., related so. Omicron, two, No, the the Biden number think took the on own

an I each those on average curve of volumes. events think as of one remarks, booking them improvement out. booking triggered is those we in had But the said seven a prepared bookings. about booking three in And months items, remember, on impact each -- one our positive

prices all strategy. -- early cruises you certain 'XX, for to took in won't willing get, back they've look that's the reached you we the a recession That to is I'm instant that. great have long or in cases, yields. recovery in COVID I you short-term impact. and We drop don't whether a where major it midyear, to months cruise for could, do like XX-plus mortgage the others, sell when and so. for not mid-July, years, but long-term so, managing never now XX we here term. were want this that not had on happened And 'XX We June, I levels. or not occupancy was for some dress and seven prices, the down basis. potatoes. and those it get companies We're just do happened months XXXX. chase their you shut say crazy around that. it. could and We yet is years future, the mashed the remind what into the business We're to our late next recession, XX-plus pre ridiculous So August order window some company when them, done to quarter in did you great not cases,

times, mashed disciplined is right XX% have because To run. If you XXXX ticket here a despite want of to got in more strategy, we're to that. increase be XX% for pricing the potatoes, now to -- And go factor it compared I've order companies that bad load you of good capacity to been and pricing gains. cruise doubt sacrifice power I a achieve managed the is books and times is, proof of elsewhere convinced a long don't how you our instant beyond this sales am formidable. doing on the XX in I've for shadow years. in in short-term your And brand long-term

I mashed the gross don't instant of little a you could us curious And sort And gave guidance for Thanks of to quick of modeling terms We walk net that, just a bit little just Frank. maybe was bring per it if that just only potatoes passing in because I the a on line I But a looks is PCD. the commission guys reason in elevated. know flight you a XQ bit higher was are that if and that transportation up And us. unpack for like bit can -- us like question XQ. that for revenue, from -- either. the or was little costs through you maybe you whatnot. revenue don't through that

Yes. It's morning. Mark. Good Hi Brandt.

ongoing going net, the be see elevated you QX of versus So structure. representative to cost -- cost in yes, when more gross QX, you see of And will a that's to gross slightly you compare our structure. will

where remarks, sailings, we a now years. given have which that think we've all revenue embarked on we prepared we in coming through so had next, speak. program quite bumped to our in many many cancellations, our ancillary line, have many we of had QX, for on stated dynamics the up air been may bit the the working gross I as But

So, starting costs the to that come you of are through. see

so I But heavily we think we're through the more it's see QX, you're pretty I think the Europe, to again, pricing, both strong speak. very going so, in considering obviously, And it's particularly going when be the at to coming a -- are and these And more in you norm the and level, to having result. these net, weighted, look still fact that impressive were in gross.

line Steve with Stifel. question is Our Wieczynski next coming of from the

where slowed a So, were of about a change this, pricing already one a and gotten improved level a in which the but today potentially Frank, from And this morning, lot. obviously, in book And of you've the is this to talked I stem position bookings May. we've bunch you've have go-to-market has a of versus discussed going bit bit, you your would back 'XX bit. questions actually kind but strategy, it's already assume little the good the all

the investors of also, have turn more that you a but So, -- not, moving what the I to the basically should give And this expect know question would if you push sense then, but to prepared 'XX booked us, than the this past? could get give book moved think around for forward calendar year terms I part could guess, of continue or be the don't be been will question we here north, historically. where you'll second us we've in is, of you pricing you guys versus should that being to in if where position accustomed we,

and remind lot there Good me Steve, try so your there morning, it a in something. question, all remember to if I'll was I miss

the at point, You converge. forever, some can't because time lines be ahead significantly

for terms very are in position. cumulative today XXXX we very, of we're So, pleased where book

back forward this recall, we was think calendar goes 'XX, Because you early stay today. and in it I to between and reached where in to we we now very us more get the balance the or I where I less are closer had expect As if would bookings August, pricing. optimal call advanced said XXXX,

book on If money fast, too table. you leave you the

you the by to want go and If having slow, to we book pay there. discount price to you'll fill, too don't later

I we that tailwinds We're instead don't to happy this than at. and where think We more maintain accelerate to focusing 'XX It point described be so ahead the it much So, itineraries. want the any to with because the want we we're with to to more help. optimum, we have. morning very far we price. going that want we on that pace booking is don't different we're But we had do in and had reached are that curve we were than today We it. thought all

Steve? morning this load discussed a I'm do bookings. going where three or push today. your looking are one to factors, load two to natural I we tailwind we tailwinds that again, believe So, I to pleased to are of that although, Not factors, Did have miss questions, accelerate

raise remarks, in next the but -- seen much or you be liquidity I know, their which seen to is we've do But it's liquidity understand Mark say you equity for point, probably question of to second a and fully we That fine. thing made competitors turn the it actually covers I'm see Frank. And No. pretty around some Mark, some then them kind your your talking question, prepared And tired was deal. going we've all, that of comments of profile going about. at this your debt here, you're some and sure be

maturities. that the that can of So, I be you never here I we want shouldn't I -- point this of said should just clear your -- take at cash we pretty be term your much near know raise to dilutive near-term flows over care given any say and expect I that able think all -- type to

Yes. Steve. Hi,

specifically, we meet the you've what over repeat more prepared it on our believe So needs some of and remarks based everything can called today, competitors all I in I'll something course we were the on look, around of we we see and What really my near-term is more of was seen from of focused the out again, refinancings recently pandemic. organically. was liquidity that And maturities.

amend our So, look our clean -- as put our loan A, this you plan have if year, and normal we extend our which power maturity our recovery. the end during term operating very to we revolver aside the and you at by and of path a facilities,

go to So, we to markets. have should we need that, capacity with still debt the

liquidity We've no before. this have pandemic. our that said We've raising We enough shareholders on through equity. via plans diluted

importantly, and forward. more we good we going to that. relatively continue feel path we we'll watch clean But have where So, are, a

So, we good feel today.

of next Scholes line questions with from the Patrick Our come Truist.

wonder current And into play market Diamond staffing your some just With staffing. itineraries does for not news with much the I some to enough and but how I canceling some understand but the relate out giving due came occupancy strategy, up pricing. pricing I perhaps completely to holding that that, Princess this rationale

staffing also strategy? the you much how us possible staffing give into environment just -- the So for again, play does folks? if with could update maybe And on an issues you general just some

to Look, Patrick, surprised board, the up to Yes. staffing not mentioned pretty what to back we're Quite was another crew the make of is you sourced it's see abundance Frank. on company. I that happen our immune But it. this frankly, internationally to normal.

vessel labor filling having We XX%. highest we the is vessel, to of that American except also are And our in know us the the and vessel service at yielding that crew it's that load have vessels, to not citizens. of Norwegian kept challenges brand, which issues vessel. unfortunately you have area one, is for only sourcing be that for And flag as that factor the she's we've and purposely crew requires with since American -- returned which from keeping XX% but that's us Pride America, our to

to to be and that's XX% to I XXX% factor we're higher that at factors in we But vessel have because Certainly, And cancel see and and edges. expect keep believe who there. expect overall people road our have we shortages. would go around the on like labor we year-end. at be time load to booked and -- demand every would disheartening of QX are by QX? it that level range. that should which, in said, lower the full We by that vessel purposely So, load occupancy But It's higher. is year-end, to be the keeping and go, occupancy. a pricing have return we And we Yes. back

Our questions Ciepiel Cleveland with of Vince from the Research. come line next

to maybe different as marketing, well. the you maybe a puts I angle. and to takes forward cost at of from restart costs, Obviously, fuel some of deal perspective pull lot elevated come here, with have and a prices with wanted

of about pretty and the fuel get point back something was well to asking You and planning that between that business costs that dialed assume normal thinking in more years call changed pricing were what market it EBITDA go you're just there way in seeing back some pre-COVID, neighborhood margins the low-XXs. in I'll the as any operating term ahead, prices and for relationship out business you think they the at to And longer before? that the with reason today? the has to you're I back maybe range, another is margins don't guess, is, the get in,

morning, Good Vince.

to So, your is no. the short answer question

seeing operating point the business example headwinds we the While leverage. X simplest that with monetary X Every of it's times for a pressures strong generally longer is X value. almost of very of have that point terms a other still yield the seeing, relationship. some of we we in cost cost is And is term, are near-term believe like every

taking internally, -- believe normalize sort that still we doing to the we at yet it's cost don't purposely. into that concrete board. as that. and what is, the when intact of to But have apart around remember structure full be to we you Obviously, we to we the that XXXX, full try give passengers very burden have early from have any cost we today, on out So, We're of of XXXX. look look guidance complement

expect load factors, think of We very be historical the second to back operate we margins. operate to just normalcy quickly. getting we to real reasonably beyond, be lumpy. we've consistently, So when doing you're and you to going setting our it's near-term there's very, look aside at mitigated look think leverage hedge like intact, we with But, which start And vessels historical to at operating able have said fully into I XXXX. program. that the I path think then 'XX But our fuel, which earlier, to said very appear as is we to see you a quarter metrics, for

maybe the encouraging booking And That's and morning, separately, where close-in occupancy And really a bookings quarter. a the Can maybe day improvement, length for record understand is I versus an you really yesterday, helpful. it commentary, the strong but bookings curve us of where guide on more update short-term a third on thinking they the less just at. from sounded are sequential about guess the help where at focus, booking perspective? and with where historically curve are is

historically, months. age XXXX. to about slightly the versus it's different focus nuances, closer each at level, the it's say, on of because curve bookings Look, that, months, Vince. well, as there primarily X lot brand would knowing has a our booking slightly X And a that elongated more today, XXXX There's than I

of a me take departure or I'll selling a versus 'XX departure. booking gave cabin you If departure, 'XX choice for a 'XX a a a

is But take We'll to business. of certainly, on that XXXX. we're attract pushing kind marketing 'XX are 'XX. our beyond So, not 'XX And investors of bookings, it. not geared and course. all we're We not discounting necessarily towards and focused believe

We're pleased delivery profitability, So operating. now and very the terms it's pleased fleet getting on in of that we pleased turned got margin, of we've EBITDA, a for all is beyond. cash on year. to metal yields, took back We're Prima. normal very very 'XX on to us, We're But focus, about positive. that the entire transition we XXXX pedal on

Our Robin with Farley of next questions the come line from UBS.

of questions have Most my addressed already. been

that. XX months maturities the ECA-related. next in they're the your you and potential if without you the there of about some those for capital much like to Thanks. so back extended borrow be pushed way -- go to on for And one look wonder Just could having markets to or I talk in

going -- that phenomenal meet while first Look, we are to to over our But have closely have organically. work needs really they commercial flexible. with organizations, foremost, ECA all and believe we're of liquidity our work -- and we all can and as lenders pandemic right? of said, been I've So, continue our been the too them, needs really

to in thriving. that not seen the there's want to to look would driving We are which any are at but to headwinds, going available we all And to the significant -- I options. options we'll near-term have growth. we're I is year, sure the as we've look think strong to the there. and there out look if forward, XX% more as capacity But a specifically any coming -- is we're industry or on ECAs past, tailwind, look at point speak, line going other lender, next so so that all make significant as

think is more the -- need do And to we do recovering. to that. that. the think So importantly, we needs industry don't industry We don't but

course we mind in where now year later, time flow. were the And We time, starting we this turning operate. to keep EBITDA. of Let's over last positive We're generating year. a were cash just are positive

flywheel is to to just started have has percolating, and machine the let it the speak. going. so So, keep We

we're need look, we arise. ever options, So, But at going to feel all look good. should the

Thank one just helpful. a And That's Great. No. Okay. you. then as clarification follow-up.

compared increase. Do about for onboard onboard XX% there Can that, percent versus in accounting you is the I a which or is just -- in I XX% bundling of think, talk once have being how you kind is that is bundling? QX was revenue talked for adjustment price of increase in a spent higher, -- is you like get kind that Thanks. in on board? fact did of than QX, remarkable ticket to it people what some of what allocate to You higher guess, that purely purposes 'XX, you that's or about revenue

board. now what started been will what the in certainly XXXX, since We on the I today's we're generating have they're late on we Well, that that seeing industry. remind from probably XXXX. consumer, spending everybody bundling it's on call

comparable nuances our There's always the clean. But comparison any are two sort on buckets. our of apples and oranges versus in results. between some basis So, XXXX not a numbers 'XX any are having we relatively

said, raised as we've -- raised prices. we've we So,

We've spend the before our consumers of that a more consumers of on consumer all they're or have they once steps also We board. the board, propensity board. of who pre-marketing about -- more, XX% spending. sense consumer in those who offerings terms creating urgency on stronger In talked of presales, about products, XX% our gotten smarter the on for are

today, So, feel spending today's dollars. the well strong seeing But we ourselves it's all that And industry. combination for We're of the are those. a and numbers bodes consumer a strong.

of question Jamie Katz comes the Morningstar. Our from with next line

as season competitive and the of given weakness strong you how that I any Thanks. using guys altered the and you And consumers on maybe sourcing marketing that question details you're in is that we've hearing how have around given have you're demand that been my advantage. European ahead a wave the just guess, seeing? primarily strategy plans then

be the you which We're plans first XXXX, since do going will the believe to was marketing cut QX wave. beginning of that our wave this with for pandemic. the not Yes. short true by I share coming

spend basic hesitancy and of that mandate And go-to-market look, In to book Mark U.S. negative prefer come Europe earlier, as because book European our American mentioned, for terms onboard higher to an little we category, sourcing, heavier board. cabin the the money all still many regardless consumer operating. the test Americans strategy. on of But European more back lifted, of partly is a sailings, we a until vessels leaned on to our is sourcing. by is itinerary Americans where to the travel to our

pricing we of Our demand European posted in and going accelerating higher pricing still that a marketplaces. bit, QX, sales bit. job in But a QX from spite marketing team And did pricing suffering European expect fantastic forward. of in suffered overall pricing higher a

done consumer American improved a high-quality those make so of do to or overall, we've the do of European the the because the in think think a best, like perhaps the I consumer our on mistake, most out the wealthiest, product sourcing has day, bit of more than job others, no Europe that. So, States. certainly we and at we they're rely we'll better But resilient, the we continue understand consumers end

helpful. That’s Thank you.

will for stay safe, of always, any Cruise much your day, Norwegian Holdings Line this to as your entire questions. everyone. team for available thank Well, your here a morning support. great and time The today Okay. you so answer be Have and at

today's call. conference does Thank conclude your participation. appreciate That We you.

of rest your Enjoy your disconnect the You can now lines. day.