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

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

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

NOTE 4 – FINANCIAL STATEMENT DETAILS

The following is a reconciliation of cash, cash equivalents and restricted cash to the statement of cash flows:

					*For the six months ended June 30,*
	For the six months ended June 30,				*2020*		*2019*
(In thousands)	2019		2018		(unaudited)		(unaudited)
	(unaudited)		(unaudited)
Cash and cash equivalents	$	78,746	$	91,561	$	80,897	$	78,746
Restricted cash		33,305		22,803		21,333		33,305
Total cash, cash equivalents and restricted cash as presented in the statement of cash flows	$	112,051	$	114,364	$	102,230	$	112,051

Restricted cash ~~consists~~consist of the following:

	As of June 30, 2019		As of December 31, 2018		*As of June 30, 2020*		*As of December 31, 2019*
(In thousands)	(unaudited)				(unaudited)
Federal Maritime Commission escrow	$	32,000	$	5,823	$	19,692	$	6,104
Certificates of deposit and other restricted securities		1,305		1,402		1,321		1,575
Credit card processor reserves		-		1,530		320		-
Total restricted cash	$	33,305	$	8,755	$	21,333	$	7,679

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~~Prepaid~~The Company’s prepaid expenses and other current assets consist of the following:

					*As of June 30, 2020*		*As of December 31, 2019*
(In thousands)	As of June 30, 2019		As of December 31, 2018		(unaudited)
	(unaudited)
Prepaid tour expenses	$	18,860	$	10,617	$	14,973	$	15,630
Prepaid corporate insurance		2,688		1,158
Prepaid client insurance		2,663		2,436		2,396		3,064
Prepaid air expense		2,585		2,973		3,069		4,415
Prepaid marketing, commissions and other expenses						2,175		4,026
Prepaid corporate insurance						712		1,376
Prepaid port agent fees		2,377		1,433		288		491
Prepaid marketing, commissions and other expenses		2,001		2,622
Prepaid income taxes		123		24		140		53
Total prepaid expenses	$	31,297	$	21,263	$	23,753	$	29,055

~~Accounts~~The Company’s accounts payable and accrued expenses consist of the following:

					*As of June 30, 2020*		*As of December 31, 2019*
(In thousands)	As of June 30, 2019		As of December 31, 2018		(unaudited)
	(unaudited)
Refunds and commissions payable					$	13,876	$	1,873
Accounts payable						9,869		14,633
Accrued other expense	$	10,778	$	11,851		7,841		8,348
Accounts payable		7,944		9,326
Bonus compensation liability		3,444		5,195		4,724		5,322
Employee liability		3,147		2,943		3,856		3,712
Foreign currency forward contract liability						2,083		1,300
Travel certificate liability						870		888
Accrued travel insurance expense						322		477
Income tax liabilities		1,988		576		2		603
Royalty payable		1,425		1,005		-		1,075
Refunds and commissions payable		1,107		1,533
Travel certificate liability		940		1,088
Accrued travel insurance expense		427		427
Total accounts payable and accrued expenses	$	31,200	$	33,944	$	43,443	$	38,231

Loan Receivable

The Company’s loan receivable is recorded at amortized cost within other long-term assets. The Company reviewed its loan receivable for credit losses in connection with the preparation of its condensed consolidated financial statements for the period ended June 30, 2020. In evaluating the allowance for loan losses, the Company considered factors such as historical loss experience, the type and amount of loan, adverse situations that may affect the borrower’s ability to repay and prevailing economic conditions. Based on these credit loss estimation and experience factors, the Company realized no allowance for loan loss for the three or six months ended June 30, 2020. The roll-forward of the loan receivable balance is as follows:

	Loan Receivable
(In thousands)		(unaudited)
Balance as of January 1, 2020	$	4,084
Accrued interest		79
Amortization of deferred costs		(12	)
Balance as of June 30, 2020	$	4,151

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NOTE 5 – LONG-TERM DEBT

	As of June 30, 2019									As of December 31, 2018									*As of June 30, 2020*									*As of December 31, 2019*
	(unaudited)																					(unaudited)
(In thousands)	Principal			Deferred Financing Costs, net			Balance			Principal			Deferred Financing Costs, net			Balance			*Principal*			*Deferred Financing Costs, net*			*Balance*			*Principal*			*Deferred Financing Costs, net*			*Balance*
Note payable	$	2,525		$	-		$	2,525		$	2,525		$	-		$	2,525		$	2,525		$	-		$	2,525		$	2,525		$	-		$	2,525
Revolving Facility																				45,000			(417	)		44,583			-			-			-
Credit Facility		198,000			(12,865	)		185,135			199,000			(11,436	)		187,564			196,000			(6,558	)		189,442			197,000			(9,704	)		187,296
1st Senior Secured Credit Agreement																				107,695			(1,883	)		105,812			-			-			-
2nd Senior Secured Credit Agreement																				61,120			(2,199	)		58,921			30,476			(2,229	)		28,247
Total long-term debt		200,525			(12,865	)		187,660			201,525			(11,436	)		190,089			412,340			(11,057	)		401,283			230,001			(11,933	)		218,068
Less current portion		(2,000	)		-			(2,000	)		(2,000	)		-			(2,000	)		(5,646	)		-			(5,646	)		(4,525	)		-			(4,525	)
Total long-term debt, non-current	$	198,525		$	(12,865	)	$	185,660		$	199,525		$	(11,436	)	$	188,089		$	406,694		$	(11,057	)	$	395,637		$	225,476		$	(11,933	)	$	213,543

For the three and six months ended June 30, 2020, deferred financing costs charged to interest expense were $0.5 million and $1.0 million, respectively. For the three and six months ended June 30, 2019, deferred financing costs charged to interest expense was $0.5 million and $0.9 million, respectively. ~~For the three and six months ended June 30, 2018, deferred financing costs charged to interest expense was $0.4 million and $1.0 million, respectively.~~

Credit Facility

In March 2018, the Company entered into the Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”), providing for a $200.0 million senior secured first lien term loan facility (the “Term Facility”), maturing March 2025, and a $45.0 million senior secured incremental revolving credit facility (the “Revolving Facility”), which includes a $5.0 million letter of credit sub-facility. The Term Facility bears interest at an adjusted Intercontinental Exchange (“ICE”) Benchmark administration LIBOR plus a spread of 3.25%, for an aggregated rate of ~~5.648%~~3.41% as of June 30, ~~2019.~~2020.

During March 2020, the Company drew $45.0 million against the Revolving Facility as a reserve for general corporate purposes and other expense needs due to the uncertainty related to the COVID-19 pandemic. Borrowings under the Revolving Facility ~~may be used~~mature March 27, 2023 and bear interest at an adjusted ICE Benchmark administration LIBOR plus a spread of 3.00%, for ~~general corporate and working capital purposes and related fees and expenses. As~~an aggregated rate of 3.16% as of June 30, ~~2019, the Company had no borrowings under the Revolving Facility.~~2020.

Senior Secured Credit ~~Agreements~~Agreements

In January 2018, the Company entered into a senior secured credit agreement (the “Export Credit Agreement”) with Citibank, N.A., London Branch and Eksportkreditt Norge AS, ~~to make~~which made available to the Company a loan in an aggregate principal amount not to exceed $107.7 million for the purpose of providing financing for up to 80% of the purchase price of the Company’s new ice class vessel, the National Geographic Endurance ~~targeted to be completed in January 2020. If drawn upon,~~ . During March 2020, the ~~loan will be made at the time of delivery~~Company took possession of the ~~vessel.~~National Geographic Endurance and borrowed $107.7 million under the Export Credit Agreement for final payment. The Export Credit Agreement ~~at the Company's election, will bear~~bears interest ~~either~~ at ~~a fixed interest rate effectively equal to 5.78% or~~ a floating interest rate equal to ~~three-month~~three-month LIBOR plus a margin of 3.00% per ~~annum.~~annum, for an aggregated rate of 3.31% over the borrowing period covering June 30, 2020.

On In April 8, 2019, the Company entered into a senior secured credit agreement (the “Second Export Credit Agreement”) with ~~Citibank, N.A., London Branch (“Citi”) and Eksportkreditt Norge AS (“EK” and together with Citi,~~ the ~~“Lenders”).~~Lenders. Pursuant to the Second Export Credit Agreement, the Lenders have agreed to make available to the Company, at the Company's option and subject to certain conditions, a loan in an aggregate principal amount not to exceed $122.8 million for the purpose of providing pre- and ~~post- delivery~~post-delivery financing for up to 80% of the purchase price of the Company’s new expedition ice-class ~~cruise~~ vessel, ~~targeted~~the National Geographic Resolution, scheduled to be ~~completed~~delivered in the fourth quarter of 2021.30% of the borrowing will mature over five years from the final drawdown, and 70% of the borrowing will mature over twelve years from the final drawdown. Additionally, 70% percent of the loan will be guaranteed by Garantiinstituttet for Eksportkreditt, the official export credit agency of Norway. In September ~~2021.~~ 2019 and April 2020, the Company drew approximately $30.5 million and $30.6 million, respectively, under the Second Export Credit Agreement for contracted installment payments on the National Geographic Resolution.

The Second Export Credit Agreement bears a variable interest rate equal to three-month LIBOR plus a margin of 3.00% per annum, or 3.31% over the borrowing period covering June 30, 2020. After completion of the vessel, the Second Export Credit Agreement, at the Company’s option, will bear an interest rate ~~at the Company’s option,~~ of either a fixed rate of 6.36% or a variable rate equal to ~~three-month~~three-month LIBOR plus a margin of 3.00% per annum. ~~30%~~

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The Company has also amended both its export credit agreements and term loan and revolving credit facilities. During June 2020, the Company amended its export credit agreements to defer approximately $9.0 million in aggregate scheduled amortization payments from June 2020 through March 2021 and to suspend the total net leverage ratio covenant from June 2020 through June 2021. On August 7, 2020, the Company amended its term loan and revolving credit facilities to waive the application of the ~~borrowing will mature over five years from drawdown, and 70%~~total net leverage ratio covenant through June 2021. In connection with the amendment, the interest rate of the ~~borrowing will mature over twelve years from drawdown. Additionally, 70% percent~~term loan has been increased by 125bps, to be paid-in-kind at maturity, a LIBOR floor of ~~the loan will~~75bps has been added to each facility and certain covenants have been amended to be guaranteed by Garantiinstituttet for eksportkreditt, the official export credit agency of Norway. The Company incurred approximately $2.3 million in financing fees related to the Second Export Agreement, recorded as deferred financing costs as part of long-term debt. more restrictive.

Note Payable

In connection with the Natural Habitat acquisition in May 2016, Natural Habitat issued an unsecured promissory note to Benjamin L. Bressler, the founder of Natural Habitat, with an outstanding principal amount of $2.5 ~~million due at maturity on December 31, 2020.~~million. The promissory note accrues interest at a rate of 1.44% annually, with interest payable every six months. On May 1, 2020, the promissory note was amended, changing the maturity date of the principal payments to be due in three equal installments with the first payment due on December 22, 2020, the second on December 22, 2021 and the final payment on December 22, 2022.

Other

On April 10, 2020, the Company received a U.S. Small Business Administration Loan related to the COVID-19 crisis in the amount of $6.6 million. The Company subsequently returned the funds received from this loan.

Covenants

The Company’s Amended Credit Agreement, Export Credit Agreement and Second Export Credit Agreement contain financial and restrictive covenants that include among others, net leverage ratios, minimum liquidity, limits on additional indebtedness and limits on certain investments. As of June 30, ~~2019,~~ 2020, the Company was in compliance with its covenants.

NOTE 6 – FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Derivative Instruments and Hedging Activities

The Company’s derivative assets and liabilities consist principally of foreign exchange forward contracts and interest rate caps and are carried at fair value based on significant observable inputs (Level 2 inputs). Derivatives entered into by the Company are typically executed over-the-counter and are valued using internal valuation techniques, as quoted market prices are not readily available. The valuation technique and inputs depend on the type of derivative and the nature of the underlying exposure. The Company principally uses discounted cash flows along with fair value models that primarily use market observable inputs. These models take into account a variety of factors including, where applicable, maturity, currency exchange rates, interest rate yield curves and counterparty credit risks.

Currency Risk. The Company uses currency exchange contracts to manage its exposure to changes in currency exchange rates associated with certain of its non-U.S.-dollar denominated receivables and payables. The Company primarily hedges a portion of its current-year currency exposure to several currencies, which normally include, but are not limited to, the Canadian and New Zealand dollars, the Brazilian Real, the South African Rand, ~~Indian Rupee,~~ the Euro and the British pound sterling. The fluctuations in the value of these forward contracts largely offset the impact of changes in the value of the underlying risk they economically hedge.

In March 2019, the Company entered into foreign exchange forward contracts, designated as cash flow hedges, to hedge its exposure to Norwegian Kroner ("NOK"), related to the Company’s contract to purchase the new polar ice-class vessel (see Note 11 – Commitments and Contingencies). The cost of the foreign exchange forward contracts will be amortized to interest expense over their lives, from the effective date through settlement dates.

Interest Rate Risk. The Company uses interest rate caps, designated as cash flow hedges, to manage the risk related to its floating rate corporate debt.

The Company records the effective portion of changes in the fair value of its cash flow hedges to other comprehensive income (loss), net of tax, and subsequently reclassifies these amounts into earnings in the period during which the hedged transaction is recognized. Any changes in fair values of hedges that are determined to be ineffective are immediately reclassified from accumulated other comprehensive income (loss) into earnings. No gains or losses of the Company’s cash flow hedges were considered to be ineffective ~~and~~for the period ended June 30, 2020. The Company reclassified $5.3 million from other comprehensive income (loss) to earnings for the ~~six-month~~ period ended June 30, ~~2019.~~2020 due to the maturity of a cash flow hedge and the hedged item. The Company estimates that approximately ~~$0.4~~$2.1 million of losses currently recorded in accumulated other comprehensive income (loss) will be recognized in earnings over the next 12 months due to maturity of the cash flow hedge and the hedged item. The Company will continue to assess the effectiveness of the hedges on an ongoing basis.

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The Company held the following derivative instruments with absolute notional values as of June 30, ~~2019:~~2020:

(in thousands)

Absolute Notional Value

Interest rate caps
$ 100,000
Foreign exchange contracts
157,316

(in thousands)	Absolute Notional Value
Interest rate caps	$	100,000
Foreign exchange contracts		96,097

Estimated fair values (Level 2)2) of derivative instruments were as follows:

As of
June 30, 2019

As of
December 31, 2018

(unaudited)

(in thousands)

Fair Value, Asset
Derivatives

Fair Value, Liability
Derivatives

Fair Value, Asset
Derivatives

Fair Value, Asset
Derivatives

Derivatives designated as hedging instruments

Foreign exchange forward ^(a)
$ - $ 1,536 $ - $ -
Interest rate cap ^(b)
420 - 710 -
Total
$ 420 $ 1,536 $ 710 $ -
Derivatives not designated as hedging instruments

Foreign exchange forward ^(c)
$ - $ 171 $ - $ 1,328
Total
$ - $ 171 $ - $ 1,328

~~_________~~

As of June 30, 2020

As of December 31, 2019

(unaudited)

(In thousands)

Fair Value, Asset Derivatives

Fair Value, Liability Derivatives

Fair Value, Asset Derivatives

Fair Value, Liability Derivatives

Derivative instruments designated as cash flow hedging instruments:

Foreign exchange forward ^(a)
$ - $ 8,464 $ - $ 4,459
Interest rate cap ^(b)
- - 138 -
Total
$ - $ 8,464 $ 138 $ 4,459
Derivative instruments not designated as cash flow hedging instruments:

Foreign exchange forward ^(c)
$ - $ 1,607 $ 459 $ 70
Total
$ - $ 1,607 $ 459 $ 70
__________

^(a)
Recorded in accounts payable and accrued expenses, and other long-term liabilities.
^(b)
Recorded in prepaid expenses and other current assets, and other long-term assets.
^(c)
Recorded in prepaid expenses and other current assets, and accounts payable and accrued expenses.

Changes in the fair value of the Company’s hedging instruments are recorded in accumulated other comprehensive income, pursuant to the guidelines of cash flow hedge accounting as outlined in ASC 815.

The effects of derivatives recognized in the Company’s condensed consolidated financial statements were as follows:

Three Months Ended
June 30,

Six Months Ended
June 30,

(In thousands)

2019

2018

2019

2018

(unaudited)

(unaudited)

(unaudited)

(unaudited)

Derivatives designated as hedging instruments ^(a):

Foreign exchange forward contracts
$ (516
)
$ - $ 972 $ -
Interest rate caps
140 (73
)
289 (73
)

Derivatives not designated as hedging instruments ^(b):

Foreign exchange forward contracts
501 (1,141
)
1,157 (1,592
)
Total
$ 125 $ (1,214
)
$ 2,418 $ (1,665
)
~~__________~~

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

2020

2019

2020

2019

Derivative instruments designated as cash flow hedging instruments:

(unaudited)

(unaudited)

(unaudited)

(unaudited)

Foreign exchange forward ^(a)
$ (9,272 ) $ (516 ) $ 4,005 $ 972
Interest rate cap ^(b)
16 140 138 289

Derivative instruments not designated as cash flow hedging instruments:

Foreign exchange forward ^(c)
1,447 501 (1,996 ) 1,157
Total
$ (7,809 ) $ 125 $ 2,147 $ 2,418

(a)
For the three and six months ended June 30, 2020, $5.3 million was recognized as a loss on foreign currency in the condensed consolidated statements of income, and a $3.9 million gain and a $9.3 million loss, respectively, was recognized, net of tax, as a component of other comprehensive income (loss) within stockholders’ equity.
(b)
Recognized, net of tax, as a component of other comprehensive income (loss) within stockholders’ ~~equity.~~equity
^(b)(c)
Gains (losses) related to derivative instruments are expected to be largely offset by (losses) gains on the underlying exposures being hedged. During the three and six months ended June 30, 2020, a gain of $1.4 million and a loss of $2.0 million was recognized in gain (loss) on foreign currency. During the three and six months ended June 30, 2019, a gain of $0.5 million and $1.2 million, respectively, was recognized in gain (loss) on foreign currency. ~~During the three and six months ended June 30, 2018, a loss of $1.1 million and $1.6 million, respectively, was recognized in gain (loss) on foreign currency.~~

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Fair Value Measurements

The carrying amounts of cash and cash equivalents, accounts payable and accrued expenses, approximate fair value due to the short-term nature of these instruments. The carrying value of long-term debt approximates fair value given that the terms of the agreement were comparable to the market as of June 30, ~~2019.~~ 2020. As of June 30, ~~2019~~ 2020 and December 31, ~~2018,~~ 2019, the Company had no other significant liabilities that were measured at fair value on a recurring basis.

NOTE 7 – STOCKHOLDERS’ EQUITY

Stock and Warrant Repurchase Plan

The Company’s Board of Directors approved a stock and warrant repurchase plan (“Repurchase Plan”) in November 2015 and increased the repurchase plan to $35.0 million in November 2016. The Repurchase Plan authorizes the Company to purchase, from time to time, the Company’s outstanding common ~~stock and warrants.~~stock. Any shares ~~and warrants~~ purchased will be retired. The Repurchase Plan has no time deadline and will continue until otherwise modified or terminated at the sole discretion of the Company’s Board of Directors. These repurchases exclude shares repurchased to settle statutory employee tax withholding related to the exercise of stock options and vesting of stock awards. All repurchases were made using cash resources. During the three ~~and six~~ months ended ~~June 30, 2019,~~ March 31, 2020, the Company repurchased ~~1,895~~8,517 shares of common stock for approximately ~~$23,000.~~$127,000. The Company has cumulatively repurchased ~~866,701~~875,218 shares of common stock for ~~$8.2~~$8.3 million and 6,011,926 warrants for $14.7 million, since plan inception. The remaining balance for the Repurchase Plan was ~~$12.1~~$12.0 million as of June 30, ~~2019.~~2020. During March 2020, the Repurchase Plan was suspended due to the uncertain impact of the COVID-19 virus.

~~Warrants~~
During the six months ended June 30, 2019, 2,600 warrants to purchase the Company's common stock were exercised. As of June 30, 2019, 10,085,474 warrants were outstanding to purchase common stock at a price of $11.50 per share. On July 17, 2019, the Company completed a consent solicitation and exchange offer relating to the Company’s outstanding warrants (see Note 13NOTE 8 – ~~Subsequent Event for more information).~~
~~NOTE 8 – STOCK-BASED~~STOCK-BASED COMPENSATION

The Company is authorized to issue up to 2.5 million shares of common stock under the 2015 Long-Term Incentive Plan to directors and key employees, and as of June 30, ~~2019,~~ 2020, approximately ~~1.3~~1.1 million shares were available to be granted.

As of June 30, ~~2019,~~ 2020 and December 31, ~~2018,~~ 2019, options to purchase an aggregate of 200,000 ~~and 220,000~~ shares ~~respectively,~~ of the Company’s common stock, with a weighted average exercise price of $9.47, ~~and $9.63, respectively,~~ were outstanding. As of June 30, ~~2019, 100,000~~2020, 150,000 options were exercisable.

The Company recorded stock-based compensation expense of $0.7 million and $1.6 million during the three and six months ended June 30, 2020, respectively, and $1.0 million and $1.8 million during the three and six months ended June 30, ~~2019, respectively, and $1.1 million and $2.0 million during the three and six months ended June 30, 2018, respectively.~~2019.

~~2019~~2020 Long-Term Incentive Compensation

During the six months ended June 30, ~~2019,~~ 2020, the Company granted ~~105,406~~150,575 restricted stock units ("RSUs") with a weighted average grant price of ~~$15.16.~~$5.41. The RSUs will vest, ~~in equal installments~~dependent on ~~each of~~ the grant, either on the first ~~three anniversaries~~ anniversary of the grant date or in equal installments over a three-year period, subject to the recipient’s continued employment or service with the Company on the applicable vesting date. The number of shares were determined based upon the closing price of our common stock on the date of the award. The RSUs granted during the six months ended June 30, 2020 represent 50% of the 2020 long-term incentive compensation RSU awards. Due to the circumstances related to the impact of the COVID-19 virus, the compensation committee of the Company's Board of Directors approved the deferral of a portion of the RSU awards, and determined that the remaining 50% of the grants shall be made in equal portions on September 30, 2020 and December 31, 2020.

During the six months ended June 30, ~~2019,~~ 2020, the Company awarded ~~61,631 of~~86,783 targeted performance stock units ("PSUs") with a weighted average grant price of ~~$15.25.~~$5.42. The PSUs are performance-vesting equity incentive awards that ~~may~~will be earned based on ~~the Company's~~our performance against metrics relating to annual Adjusted EBITDA and annual revenue. Awards ~~if earned,~~ will vest after a ~~three-year~~three-year performance period and may be earned at a level ranging from 0%-200% of the number of PSUs granted, depending on performance. The number of shares were determined based upon the closing price of ~~the Company's~~our common stock on the date of the award. The PSUs granted during the six months ended June 30, 2020 represent 50% of the 2020 long-term incentive compensation PSU awards. Due to the circumstances related to the impact of the COVID-19 virus, the compensation committee of the Company's Board of Directors approved the deferral of a portion of the PSU awards, and determined that the remaining 50% of the grants shall be made in equal portions on September 30, 2020 and December 31, 2020.
Natural Habitat Contingent Arrangement
In connection with the acquisition of Natural Habitat, Mr. Bressler, the founder of Natural Habitat, has an equity incentive opportunity to earn an award of options based on the future financial performance of Natural Habitat, where if the Final Year Equity Value of Natural Habitat, as defined in Mr. Bressler's amended employment agreement, exceeds $25.0 million, effective as of December 31, 2023, Mr. Bressler will be granted options with a fair value equal to 10.1% of such excess, subject to certain conditions.

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NOTE 9 – RELATED PARTY TRANSACTIONS

~~The Company and National Geographic Society collaborate on exploration, research, technology and conservation~~ In May 2016, in order to provide travel experiences and disseminate geographic knowledge around the globe. The Lindblad/National Geographic Society alliance is set forth in (i) an Alliance and License Agreement and (ii) a Tour Operator Agreement. The extension of the agreements, entered into July 2015, between the Company and National Geographic Society was contingent on the execution by Mr. Lindblad,connection with the Company's ~~Chief Executive Officer,~~acquisition of Natural Habitat, Natural Habitat issued an ~~option agreement granting National Geographic Society~~unsecured promissory note to Mr. Bressler, the ~~right to purchase from Mr. Lindblad,~~founder of Natural Habitat, with an outstanding principal amount of $2.5 million. The promissory note was amended during May 2020, see Note 5 – Long-term Debt for a per share price of $10.00 per share, five percent of the issued and outstanding shares of the Company’s common stock as of July 8, 2015, including all outstanding options, warrants or other derivative securities (excluding options granted under the 2015 Plan and shares issuable upon the exercise of warrants). During March 2019, National Geographic Society exercised its rights in full under the option agreement to acquire the shares, and in a cashless transaction acquired shares from Mr. Lindblad.more information.


NOTE 10 – INCOME TAXES

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The measurement of net deferred tax assets is reduced by the amount of any tax benefit that, based on available evidence, is not expected to be realized, and a corresponding valuation allowance is established. The determination of the required valuation allowance against net deferred tax assets was made without taking into account the deferred tax liabilities created from the book and tax differences on indefinite-lived assets.

The Company accounts for income taxes using the asset and liability method, under which it recognizes deferred income taxes for the tax consequences attributable to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities, as well as for tax loss carryforwards and tax credit carryforwards. The Company measures deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recoverable or settled. The Company recognizes the effect on deferred taxes of a change in tax rates in income in the period that includes the enactment date. The Company provides a valuation allowance against deferred tax assets if, based upon the weight of available evidence, the Company does not believe it is ~~“more-likely-than-not”~~“more-likely-than-not” that some or all of the deferred tax assets will be realized. The Company will continue to evaluate the deferred tax asset valuation allowance balances in all of ~~its~~our foreign and U.S. companies to determine the appropriate level of valuation allowances.

The Company is subject to income taxes in both the U.S. and the non-U.S. jurisdictions in which it operates. The Company regularly assesses the potential outcome of current and future examinations in each of the taxing jurisdictions when determining the adequacy of the provision for income taxes. The Company has only recorded financial statement benefits for tax positions which it believes reflect the ~~“more-likely-than-not”~~“more-likely-than-not” criteria of FASB’s authoritative guidance on accounting for uncertainty in income taxes, and it has established income tax reserves in accordance with this guidance where necessary. Once a financial statement benefit for a tax position is recorded or a tax reserve is established, the Company adjusts it only when there is more information available or when an event occurs necessitating a change. While the Company believes that the amount of the recorded financial statement benefits and tax reserves reflect the ~~more-likely-than-not~~more-likely-than-not criteria, it is possible that the ultimate outcome of current or future examinations may result in a reduction to the tax benefits previously recorded on its condensed consolidated financial statements or may exceed the current income tax reserves in amounts that could be material. As of June 30, ~~2019,~~ 2020, and December 31, ~~2018,~~ 2019, the Company had a liability for unrecognized tax benefits of ~~$0.1 million and $0.6 million, respectively, which was included in other long-term liabilities.~~$0.0 million. The Company’s policy is to record interest and penalties on uncertain tax positions as a component of income tax expense. During the three and six months ended June 30, ~~2019~~ 2020 and ~~2018,~~2019, interest and penalties related to uncertain tax positions included in income tax expense are not significant. The Company's effective tax rate for the three and six months ended June 30, ~~2019 and 2018~~ 2020 was a benefit of ~~18.7%~~6.9% and 10.1%, respectively, versus an expense of ~~4.5%, respectively.~~39.4% and a benefit of 18.7% for the three and six months ended June 30, 2019, respectively, primarily due to the timing of losses in the first quarter and the expected amount of losses for the full year 2020 due to the impact of COVID-19 on the Company's operations.

The Company is subject to tax audits in all jurisdictions for which it files tax returns. Tax audits by their very nature are often complex and can require several years to complete. Currently, there are no U.S. federal, state or foreign jurisdiction tax audits pending. The Company’s corporate U.S. federal and state tax returns for the current year and three prior years remain subject to examination by tax authorities and the Company’s foreign tax returns for the current year and four prior years remain subject to examination by tax ~~authorities (except for the Ecuador entities, where the Company's foreign tax returns for the current year and three prior years remain subject to examination by tax authorities).~~authorities.


NOTE 11 – COMMITMENTS AND CONTINGENCIES

Fleet Expansion

In ~~2017,~~ February 2019, the Company entered into an agreement, which was amended in December 2019, with Ulstein Verft, to construct asecond polar ice class vessel, the National Geographic ~~Endurance,~~ with a total purchase price of 1,066.0 million NOK. Subsequently, the Company exercised its right to make payments in United States Dollars, which resulted in a purchase price of $134.6 million, including hedging costs. The purchase price is subject to potential adjustments from contract specifications for variations in speed, dead weight, fuel consumption and delivery date, and is due in installments. The first twenty percent of the purchase price was paid shortly after execution of the agreement with the remaining eighty percent due upon delivery and acceptance of the vessel. The vessel is targeted to be delivered in January 2020.
~~During February 2019, the Company entered into an agreement with Ulstein Verft, to construct a second polar ice class vessel, a sister ship of the~~ ~~National Geographic Endurance~~Resolution, with a total purchase price of 1,291.0 million NOK. The purchase price is subject to potential adjustments from contract specifications for variations in speed, dead weight, fuel consumption and delivery date. The purchase price is due in installments, with the first 20% paid shortly after execution of the agreement, 50% to be paid over the duration of the build and the final 30% due upon delivery and acceptance of the vessel. The vessel is targeted to be delivered in September 2021. During In March 2019, the Company entered into foreign exchange forward contracts to lock in a purchase price for the second polar ice class vessel of $153.5 million, subject to potential contract specification adjustments. The purchase price is due in installments, with 20% paid shortly after execution of the agreement, 20% in September 2019, 20% in April 2020 and 10% due in April 2021. The final 30% is due upon delivery and acceptance of the vessel. The vessel is scheduled to be delivered in the fourth quarter of 2021.

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Royalty Agreement – National Geographic

The Company is party to an alliance and license agreement with National Geographic, which allows the Company to use the National Geographic name and logo. In return for these rights, the Company is charged a royalty fee. The royalty fee is included within selling and marketing expense on the accompanying condensed consolidated statements of ~~income.~~operations. The amount is calculated based upon a percentage of certain ticket revenues less travel agent commission, including the revenues received from cancellation fees and any revenues received from the sale of pre- and post-expedition extensions. ~~A pre-~~Royalty expense for the three and ~~post-expedition extension occurs when a guest extends his or her trip with pre- or post-voyage hotel nights. Royalty expense~~six months ended June 30, 2020 was $0.1 million and $1.3 million, respectively, and for the three and six months ended June 30,2019, was $1.8 million and $3.3 million, ~~for the three and six months ended June 30, 2019, respectively, and $1.3 million and $2.1 million, for the three and six months ended June 30, 2018,~~ respectively.

The royalty ~~balance~~balances outstanding to National Geographic as of June 30, ~~2019~~ 2020 and December 31, ~~2018 was $1.4~~2019 were $0.0 million and ~~$1.0~~$2.2 million, respectively, and are included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets.

Royalty Agreement – World Wildlife Fund

Natural Habitat has a license agreement with WWF, which allows it to use the WWF name and logo. In return for these rights, Natural Habitat is charged a royalty fee and a fee based on annual gross sales. The fees are included within selling and marketing expense on the accompanying condensed consolidated statements of ~~income.~~operations. This royalty fee expense was $0.1 million and $0.2 million for the three and six months ended June 30,2020, respectively, and $0.2 million and $0.4 million for the three and six months ended June 30,2019, ~~respectively, and $0.1 million and $0.3 million for the three and six months ended June 30, 2018,~~ respectively.

Charter Commitments

From time to time, the Company enters into agreements to charter vessels onto which it holds its tours and expeditions. Future minimum payments on its charter agreements as of June 30, ~~2019~~ 2020 are as follows:

For the years ended December 31,

Amount

(In thousands)

(unaudited)

2020
$ 3,520
2021
9,536
2022
1,850
Total
$ 14,906
Natural Habitat Redeemable Non-Controlling Interest
Mr. Bressler, founder of Natural Habitat, retains a 19.9% noncontrolling interest in Natural Habitat, which is subject to a put/call arrangement. The arrangement between the Company and Mr. Bressler was established in order to provide a formal exit opportunity for Mr. Bressler and a path to 100% ownership for the Company. Mr. Bressler has a put option, amended in May 2020, that under certain conditions and subject to providing notice by January 31,2024, that enables him, but does not obligate him, to sell his remaining interest in Natural Habitat to the Company, valued as of December 31, 2023. The Company has a call option, but not an obligation, with an expiration of March 31, 2029, under which it can buy Mr. Bressler’s remaining interest at a similar fair value measure as Mr. Bressler’s put option, subject to a call purchase price minimum.
Since the redemption of the noncontrolling interest is not solely in the Company’s control, the Company is required to record the redeemable noncontrolling interest outside of stockholders’ equity but after its total liabilities. In addition, if it is probable that the instrument will become redeemable, as such solely due to the passage of time, the redeemable noncontrollable interest should be adjusted to the redemption value via one of two measurement methods.
The Company elected the income classification-excess adjustment and accretion methods for recognizing changes in the redemption value of Mr. Bressler’s put option. Under this methodology, a calculation of the present value of the redemption value is compared to the carrying value of the redeemable noncontrolling interest and the carrying value of the redeemable noncontrolling interest is adjusted to the redemption value’s present value. Any adjustments to the carrying value of the redeemable noncontrolling interest, up to the fair value of the noncontrolling interest, are classified to retained earnings. Adjustments in excess of the fair value of the noncontrolling interest, are treated as a decrease to net income available to common stockholders.
The fair value of Mr. Bressler’s put option was determined using a discounted cash flow model. The redemption value was adjusted to its present value using the Company’s weighted average cost of capital.
Charter Commitments

For the years ended December 31,

Amount

(In thousands)

(unaudited)

2019 (six months)
$ 4,230
2020
11,215
2021
2,765
2022
1,850
Total
$ 20,060
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The following is a rollforward of redeemable non-controlling interest:

Three Months Ended June 30,

Six Months Ended June 30,

(unaudited)

(unaudited)

(In thousands)

2020

2019

2020

2019

Beginning balance
$ 16,476 $ 6,908 $ 16,112 $ 6,502
Net income attributable to noncontrolling interest
(265 ) (137
)
(801
)
269
Fair value adjustment of put option
(6,241
)
- (5,341
)
-
Balance June 30,
$ 9,970 $ 6,771 $ 9,970 $ 6,771

Legal Proceedings

From time to time, the Company is party to litigation and regulatory matters and claims. The Company expenses legal fees as incurred. The Company records a provision for contingent losses when it is both probable that a liability will be incurred and the amount or range of the loss can be reasonably estimated. The results of complex proceedings and reviews are difficult to predict and the Company’s view of these matters may change in the future as events related thereto unfold. An unfavorable outcome to any legal or regulatory matter, if material, could have an adverse effect on the Company’s operations or its financial position, liquidity or results of operations.


NOTE 12 – SEGMENT INFORMATION

The Company is primarily a specialty cruise and adventure expedition operator with operations in two segments, Lindblad and Natural Habitat. The Company evaluates the performance of the business based largely on the results of its operating segments. The chief operating decision maker, or CODM, and management review operating results monthly, and base operating decisions on the total results at a consolidated level, as well as at a segment level. The reports provided to the Board of Directors are at a consolidated level and also contain information regarding the separate results of both segments. While both segments have similar characteristics, the two operating and reporting segments cannot be aggregated because they fail to meet the requirements for aggregation.

The Company evaluates the performance of its business segments based largely on tour revenues and operating income, without allocating other income and expenses, net, income taxes and interest expense, net. For the three and six months ended June 30, ~~2019~~ 2020 and ~~2018,~~2019, operating results were as follows:

For the three months ended
June 30,

For the six months ended
June 30,

For the three months ended June 30,

For the six months ended June 30,

2019

2018

Change

%

2019

2018

Change

%

2020

2019

Change
%
2020

2019

Change
%
(In thousands)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

Tour revenues:

Lindblad
$ 64,930 $ 59,556 $ 5,374 9 % $ 140,968 $ 130,009 $ 10,959 8 % $ (22 ) $ 64,930 $ (64,952 ) NM $ 69,517 $ 140,968 $ (71,451 ) (51 %)
Natural Habitat
11,728 9,917 1,811 18 % 25,343 21,874 3,469 16 % (246 ) 11,728 (11,974 ) NM 11,454 25,343 (13,889 ) (55 %)
Total tour revenues
$ 76,658 $ 69,473 $ 7,185 10 % $ 166,311 $ 151,883 $ 14,428 9 % $ (268 ) $ 76,658 $ (76,926 ) NM $ 80,971 $ 166,311 $ (85,340 ) (51 %)
Operating Income:

Operating (loss) income:

Lindblad
$ 5,302 $ 5,107 $ 195 4 % $ 18,943 $ 18,547 $ 396 2 % $ (31,641 ) $ 5,302 $ (36,943 ) NM $ (29,452 ) $ 18,943 $ (48,395 ) NM
Natural Habitat
(1,181 ) (900 ) (281 ) (31 )% (458 ) 32 (490 ) NM (3,105 ) (1,181 ) (1,924 ) NM (3,043 ) (458 ) (2,585 ) NM
Total operating income
$ 4,121 $ 4,207 $ (86 ) (2% ) $ 18,485 $ 18,579 $ (94 ) (1% )
Total operating (loss) income
$ (34,746 ) $ 4,121 $ (38,867 ) NM $ (32,495 ) $ 18,485 $ (50,980 ) NM

Depreciation and amortization are included in segment operating income as shown below:

For the three months ended
June 30,

For the six months ended
June 30,

For the three months ended June 30,

For the six months ended June 30,

2019

2018

Change

%

2019

2018

Change

%

2020

2019

Change
%
2020

2019

Change
%
(In thousands)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

Depreciation and amortization:

Lindblad
$ 5,774 $ 4,626 $ 1,148 25 % $ 11,568 $ 9,309 $ 2,259 24 % $ 7,939 $ 5,774 $ 2,165 37 % $ 14,188 $ 11,568 $ 2,620 23 %
Natural Habitat
408 368 40 11 % 802 729 73 10 % 614 408 206 50 % 1,055 802 253 32 %
Total depreciation and amortization
$ 6,182 $ 4,994 $ 1,188 24 % $ 12,370 $ 10,038 $ 2,332 23 % $ 8,553 $ 6,182 $ 2,371 38 % $ 15,243 $ 12,370 $ 2,873 23 %

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The following table presents ~~the~~our total assets, intangibles, net and goodwill by segment:

As of
June 30, 2019

As of
December 31, 2018

(In thousands)

(unaudited)

As of June 30, 2020

As of December 31, 2019

Total Assets:

(unaudited)

Lindblad
$ 428,055 $ 409,622 $ 600,062 $ 471,499
Natural Habitat
80,439 63,787 72,227 77,159
Total assets
$ 508,494 $ 473,409 $ 672,289 $ 548,658

Intangibles, net:

Lindblad
$ 3,688 $ 4,050 $ 2,962 $ 3,325
Natural Habitat
3,497 3,925 2,645 3,071
Total intangibles, net
$ 7,185 $ 7,975 $ 5,607 $ 6,396

Goodwill:

Lindblad
$ - $ - $ - $ -
Natural Habitat
22,105 22,105 22,105 22,105
Total goodwill
$ 22,105 $ 22,105 $ 22,105 $ 22,105

For the three and six months ended June 30, 2020, there were $0.0 million and $2.2 million in intercompany tour revenues between the Lindblad and Natural Habitat segments eliminated in consolidation, respectively. For the three and six months ended June 30, 2019 there were $0.7 million and $2.5 million in intercompany tour revenues between the Lindblad and Natural Habitat segments eliminated in consolidation, respectively. For the three and six months ended June 30, 2018 there were $0.4 million and $1.4 million in intercompany tour revenues between the Lindblad and Natural Habitat segments eliminated in consolidation, respectively.


NOTE 13 – SUBSEQUENT EVENT
The Company has rescheduled or rebooked all expedition voyages scheduled to sail through September 30, 2020 due to continued travel restrictions from the global spread of the COVID-19 virus.

On ~~June 14, 2019,~~ August 7, 2020, the Company ~~announced an offer~~amended its term loan and revolving credit facilities to ~~exchange all warrants to purchase common stock~~waive the application of the ~~Company (the "Warrant Exchange"). The Warrant Exchange provided (i) an offer~~total net leverage ratio covenant through June 2021. In connection with the amendment, the interest rate of the term loan has been increased by 125bps, to be paid-in-kind at maturity, a LIBOR floor of 75bps has been added to each ~~holder of the Company's outstanding warrants~~facility and certain covenants have been amended to receive 0.385 shares of common stock in exchange for each warrant tendered by the holder and exchanged pursuant to the Warrant Exchange, and (ii) the solicitation of consents (the "Consent Solicitation") from holders of the warrants to amend the warrant agreement that governs all of the warrants to permit the Company to require that each outstanding warrant not tendered in the Warrant Exchange be converted into 0.36575 shares of common stock. The Warrant Exchange and Consent Solicitation closed on July 17, 2019, with 9,935,000 warrants tendered via the Warrant Exchange for an aggregate of 3,824,959 shares of Company common stock, and approval was received to amend the warrant agreement to provide the Company with the right to require the holders of warrants not tendered in the Warrant Exchange to exchange their warrants for common stock of the Company at an exchange ratio of 0.36575 shares of common stock for each warrant. An aggregate of 150,474 warrants have not been tendered via the Warrant Exchange and will be converted into approximately 55,000 shares of Company common stock. Following such conversion, no warrants will remain outstanding.more restrictive.

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Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION

The following discussion and analysis addresses material changes in the financial condition and results of operations of the Company for the periods presented. This discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q (“Form 10-Q”), as well as the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February ~~28, 2019.~~26, 2020.

Cautionary Note Regarding Forward-Looking Statements

Any statements in this Form 10-Q about our expectations, beliefs, plans, objectives, prospects, financial condition, assumptions or future events or performance are not historical facts and are “forward-looking statements” as that term is defined under the federal securities laws. These statements are often, but not always, made through the use of words or phrases such as “believe,” “anticipate,” “should,” “intend,” “plan,” “will,” “expects,” “estimates,” “projects,” “positioned,” “strategy,” “outlook” and similar words. You should read the statements that contain these types of words carefully. Such forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from what is expressed or implied in such forward-looking statements. There may be events in the future that we are not able to predict accurately or over which we have no control. Potential risks and uncertainties include, but are not limited to:

●
~~general economic conditions;~~suspended operations and disruptions to our business and operations related to COVID-19;
●
the impacts of COVID-19 on our financial condition, liquidity, results of operations, cash flows, employees, plans and growth;
●
the impacts of COVID-19 on future travel and the cruise and airline industries in general;

●
unscheduled disruptions in our business due to travel restrictions, weather events, mechanical failures, pandemics or other events;

●
changes adversely affecting the business in which we are engaged;

●
management of our growth and our ability to execute on our planned growth;

●
our business strategy and plans;

●
our ability to maintain our relationship with National Geographic;

●
compliance with new and existing laws and regulations, including environmental ~~regulations;~~regulations and travel advisories and restrictions;

●
compliance with the financial and/or operating covenants in our debt arrangements;

●
adverse publicity regarding the cruise industry in general;

●
loss of business due to competition;

●
the result of future financing efforts;

●
delays and costs overruns with respect to the construction and delivery of newly constructed vessels;

●
the inability to meet revenue and Adjusted EBITDA projections; and

●
those risks discussed herein, in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, as filed with the SEC on February ~~28, 2019~~26, 2020 (the ~~“2018~~“2019 Annual Report”). and in Item 1A. Risk Factors in our Quarterly Report on Form 10-Q for the period ended March 31, 2020, as filed with the SEC on May 6, 2020.
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We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date of this Form 10-Q. We do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or uncertainties after the date hereof or to reflect the occurrence of unanticipated events.

Unless the context otherwise requires, in this Form 10-Q, “Company,” “Lindblad,” “we,” “us,” “our,” and “ours” refer to Lindblad Expeditions Holdings, Inc., and its subsidiaries.

Business Overview

~~Lindblad provides~~We provide expedition cruising and land-based adventure travel experiences, using itineraries that feature up-close encounters with wildlife, nature, history and culture, and promote guest empowerment and interactivity. Our mission is to offer life-changing adventures ~~and wildlife experiences~~ around the world and pioneer innovative ways to allow our guests to connect with exotic and remote places. Many of these expeditions involve travel to remote places, such as the Arctic, Antarctica, the Galápagos, Alaska, Baja's Sea of Cortez, Costa Rica, Panama, ~~polar bear tours in~~ Churchill ~~Canada, Alaskan grizzly bear adventures~~ and ~~African safaris.~~
Africa. We operate a fleet of ~~eight~~nine owned expedition ships and we have ~~also~~ contracted for ~~two~~a new polar ice class ~~vessels,~~vessel, the National Geographic ~~Endurance~~Resolution, ~~targeted~~scheduled to be ~~completed~~delivered in ~~January 2020, and a sister ship~~the fourth quarter of ~~the~~ ~~National Geographic Endurance~~~~, targeted to be completed in September~~ 2021.
In addition, we operate five seasonal charter vessels under the Lindblad brand. We deploy chartered vessels for various seasonal offerings and continually seek to optimize our charter fleet to balance our inventory with demand and maximize yields. We use our charter inventory as a mechanism to both increase travel options for our existing and prospective guests and ~~also~~ to test demand for certain areas and seasons to understand the potential for longer term deployments and additional vessel needs.

We have a longstanding relationship with the National Geographic Society dating back to 2004, which is based on a shared interest in exploration, research, technology and conservation. This relationship includes co-selling, co-marketing and branding arrangements with National Geographic Partners, LLC (“National Geographic”) whereby our owned vessels carry the National Geographic name and National Geographic sells our expeditions through their internal travel divisions. We collaborate with National Geographic on expedition planning to enhance the guest experience by having National Geographic experts, including photographers, writers, marine biologists, naturalists, field researchers and film crews, join our expeditions. Guests have the ability to interface with these experts through lectures, excursions, dining and other experiences throughout their expedition.

~~2019 Highlights~~COVID-19 Business Update

Due to the spread of the COVID-19 virus and the effects of travel restrictions around the world, we have suspended or rescheduled the majority of our expeditions departing March 16, 2020 through September 30, 2020 and have been working with guests to reschedule travel plans and refund payments, as applicable. The Company’s ships are currently being maintained with minimally required crew on-board to ensure they comply with all necessary regulations and can be fully put back into service quickly as needed. In accordance with local regulations, we closed our offices and most employees are working remotely to maintain general business operations, to provide assistance to existing and potential guests and to maintain information technology systems.
We moved quickly to implement a comprehensive plan to mitigate the impact of COVID-19 and preserve and enhance our liquidity position. We are employing a variety of cost reduction and cash preservation measures, while accessing available capital under our existing debt facilities and exploring additional sources of capital and liquidity. These measures include the following operating expense and capital expenditure reductions:
●
Significantly reduced ship and land-based expedition costs including crew payroll, land costs, fuel and food. All ships have been safely laid up.
● Lowered expected annual maintenance capital expenditures by over $10 million, savings of more than 50% from originally planned levels.
● Meaningfully reduced general and administrative expenses through staff furloughs, payroll reductions and the elimination of all non-essential travel, office expenses and discretionary spending.
● Suspended the majority of planned advertising and marketing spend.
● Deferred payment of the majority of bonuses earned for 2019 performance, as well as cash compensation for the Board of Directors.
● Suspended all repurchases of common stock under the stock repurchase plan.
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Bookings Trends
We were off to a strong start to the year with Lindblad segment bookings at the end of February up 25% for the full year 2020 as compared to the same point a year ago for 2019, and had sold 86% of its originally projected guest ticket revenues for the year. Since that point, we have experienced a substantial impact from the COVID-19 virus including elevated cancellations and softness in near-term demand. As of July 28, 2020, Lindblad segment bookings for travel in 2020 are now 62% below the same point a year ago for 2019 due primarily to the cancelled and rescheduled voyages, as well as cancellations for travel later this year. We have substantial advanced bookings for travel in 2021, including 6% more bookings as compared with bookings for 2020 as of the same date a year ago and 35% higher bookings as of the same date in 2018 for 2019. We continue to see new bookings for future travel including over $30.0 million since March 1, 2020, and we are receiving deposits and final payments for future travel.
For 2020 voyages that have been cancelled or rescheduled, we are providing future travel credits with incremental value or full refunds, as applicable, to our fully paid guests. As of July 28, 2020, the majority of guests have opted for future travel credits.
Balance Sheet and Liquidity
As of June 30, 2020, we had $80.9 million in unrestricted cash and $21.3 million in restricted cash primarily related to deposits on future travel originating from U.S. ports. During ~~February 2019,~~the first quarter of 2020 we ~~entered into an~~drew down $45.0 million under our revolving credit facility as a precautionary measure for working capital and general corporate purposes given the uncertainty related to the COVID-19 pandemic and borrowed $107.7 million under our first export credit agreement ~~to construct a second polar ice class vessel, a sister ship~~in conjunction with final payment on delivery of the National Geographic Endurance in March 2020. During April 2020, we drew down $30.6 million under our second export credit agreement in conjunction with the third installment payment on the National Geographic Resolution, ~~with a total purchase price~~scheduled for delivery in the fourth quarter of ~~1,291.0~~2021.
During May 2020, we amended our $2.5 million ~~Norwegian Kroner ("NOK"). In March 2019, we entered into a foreign exchange forward contract hedge~~promissory note, changing the maturity date of the principal payments to lock in a purchase price of approximately $153.5 million. The purchase price is subject to potential adjustments from contract specifications for variations in speed, deadweight, fuel consumption and delivery date. The purchase price isbe due in three equal installments, with the first ~~20% paid shortly after execution~~payment of due on December 22, 2020, the ~~agreement, 50% to be paid over the duration of the build~~second due on December 22, 2021 and the final ~~30%~~payment due ~~upon delivery~~on December 22, 2022.
The Company has also amended both its export credit agreements and ~~acceptance~~term loan and revolving credit facilities. During June 2020, the Company amended its export credit agreements to defer approximately $9.0 million in aggregate scheduled amortization payments from June 2020 through March 2021 and to suspend the total net leverage ratio covenant from June 2020 through June 2021. On August 7, 2020, the Company amended its term loan and revolving credit facilities to waive the application of the ~~vessel. The vessel is targeted~~total net leverage ratio covenant through June 2021. In connection with the amendment, the interest rate of the term loan has been increased by 125bps, to be ~~delivered in September 2021.~~paid-in-kind at maturity, a LIBOR floor of 75bps has been added to each facility and certain covenants have been amended to be more restrictive.

~~During~~ As of June 30, 2020, we had a total debt position of $412.3 million and were in compliance with all of our debt covenants currently in effect. We have no material debt maturities until 2023.
We estimate our monthly cash usage while our vessels are not in operations is approximately $10-15 million including ship and office operating expenses, necessary capital expenditures and interest and principal payments. This excludes guest payments for future travel and cash refunds requested on previously made guest payments.
We are currently evaluating several additional strategies to enhance our liquidity position. These strategies may include, but are not limited to, pursuing additional financing from both the public and private markets through the issuance of equity and/or debt. The timing and structure of any transaction, if completed, will depend on market conditions.
In April ~~2019,~~2020, we ~~entered into~~received a senior secured credit agreement (the “Second Export Credit Agreement”) with Citibank, N.A., London Branch (“Citi”) and Eksportkreditt Norge AS (“EK” and together with Citi, the “Lenders”). PursuantU.S. Small Business Administration Loan related to the ~~Second Export Credit Agreement,~~COVID-19 crisis in the ~~Lenders~~amount of $6.6 million. We subsequently returned the funds received from this loan and, as a result, have ~~agreed~~made additional adjustments to ~~make available~~our cost structure.
We have not previously experienced a complete cessation of our operations and, as a consequence, our ability to ~~us, at~~predict the impact of such cessation on our ~~option~~costs and ~~subject to certain conditions, a loan in an aggregate principal amount not to exceed $122.8 million~~future prospects is limited. Given the dynamic nature of this situation, we cannot reasonably estimate the impacts of the COVID-19 virus on our financial condition, results of operations, cash flows, plans and growth for the ~~purpose~~foreseeable future. It is unknown when travel restrictions and various border closures will be lifted and what the demand for expedition travel will be once these restrictions are no longer in place. The estimates for monthly cash usage reflect our current forecast for operating costs, capital expenditures and expected debt and interest payments. Based on current liquidity, the actions taken to date and our current forecast, which assumes reduced operations during 2020 with a ramp up in operations throughout 2021,we believe that our liquidity should be adequate to meet our obligations for the next 12 months from August 10, 2020, the date of ~~providing pre-~~this Quarterly Report on Form 10-Q.
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Return to Operations
We already have a robust set of operating protocols and, ~~post- delivery financing~~in preparation for upthe resumption of operations, have been proactively working in close cooperation with various medical policy experts and public health authorities to ~~80%~~further augment our procedures and protocols for health and safety onboard our vessels to mitigate the potential impacts of the ~~purchase price~~COVID-19 virus. These protocols encompass, but are not limited to, medical care, screening, testing, social distancing, personal protective equipment, and sanitization during all aspects of the expedition.
While it is uncertain when we will return to operations, we believe there are a variety of strategic advantages that should enable us to deploy our ships safely and quickly once travel restrictions have been lifted. The most notable is the size of our ~~new expedition ice-class cruise vessel targeted~~owned and operated vessels which range from 48 to 148 passengers, allowing for a highly controlled environment that includes stringent cleaning protocols. The small nature of our ships should also allow us to efficiently and effectively test our guests and crew prior to boarding. On average, we estimate it will only take a few thousand tests a month to ensure all guests and crew across our entire fleet have been tested. Additionally, the majority of our expeditions take place in remote locations where human interactions are limited, so there is less opportunity for external influence. We also have the ability to be ~~completed in September 2021. The Second Export Credit Agreement will bear an interest rate, at~~flexible with regards to existing itineraries and are actively investigating additional itinerary opportunities both internationally and domestically. Lastly, our ~~option,~~guests are explorers by nature, eager to travel and have historically been very resilient following periods of ~~either a fixed rate of 6.36% or a variable rate equal to three-month LIBOR plus a margin of 3.00% per annum.~~uncertainty.

The discussion and analysis of our results of operations and financial condition are organized as follows:

●
a description of certain line items and operational and financial metrics we utilize to assist us in managing our business;

●
results and a comparable discussion of our consolidated and segment results of operations for the three ~~and six~~ months ended June 30, ~~2019~~2020 and ~~2018;~~2019;

●
a discussion of our liquidity and capital resources, including future capital and contractual commitments and potential funding sources; and

●
a review of our critical accounting policies.

Financial Presentation

Description of Certain Line Items

Tour revenues

Tour revenues consist of the following:

●
Guest ticket revenues recognized from the sale of guest tickets; and
●
Other tour revenues from the sale of pre- or post-expedition excursions, hotel accommodations, air transportation to and from the ships, goods and services rendered onboard that are not included in guest ticket prices, trip insurance, and cancellation fees.
Cost of tours
Cost of tours includes the following:
●
Direct costs associated with revenues, including cost of pre- or post-expedition excursions, hotel accommodations, and land-based expeditions, air and other transportation expenses, and cost of goods and services rendered onboard;
●
Payroll costs and related expenses for shipboard and expedition personnel;
●
Food costs for guests and crew, including complimentary food and beverage amenities for guests;
●
Fuel costs and related costs of delivery, storage and safe disposal of waste; and

●
Other tour ~~revenues from the sale of pre- or post-expedition excursions, hotel accommodations, air transportation to~~expenses, such as land costs, port costs, repairs and ~~from the ships, goods and services rendered onboard that are not included in guest ticket prices, trip~~maintenance, equipment expense, drydock, ship insurance, and ~~cancellation fees.~~charter hire costs.

24
~~Cost~~

Table of ~~tours~~
~~Cost of tours includes the following:~~
●
Direct costs associated with revenues, including cost of pre- or post-expedition excursions, hotel accommodations, and land-based expeditions, air and other transportation expenses, and cost of goods and services rendered onboard;
●
~~Payroll costs and related expenses for shipboard and expedition personnel;~~
●
~~Food costs for guests and crew, including complimentary food and beverage amenities for guests;~~
●
~~Fuel costs and related costs of delivery, storage and safe disposal of waste; and~~
●
~~Other tour expenses, such as land costs, port costs, repairs and maintenance, equipment expense, drydock, ship insurance, and charter hire costs.~~
Contents

Selling and marketing

Selling and marketing expenses include commissions, royalties and a broad range of advertising and promotional expenses.

General and administrative

General and administrative expenses include the cost of shoreside vessel support, reservations and other administrative functions, including salaries and related benefits, credit card commissions, professional fees and rent.

Operational and Financial Metrics

We use a variety of operational and financial metrics, including non-GAAP financial measures, such as Adjusted EBITDA, Net Yields, Occupancy and Net Cruise Costs, to enable us to analyze our performance and financial condition. We utilize these financial measures to manage our business on a day-to-day basis and believe that they are the most relevant measures of performance. Some of these measures are commonly used in the cruise and tourism industry to evaluate performance. We believe these non-GAAP measures provide expanded insight to assess revenue and cost performance, in addition to the standard GAAP-based financial measures. There are no specific rules or regulations for determining non-GAAP measures, and as such, they may not be comparable to measures used by other companies within the industry.

The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. You should read this discussion and analysis of our financial condition and results of operations together with the condensed consolidated financial statements and the related notes thereto also included within.

Adjusted EBITDA is net income (loss) excluding depreciation and amortization, net interest expense, other income (expense), income tax (expense) benefit, (gain) loss on foreign currency, (gain) loss on transfer of assets, reorganization costs, and other supplemental adjustments. Other supplemental adjustments include certain non-operating items such as stock-based compensation, executive severance costs, the National Geographic fee amortization, debt refinancing costs, acquisition-related expenses and ~~certain~~ other ~~items.~~non-recurring charges. We believe Adjusted EBITDA, when considered along with other performance measures, is a useful measure as it reflects certain operating drivers of the business, such as sales growth, operating costs, selling and administrative expense, and other operating income and expense. We believe Adjusted EBITDA helps provide a more complete understanding of the underlying operating results and trends and an enhanced overall understanding of our financial performance and prospects for the future. Adjusted EBITDA is not intended to be a measure of liquidity or cash flows from operations or a measure comparable to net income as it does not take into account certain requirements, such as unearned passenger revenues, capital expenditures and related depreciation, principal and interest payments, and tax payments. Our use of Adjusted EBITDA may not be comparable to other companies within the industry.

The following metrics apply to our Lindblad segment:

Adjusted Net Cruise Cost represents Net Cruise Cost adjusted for Non-GAAP other supplemental adjustments which include certain non-operating items such as stock-based compensation, the National Geographic fee amortization, and ~~certain other items.~~acquisition-related expenses.

Available Guest Nights is a measurement of capacity and represents double occupancy per cabin (except single occupancy for a single capacity cabin) multiplied by the number of cruise days for the period. We also record the number of guest nights available on our limited land programs in this definition.

Gross Cruise Cost represents the sum of cost of tours plus, selling and marketing expenses, and general and administrative expenses.

Gross Yield represents tour revenues less insurance proceeds divided by Available Guest Nights.

Guest Nights Sold represents the number of guests carried for the period multiplied by the number of nights sailed within the period.

Maximum Guests is a measure of capacity and represents the maximum number of guests in a period and is based on double occupancy per cabin (except single occupancy for a single capacity cabin).

Net Cruise Cost represents Gross Cruise Cost excluding commissions and certain other direct costs of guest ticket revenues and other tour revenues.

Net Cruise Cost Excluding Fuel represents Net Cruise Cost excluding fuel costs.

Net Revenue represents tour revenues less insurance proceeds, commissions and direct costs of other tour revenues.

Net Yield represents Net Revenue divided by Available Guest Nights.

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Table of Contents
Number of Guests represents the number of guests that travel with us in a period.

Occupancy is calculated by dividing Guest Nights Sold by Available Guest Nights.

Voyages represent the number of ship expeditions completed during the period.

Foreign Currency Translation

The U.S. dollar is the functional currency in our foreign operations and re-measurement adjustments and gains or losses resulting from foreign currency transactions are recorded as foreign exchange gains or losses in the condensed consolidated statements of ~~income.~~operations.

Seasonality

~~Our~~Traditionally, our tour revenues from the sale of guest tickets are mildly seasonal, historically larger in the first and third quarters. The seasonality of our operating results fluctuates due to our vessels being taken out of service for scheduled maintenance or drydocking, which is typically during nonpeak demand periods, in the second and fourth quarters. Our drydock schedules are subject to cost and timing differences from year to year due to the availability of shipyards for certain work, drydock locations based on ship itineraries, operating conditions experienced especially in the polar regions and the applicable regulations of class societies in the maritime industry, which require more extensive reviews periodically. Drydocking impacts operating results by reducing tour revenues and increasing cost of tours. Natural Habitat is a seasonal business, with the majority of its tour revenue recorded in the third and fourth quarters from its summer season departures and polar bear tours.

Results of Operations - Consolidated

For the three months ended
June 30,

For the six months ended
June 30,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

2019

2018

Change

%

2019

2018

Change

%

2020

2019

Change

%

2020

2019

Change
%
Tour revenues
$ 76,658 $ 69,473 $ 7,185 10 % $ 166,311 $ 151,883 $ 14,428 9 % $ (268 ) $ 76,658 $ (76,926 ) NM $ 80,971 $ 166,311 $ (85,340 ) (51 %)

Cost of tours
37,520 33,810 3,710 11 % 76,537 69,681 6,856 10 % 12,721 37,520 (24,799 ) (66 )% 54,913 76,537 (21,624 ) (28 %)
General and administrative
16,268 15,879 389 2 % 32,350 30,929 1,421 5 % 9,798 16,268 (6,470 ) (40 )% 27,025 32,350 (5,325 ) (16 %)
Selling and marketing
12,567 10,583 1,984 19 % 26,569 22,656 3,913 17 % 3,406 12,567 (9,161 ) (73 )% 16,285 26,569 (10,284 ) (39 %)
Depreciation and amortization
6,182 4,994 1,188 24 % 12,370 10,038 2,332 23 % 8,553 6,182 2,371 38 % 15,243 12,370 2,873 23 %
Operating income
$ 4,121 $ 4,207 $ (86 ) (2 %) $ 18,485 $ 18,579 $ (94 ) (1 %)
Net income (loss)
$ 851 $ (159 ) $ 1,010 NM $ 15,930 $ 10,760 $ 5,170 48 %
Net income per share available to common stockholders

Operating (loss) income
$ (34,746 ) $ 4,121 $ (38,867 ) NM $ (32,495 ) $ 18,485 $ (50,980 ) NM
Net (loss) income
$ (39,923 ) $ 851 $ (40,774 ) NM $ (42,394 ) $ 15,930 $ (58,324 ) NM
Net (loss) income per share available to common stockholders

Basic
$ 0.02 $ - $ 0.02 $ 0.34 $ 0.24 $ 0.10 $ (0.80 ) $ 0.02 $ (0.82 ) $ (0.84 ) $ 0.34 $ (1.18 )
Diluted
$ 0.02 $ - $ 0.02 $ 0.32 $ 0.24 $ 0.08 $ (0.80 ) $ 0.02 $ (0.82 ) $ (0.84 ) $ 0.32 $ (1.16 )

Comparison of the Three and Six Months Ended June 30 ~~2019~~, 2020 to Three and Six Months Ended June 30 ~~2018~~, 2019 - Consolidated

Tour Revenues

Tour revenues for the three months ended June 30, ~~2019 increased $7.2~~2020 decreased $76.9 million, or ~~10%~~100%, to $76.7 million, compared to $69.5 million for the three months ended June 30, 2018. The Lindblad segment tour revenues increased by $5.4 million, primarily driven by an increase in Available Guest Nights during 2019,as a result of rescheduling all expeditions due to ~~the addition of the~~ ~~National Geographic Venture~~ to our fleet in the fourth quarter of 2018. At the Natural Habitat segment, tour revenues increased $1.8 million over the prior year period, primarily due to additional departures and increased pricing.COVID-19.

Tour revenues for the six months ended June 30, ~~2019 increased $14.4~~2020 decreased $85.3 million, or 9%51%, to ~~$166.3~~$81.0 million, compared to ~~$151.9~~$166.3 million for the six months ended June 30, ~~2018.~~2019. The Lindblad segment tour revenues ~~increased~~decreased by ~~$11.0~~$71.5 million, primarily ~~driven by an increase in Available Guest Nights during 2019, mainly~~as a result of cancelled, disrupted and rescheduled expeditions due to ~~the addition of the~~ ~~National Geographic Venture~~ ~~to our fleet in the fourth quarter of 2018.~~COVID-19. At the Natural Habitat segment, tour revenues ~~increased $3.5~~decreased $13.9 million over the prior year period, primarily related to cancelled, disrupted and rescheduled expeditions due to ~~additional departures and increased pricing.~~COVID-19.
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Table of Contents

Cost of Tours

Total cost of tours for the three months ended June 30, ~~2019 increased $3.7~~2020 decreased $24.8 million, or ~~11%~~66%, to ~~$37.5~~$12.7 million compared to ~~$33.8~~$37.5 million for the three months ended June 30, ~~2018.~~2019. At the Lindblad segment, cost of tours ~~increased $2.6~~decreased $17.9 million, primarily related to rescheduled expeditions due to ~~incremental~~COVID-19, partially offset by costs ~~related to~~incurred while ships are laid up and from the addition of the National Geographic ~~Venture~~Endurance~~, partially offset by lower drydock costs.~~ to our fleet in March 2020. At the Natural Habitat segment, cost of tours ~~increased $1.1~~decreased $6.9 million due to ~~additional departures.~~rescheduled trips directly related to COVID-19.

Total cost of tours for the six months ended June 30, ~~2019 increased $6.9~~2020 decreased $21.6 million, or ~~10%~~28%, to ~~$76.5~~$54.9 million, compared to ~~$69.7~~$76.5 million for the six months ended June 30, ~~2018.~~2019. At the Lindblad segment, cost of tours ~~increased $5.2~~decreased $13.7 million, primarily related to cancelled, disrupted and rescheduled expeditions due to ~~incremental~~COVID-19, partially offset by costs ~~related to~~incurred while ships are laid up, and from the addition of the National Geographic ~~Venture~~Endurance~~, partially offset by lower drydock.~~ to our fleet in March 2020. At the Natural Habitat segment, cost of tours ~~increased $1.6~~decreased $7.9 million, primarily due to ~~additional departures.~~cancelled, disrupted and rescheduled trips directly related to COVID-19.

General and Administrative

General and administrative expenses for the three months ended June 30, ~~2019 increased $0.4~~2020 decreased $6.5 million, or 2%40%, to ~~$16.3~~$9.8 million compared to ~~$15.9~~$16.3 million for the three months ended June 30, ~~2018.~~2019. At the Lindblad segment, general and administrative expenses decreased ~~$0.2~~$4.1 million over the prior year period ~~as lower value-added tax ("VAT") expense~~primarily due to reduced personnel costs and ~~stock-based compensation were partially offset by increased~~ credit card commissions ~~and personnel costs.~~related to the disruption of operations due to COVID-19. At the Natural Habitat segment, general and administrative expenses ~~increased $0.6~~decreased $2.4 million, primarily due to ~~an increase~~a decrease in personnel ~~costs.~~costs related to the disruption of operations due to COVID-19.

General and administrative expenses for the six months ended June 30, ~~2019 increased $1.4~~2020 decreased $5.3 million, or 5%16%, to ~~$32.3~~$27.0 million, compared to ~~$30.9~~$32.4 million for the six months ended June 30, ~~2018.~~2019. At the Lindblad segment, general and administrative expenses ~~were in line with a year ago as lower VAT expense and stock-based compensation, as well as the absence of deal financing costs incurred in 2018, was offset by increased~~decreased $3.1 million primarily due to reduced personnel costs and credit card ~~commissions.~~commissions related to the disruption of operations due to COVID-19. At the Natural Habitat segment, general and administrative expenses ~~increased $1.4~~decreased $2.2 million, primarily due to ~~an increase~~a decrease in personnel ~~costs.~~costs related to the disruption of operations due to COVID-19.

Selling and Marketing

Selling and marketing expenses for the three months ended June 30, ~~2019 increased $2.0~~2020 decreased $9.2 million, or ~~19%~~73%, to ~~$12.6~~$3.4 million compared to ~~$10.6~~$12.6 million for the three months ended June 30, ~~2018.~~2019. At the Lindblad segment, selling and marketing expenses ~~increased $1.6~~decreased $8.1 million, primarily due to ~~higher~~lower commission expenses related to the impact of COVID-19 on revenue and decreased advertising ~~spend and increased commission expenses.~~expenditures. At the Natural Habitat segment, selling and marketing expenses ~~increased $0.4~~decreased $1.0 million, primarily driven by ~~an increase~~a decrease in advertising expenditures.

Selling and marketing expenses for the six months ended June 30, ~~2019 increased $3.9~~2020 decreased $10.3 million, or ~~17%~~39%, to ~~$26.6~~$16.3 million, compared to ~~$22.7~~$26.6 million for the six months ended June 30, ~~2018.~~2019. At the Lindblad segment, selling and marketing expenses ~~increased $3.0~~decreased $8.8 million, primarily due to ~~higher~~lower commission expenses related to the impact of COVID-19 on revenue and decreased advertising ~~spend and increased commission expenses.~~expenditures. At the Natural Habitat segment, selling and marketing expenses ~~increased $0.9~~decreased $1.5 million, primarily driven by ~~an increase~~a decrease in advertising expenditures.

Depreciation and Amortization

Depreciation and amortization expenses for the three months ended June 30, ~~2019~~2020 increased ~~$1.2~~$2.4 million, or ~~24%~~38%, to ~~$6.2~~$8.6 million, compared to ~~$5.0~~$6.2 million for the three months ended June 30, ~~2018,~~2019, primarily due to the addition of the National Geographic ~~Venture~~Endurance to the ~~Lindblad segment~~fleet in ~~December 2018.~~March 2020.

Depreciation and amortization expenses for the six months ended June 30, ~~2019~~2020 increased ~~$2.3~~$2.9 million, or 23%, to ~~$12.4~~$15.2 million, compared to ~~$10.0~~$12.4 million for the six months ended June 30, ~~2018,~~2019, primarily due to the addition of the National Geographic ~~Venture~~Endurance to the ~~Lindblad segment~~fleet in ~~December 2018.~~March 2020.
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Table of Contents
Other Expense

Other expenses, for the three months ended June 30, ~~2019, decreased $1.4~~2020, increased $5.4 million to ~~$2.7~~$8.1 million from ~~$4.1~~$2.7 million for the three months ended June 30, ~~2018,~~2019, primarily due to the following:

●
A ~~$0.5~~$3.9 million ~~gain~~loss in foreign currency translation in ~~2019~~2020 due primarily to $5.3 million loss on the maturity of a foreign currency hedge related to the installment payment for the National Geographic Resolution, compared to a ~~loss of $1.1~~$0.5 million gain in ~~2018, due to the strengthening of the U.S dollar primarily in relation to the Canadian dollar, South African Rand and the Euro.~~2019.

●
A ~~$0.3~~$1.0 million increase in interest expense, net ~~of $3.2~~to $4.2 million in ~~2019,~~2020 primarily due to ~~fees~~increased borrowings related to our new builds, and ~~hedge expenses associated with our senior secured~~draw down under the revolving credit ~~agreement entered into in April of 2019.~~facility, partially offset by lower rates on the term loan facility.

Other expenses, for the six months ended June 30, ~~2019, decreased $2.2~~2020, increased $9.6 million to ~~$5.1~~$14.7 million from ~~$7.3~~$5.1 million for the six months ended June 30, ~~2018,~~2019, primarily due to the following:

●
A ~~$1.2~~$7.3 million ~~gain~~loss in foreign currency translation in ~~2019 compared~~2020 due primarily to a loss of ~~$1.6~~$5.3 million ~~in 2018, due~~on the maturity of a foreign currency hedge related to the ~~strengthening~~installment payment for the National Geographic Resolution, and a $2.0 million loss related to the weakening of the U.S dollar primarily in relation to the Canadian dollar, South African Rand and ~~the Euro.~~British Pound Sterling, compared to a $1.2 million gain in 2019.

●
A ~~$0.6~~$1.1 million increase in interest expense, net of ~~$6.2~~$7.2 million in ~~2019,~~2020, primarily due to ~~the~~ increased borrowings related to our new builds, and the ~~debt refinancing in 2018 and fees and hedge expenses associated with our senior secured~~draw down under the revolving credit ~~agreement entered into in April of 2019.~~facility, partially offset by lower rates on the term loan facility.
~~Income Taxes~~
During the three months ended June 30, 2019, the Company recognized an income tax expense of $0.6 million, compared to an expense of $0.2 million in the prior year. The increase is due to changes in certain itineraries and the improved operating performance of the Company.
During the six months ended June 30, 2019, the Company recognized an income tax benefit of $2.5 million, compared to an expense of $0.5 million in the prior year. The change is due to itinerary timing and the release of certain uncertain tax positions.

Results of Operations – Segments

Selected information for our segments is below.The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

For the three months ended
June 30,

For the six months ended
June 30,

(In thousands)

2019

2018

Change

%

2019

2018

Change

%

Tour revenues:

Lindblad
$ 64,930 $ 59,556 $ 5,374 9 % $ 140,968 $ 130,009 $ 10,959 8 %
Natural Habitat
11,728 9,917 1,811 18 % 25,343 21,874 3,469 16 %
Total tour revenues
$ 76,658 $ 69,473 $ 7,185 10 % $ 166,311 $ 151,883 $ 14,428 9 %
Operating Income:

Lindblad
$ 5,302 $ 5,107 $ 195 4 % $ 18,943 $ 18,547 $ 396 2 %
Natural Habitat
(1,181 ) (900 ) (281 ) (31% ) (458 ) 32 (490 ) NM
Total operating income
$ 4,121 $ 4,207 $ (86 ) (2% ) $ 18,485 $ 18,579 $ (94 ) (1% )
Adjusted EBITDA:

Lindblad
$ 13,270 $ 11,982 $ 1,288 11 % $ 34,200 $ 32,871 $ 1,329 4 %
Natural Habitat
(773 ) (532 ) (241 ) (45% ) 344 761 (417 ) (55% )
Total adjusted EBITDA
$ 12,497 $ 11,450 $ 1,047 9 % $ 34,544 $ 33,632 $ 912 3 %
~~Results of Operations – Lindblad Segment~~
~~The following table sets forth our Available Guest Nights, Guest Nights Sold, Occupancy, Maximum Guests, Number of Guests and Voyages:~~

For the three months ended
June 30,

For the six months ended
June 30,

(In thousands)

2019

2018

2019

2018

Available Guest Nights
53,983 50,917 112,652 104,834
Guest Nights Sold
48,216 45,786 101,829 94,721
Occupancy
89 % 90 % 90 % 90 %
Maximum Guests
6,829 6,242 14,142 13,047
Number of Guests
6,269 5,684 12,801 11,767
Voyages
87 81 180 176

The following table shows the calculations of Gross Yield and Net Yield. Gross Yield is calculated by dividing Tour Revenues by Available Guest Nights and Net Yield is calculated by dividing Net Revenue by Available Guest Nights:
Calculation of Gross Yield and Net Yield

For the three months ended
June 30,

For the six months ended
June 30,

(In thousands, except for Available Guest Nights, Gross and Net Yield)

2019

2018

2019

2018

Guest ticket revenues
$ 58,416 $ 53,832 $ 125,526 $ 116,512
Other tour revenue
6,514 5,724 15,442 13,497
Tour Revenues
64,930 59,556 140,968 130,009
Less: Commissions
(4,908 ) (4,369 ) (10,759 ) (9,923 )
Less: Other tour expenses
(4,418 ) (4,161 ) (10,104 ) (8,279 )
Net Revenue
$ 55,604 $ 51,026 $ 120,105 $ 111,807
Available Guest Nights
53,983 50,917 112,652 104,834
Gross Yield
$ 1,203 $ 1,170 $ 1,251 $ 1,240
Net Yield
1,030 1,002 1,066 1,067
~~The following table shows the calculations of Gross Cruise Cost per Available Guest Night and Net Cruise Costs per Available Guest Night:~~
Calculation of Gross Cruise Cost and Net Cruise Cost

For the three months ended
June 30,

For the six months ended
June 30,

(In thousands, except for Available Guest Nights, Gross and Net Cruise Cost per Avail. Guest Night)

2019

2018

2019

2018

Cost of tours
$ 30,118 $ 27,510 $ 61,439 $ 56,190
Plus: Selling and marketing
11,321 9,683 23,962 20,945
Plus: General and administrative
12,415 12,630 25,054 25,018
Gross Cruise Cost
53,854 49,823 110,455 102,153
Less: Commissions
(4,908 ) (4,369 ) (10,759 ) (9,923 )
Less: Other tour expenses
(4,418 ) (4,161 ) (10,104 ) (8,279 )
Net Cruise Cost
44,528 41,293 89,592 83,951
Less: Fuel Expense
(2,459 ) (2,599 ) (5,146 ) (4,709 )
Net Cruise Cost Excluding Fuel
42,069 38,694 84,446 79,242
Non-GAAP Adjustments:

Stock-based compensation
(1,001 ) (1,119 ) (1,754 ) (1,985 )
National Geographic fee amortization
(727 ) (727 ) (1,454 ) (1,454 )
Warrant exchange fees
(466 ) - (466 ) -
Executive severance costs
- (287 ) - (287 )
Reorganization costs
- (113 ) (15 ) (293 )
Debt refinancing costs
- (3 ) - (997 )
Adjusted Net Cruise Cost Excluding Fuel
$ 39,875 $ 36,445 $ 80,757 $ 74,226
Adjusted Net Cruise Cost
$ 42,334 $ 39,044 $ 85,903 $ 78,935
Available Guest Nights
53,983 50,917 112,652 104,834
Gross Cruise Cost per Available Guest Night
$ 998 $ 979 $ 980 $ 974
Net Cruise Cost per Available Guest Night
825 811 795 801
Net Cruise Cost Excluding Fuel per Available Guest Night
779 760 750 756
Adjusted Net Cruise Cost Excluding Fuel per Available Guest Night
739 716 717 708
Adjusted Net Cruise Cost per Available Guest Night
784 767 763 753

~~Comparison of Three and Six Months Ended June 30, 2019 to Three and Six Months Ended June 30, 2018 at the Lindblad Segment~~
~~Tour Revenues~~
Tour revenues for the three months ended June 30, 2019 increased $5.4 million, or 9%, to $64.9 million, compared to $59.6 million for the three months ended June 30, 2018. The increase was primarily driven by higher guest ticket revenue predominantly due to a 6% increase in Available Guest Nights from the addition of the ~~National Geographic Venture~~ to our fleet in the fourth quarter of 2018. Net Yield increased 3% for the three months ended June 30, 2019 to $1,030 compared to $1,002 for the three months ended June 30, 2018, due primarily to higher pricing and itinerary changes. Occupancy rates decreased slightly to 89% for the three months ended June 30, 2019, compared to 90% in the same period a year ago.
Tour revenues for the six months ended June 30, 2019 increased $11.0 million, or 9%, to $141.0 million, compared to $130.0 million for the six months ended June 30, 2018. The increase was primarily driven by higher guest ticket revenue predominantly due to a 7% increase in Available Guest Nights from the addition of the ~~National Geographic Venture~~ to our fleet in the fourth quarter of 2018. Net Yield of $1,066 for the six months ended June 30, 2019 was in line with Net Yield of $1,067 for the six months ended June 30, 2018. Occupancy of 90% for the six months ended June 30, 2019 was consistent with the same period a year ago.
~~Operating Income~~
Operating income increased $0.2 million to $5.3 million for the three months ended June 30, 2019, compared to $5.1 million for the three months ended June 30, 2018. The increase was primarily driven by the addition of the ~~National Geographic Venture~~~~, as well as lower drydock and VAT expense, partially offset by increased marketing spend, commission costs and personnel expenses~~.
Operating income increased $0.4 million to $18.9 million for the six months ended June 30, 2019, compared to $18.5 million for the six months ended June 30, 2018. The increase was primarily driven by the addition of the ~~National Geographic Venture~~~~, as well as lower drydock and VAT expense, the absence of debt financing costs incurred in 2018, partially offset by increased marketing spend, commission costs and personnel expenses~~.
~~Results of Operations – Natural Habitat Segment~~
~~Comparison of Three and Six Months Ended June 30, 2019 to Three and Six Months Ended June 30, 2018~~
~~Tour Revenues~~
Tour revenues for the three months ended June 30, 2019 increased $1.8 million, or 18%, to $11.7 million compared to $9.9 million for the three months ended June 30, 2018, due to additional departures as well as price increases.
Tour revenues for the six months ended June 30, 2019 increased $3.5 million, or 16%, to $25.3 million compared to $21.9 million for the six months ended June 30, 2018, due to additional departures as well as price increases.
~~Operating (loss) income~~
Operating loss for the three months ended June 30, 2019 increased $0.3 million to $1.2 million compared to $0.9 million for the three months ended June 30, 2018, as tour revenue growth was more than offset by higher operating costs related to additional departures, as well as increased personnel and marketing costs to support future growth initiatives.
We incurred an operating loss of $0.5 million for the six months ended June 30, 2019, a decreased of $0.5 million compared to the six months ended June 30, 2018, as tour revenue growth was more than offset by higher operating costs related to additional departures, as well as increased personnel and marketing costs to support future growth initiatives.

~~Adjusted EBITDA – Consolidated~~
~~The following table outlines the reconciliation to net income and calculation of consolidated Adjusted EBITDA.~~ The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

Consolidated

For the three months ended
June 30,

For the six months ended
June 30,

(In thousands)

2019

2018

2019

2018

Net income (loss)
$ 851 $ (159 ) $ 15,930 $ 10,760
Interest expense, net
3,188 2,870 6,176 5,604
Income tax expense (benefit)
553 227 (2,513 ) 503
Depreciation and amortization
6,182 4,994 12,370 10,038
(Gain) loss on foreign currency
(501 ) 1,141 (1,157 ) 1,592
Other expense, net
30 128 49 120
Stock-based compensation
1,001 1,119 1,754 1,985
National Geographic fee amortization
727 727 1,454 1,454
Warrant exchange fees
466 - 466 -
Executive severance costs
- 287 - 287
Reorganization costs
- 113 15 293
Debt refinancing costs
- 3 - 997
Adjusted EBITDA
$ 12,497 $ 11,450 $ 34,544 $ 33,632

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

2020

2019

Change

%

2020

2019

Change

%

Tour revenues:
Lindblad
$ (22 ) $ 64,930 $ (64,952 ) NM $ 69,517 $ 140,968 $ (71,451 ) (51 %)
Natural Habitat
(246 ) 11,728 (11,974 ) NM 11,454 25,343 (13,889 ) (55 %)
Total tour revenues
$ (268 ) $ 76,658 $ (76,926 ) NM $ 80,971 $ 166,311 $ (85,340 ) (51 %)
Operating (loss) income:

Lindblad
$ (31,641 ) $ 5,302 $ (36,943 ) NM $ (29,452 ) $ 18,943 $ (48,395 ) NM
Natural Habitat
(3,105 ) (1,181 ) (1,924 ) NM (3,043 ) (458 ) (2,585 ) NM
Total operating (loss) income
$ (34,746 ) $ 4,121 $ (38,867 ) NM $ (32,495 ) $ 18,485 $ (50,980 ) NM
Adjusted EBITDA:

Lindblad
$ (22,986 ) $ 13,270 $ (36,256 ) NM $ (12,911 ) $ 34,200 $ (47,111 ) NM
Natural Habitat
(2,491 ) (773 ) (1,718 ) NM (1,988 ) 344 (2,332 ) NM
Total adjusted EBITDA
$ (25,477 ) $ 12,497 $ (37,974 ) NM $ (14,899 ) $ 34,544 $ (49,443 ) NM
Results of Operations – Lindblad Segment
The following table sets forth our Available Guest Nights, Guest Nights Sold, Occupancy, Maximum Guests, Number of Guests and Voyages for the three and six months ended June 30, 2020 and 2019:

For the three months ended June 30,

For the six months ended June 30,

2020

2019

2020

2019

Available Guest Nights
- 53,983 51,624 112,652
Guest Nights Sold
- 48,216 46,050 101,829
Occupancy
- 89 % 89 % 90 %
Maximum Guests
- 6,829 6,512 14,142
Number of Guests
- 6,269 5,564 12,801
Voyages
- 87 85 180
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The following table shows the calculations of Gross Yield and Net Yield for the three and six months ended June 30, 2020 and 2019. Gross Yield is calculated by dividing Tour Revenues by Available Guest Nights and Net Yield is calculated by dividing Net Revenue by Available Guest Nights:

For the three months ended June 30,

For the six months ended June 30,

(In thousands, except for Available Guest Nights, Gross and Net Yield)

2020

2019

2020

2019

Guest ticket revenues
$ (11 ) $ 58,416 $ 60,351 $ 125,526
Other tour revenue
(11 ) 6,514 9,166 15,442
Tour Revenues
(22 ) 64,930 69,517 140,968
Less: Commissions
(1,835 ) (4,908 ) (7,262 ) (10,759 )
Less: Other tour expenses
(953 ) (4,418 ) (6,713 ) (10,104 )
Net Revenue
$ (2,810 ) $ 55,604 $ 55,542 $ 120,105
Available Guest Nights
- 53,983 51,624 112,652
Gross Yield

NM
$ 1,203 $ 1,347 $ 1,251
Net Yield

NM
1,030 1,076 1,066
The following table shows the calculations of Gross Cruise Cost per Available Guest Night and Net Cruise Costs per Available Guest Night for the three and six months ended June 30, 2020 and 2019:
Calculation of Gross Cruise Cost and Net Cruise Cost

For the three months ended June 30,

For the six months ended June 30,

(In thousands, except for Available Guest Nights, Gross and Net Cruise Cost per Avail. Guest Night)

2020

2019

2020

2019

Cost of tours
$ 12,182 $ 30,118 $ 47,702 $ 61,439
Plus: Selling and marketing
3,201 11,321 15,184 23,962
Plus: General and administrative
8,297 12,415 21,895 25,054
Gross Cruise Cost
23,680 53,854 84,781 110,455
Less: Commissions
(1,835 ) (4,908 ) (7,262 ) (10,759 )
Less: Other tour expenses
(953 ) (4,418 ) (6,713 ) (10,104 )
Net Cruise Cost
20,892 44,528 70,806 89,592
Less: Fuel Expense
(931 ) (2,459 ) (3,323 ) (5,146 )
Net Cruise Cost Excluding Fuel
19,961 42,069 67,483 84,446
Non-GAAP Adjustments:

Stock-based compensation
(703 ) (1,001 ) (1,601 ) (1,754 )
National Geographic fee amortization
- (727 ) (727 ) (1,454 )
Warrant exchange and debt refinancing costs - (466 ) - (466 )
Other
(13 ) - (25 ) (15 )
Adjusted Net Cruise Cost Excluding Fuel
$ 19,245 $ 39,875 $ 65,130 $ 80,757
Adjusted Net Cruise Cost
$ 20,176 $ 42,334 $ 68,453 $ 85,903
Available Guest Nights
- 53,983 51,624 112,652
Gross Cruise Cost per Available Guest Night

NM
$ 998 $ 1,642 $ 980
Net Cruise Cost per Available Guest Night

NM
825 1,372 795
Net Cruise Cost Excluding Fuel per Available Guest Night

NM
779 1,307 750
Adjusted Net Cruise Cost Excluding Fuel per Available Guest Night

NM
739 1,262 717
Adjusted Net Cruise Cost per Available Guest Night

NM
784 1,326 763
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Table of Contents
Comparison of Three and Six Months Ended June 30, 2020 to Three and Six Months Ended June 30, 2019
Tour Revenues
Tour revenues for the three months ended June 30, 2020 decreased $64.9 million, or 100%, to $0.0 million compared to $64.9 million for the three months ended June 30, 2019. The decrease was a result of rescheduling all expeditions due to COVID-19.
Tour revenues for the six months ended June 30, 2020 decreased $71.5 million, or 51%, to $69.5 million, compared to $141.0 million for the six months ended June 30, 2019. The decrease was primarily driven by cancelled, disrupted and rescheduled expeditions due to COVID-19.
Operating Income
Operating income decreased $36.9 million to a loss of $31.6 million for the three months ended June 30, 2020 compared to $5.3 million operating income for the three months ended June 30, 2019. The decrease was primarily a result of rescheduling all expeditions due to COVID-19.
Operating income decreased $48.4 million to a loss of $29.5 million for the six months ended June 30, 2020, compared to operating income of $18.9 million for the six months ended June 30, 2019. The decrease was primarily driven by lower revenue from cancelled, disrupted and rescheduled voyages due to COVID-19 and costs associated with adding the National Geographic Endurance to the fleet in March 2020.
Results of Operations – Natural Habitat Segment
Comparison of Three and Six Months Ended June 30, 2020 to Three and Six Months Ended June 30, 2019
Tour Revenues
Tour revenues for the three months ended June 30, 2020 decreased $12.0 million, compared to $11.7 million for the three months ended June 30, 2019, as a result of rescheduled expeditions due to COVID-19.
Tour revenues for the six months ended June 30, 2020 decreased $13.9 million, or 55%, to $11.5 million compared to $25.3 million for the six months ended June 30, 2019, due primarily to cancelled, disrupted and rescheduled expeditions due to COVID-19.
Operating Income
Operating income for the three months ended June 30, 2020 decreased $1.9 million to a loss of $3.1 million compared to a $1.2 million loss for the three months ended June 30, 2019. The decrease was primarily a result of rescheduled expeditions due to COVID-19.
Operating income for the six months ended June 30, 2020 decreased $2.6 million to a loss of $3.0 million compared to a $0.4 million loss for the six months ended June 30, 2019. The decrease was primarily a result of cancelled, disrupted and rescheduled expeditions due to COVID-19.
Adjusted EBITDA
The following table outlines the reconciliation to net income and calculation of consolidated Adjusted EBITDA for the three and six months ended June 30, 2020 and 2019. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
Consolidated

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

2020

2019

2020

2019

Net (loss) income
$ (39,923 ) $ 851 $ (42,394 ) $ 15,930
Interest expense, net
4,179 3,188 7,234 6,176
Income tax (benefit) expense
(2,943 ) 553 (4,770 ) (2,513 )
Depreciation and amortization
8,553 6,182 15,243 12,370
Loss (gain) on foreign currency
3,879 (501 ) 7,322 (1,157 )
Other expense
62 30 113 49
Stock-based compensation
703 1,001 1,601 1,754
National Geographic fee amortization
- 727 727 1,454
Warrant exchange and debt refinancing costs - 466 - 466
Other
13 - 25 15
Adjusted EBITDA
$ (25,477 ) $ 12,497 $ (14,899 ) $ 34,544
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The following tables outline the reconciliation for each segment from operating income to Adjusted ~~EBITDA.~~EBITDA for the three and six months ended June 30, 2020 and 2019.

Lindblad Segment

For the three months ended
June 30,

For the six months ended
June 30,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

2019

2018

2019

2018

2020

2019

2020

2019

Operating income
$ 5,302 $ 5,107 $ 18,943 $ 18,547
Operating (loss) income
$ (31,641 ) $ 5,302 $ (29,452 ) $ 18,943
Depreciation and amortization
5,774 4,626 11,568 9,309 7,939 5,774 14,188 11,568
Stock-based compensation
1,001 1,119 1,754 1,985 703 1,001 1,601 1,754
National Geographic fee amortization
727 727 1,454 1,454 - 727 727 1,454
Warrant exchange fees
466 - 466 -
Executive severance costs
- 287 - 287
Reorganization costs
- 113 15 293
Debt refinancing costs
- 3 - 997
Warrant exchange and debt refinancing costs - 466 - 466
Other
13 - 25 15
Adjusted EBITDA
$ 13,270 $ 11,982 $ 34,200 $ 32,871 $ (22,986 ) $ 13,270 $ (12,911 ) $ 34,200

Natural Habitat Segment

For the three months ended
June 30,

For the six months ended
June 30,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

2019

2018

2019

2018

2020

2019

2020

2019

Operating (loss) income
$ (1,181 ) $ (900 ) $ (458 ) $ 32
Operating loss
$ (3,105 ) $ (1,181 ) $ (3,043 ) $ (458 )
Depreciation and amortization
408 368 802 729 614 408 1,055 802
Adjusted EBITDA
$ (773 ) $ (532 ) $ 344 $ 761 $ (2,491 ) $ (773 ) $ (1,988 ) $ 344

Liquidity and Capital Resources
Due to the spread of the COVID-19 virus and the effects of travel restrictions around the world, we suspended or rescheduled the majority of expeditions and fleet operations departing March 16, 2020 through September 30, 2020 and have been working with guests to reschedule travel plans and refund payments, as applicable. The COVID-19 pandemic has already had a material negative impact on our operations and financial results and we expect the evolving pandemic to have ongoing material negative effects on operations, financial results and liquidity. Given the dynamic nature of this situation, we cannot reasonably estimate the impacts of the COVID-19 virus on our financial condition, results of operations, cash flows, plans and growth for the foreseeable future. It is unknown when travel restrictions and various border closures will be lifted and what the demand for expedition travel will be once these restrictions are no longer in place.
As of June 30, 2020, we had approximately $412.3 million in long-term debt obligations, including the current portion of long-term debt. We estimate that our monthly cash usage while our vessels are not in operations is approximately $10-15 million, excluding guest payments for future travel and cash refunds requested on previously made guest payments. To date, the majority of guests on rescheduled voyages have requested future travel credits. Additionally, we continue to see deposits for future travel. We believe that our cash on hand, our Second Export Credit Agreement and expected future operating cash inflows will be sufficient to fund operations, debt service requirements, and necessary capital expenditures. However, there can be no assurance that we will commence operating in the near term or if we do commence operations, that the level of initial demand will generate cash flows from operations will be available to fund future obligations. We are currently evaluating several additional strategies to enhance our liquidity position. These strategies may include, but are not limited to, pursuing additional financing from both the public and private markets through the issuance of equity and/or debt. The timing and structure of any transaction, if completed, will depend on market conditions. There can be no assurance that debt or equity financing will be available to us on favorable terms or at all.

Sources and Uses of Cash for the Six Months Ended June 30, 2020 and 2019 ~~and 2018~~

Net cash ~~provided~~used by operating activities was $36.8 million in 2020 compared to $37.2 million provided by operations in 2019, ~~compared to $24.8 million in 2018. The $12.4 million increase was~~ primarily due to ~~improved operating results and higher bookings for future travel.~~the rescheduling of expeditions due to COVID-19 pandemic.

Net cash used in investing activities was $152.0 million in 2020 compared to $42.3 million in ~~2019 compared to $31.5 million in 2018.~~2019. The ~~$10.8~~$109.7 million increase was primarily due to ~~an increase~~the final payment for the completion of the National Geographic Endurance, and a $30.6 million contracted installment payment for the National Geographic Resolution during the current year, partially offset by the $30.2 million initial down-payment for the National Geographic Resolution in ~~purchases~~the first quarter of ~~property~~2019 and ~~equipment primarily related to the spend on two new polar ice-class vessels in 2019.~~other capital expenditures.
Net cash ~~used~~provided by financing activities was ~~$5.0~~$181.8 million in ~~2019~~2020 compared to net cash ~~provided by~~used in financing activities of ~~$17.6~~$5.0 million in ~~2018.~~2019. The ~~$22.6~~$186.8 million ~~decrease~~increase in cash provided was primarily due to borrowing $107.7 million under the ~~2018 refinancing~~first senior secured credit agreement for the final contracted payment of the National Geographic Endurance, borrowing $30.6 million under the second senior secured credit agreement for contracted installment payment on the National Geographic Resolution, and a $45.0 million drawdown of our revolving credit ~~facility, which was partially offset by the $170.6 million repayment of the previous senior debt, lower deferred financing costs and fewer stock and warrant repurchases.~~facility.

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Table of Contents

Funding Sources

Debt Facilities

Revolving Credit Facility

Our Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”), provides a $200.0 million senior secured first lien term loan facility (the “Term Facility”), maturing March 2025, and a $45.0 million senior secured incremental revolving credit facility (the “Revolving Facility”), which includes a $5.0 million letter of credit sub-facility. During March 2020, we drew $45.0 million on our Revolving Facility, maturing March 2023. The Term Facility bears interest at an adjusted Intercontinental Exchange (“ICE”) Benchmark administration LIBOR plus a spread of 3.25%, ~~which stepped down from~~or 3.41% as of June 30, 2020, and the Revolving Facility bears interest at ICE LIBOR plus a spread of ~~3.50% after the second quarter 2019 due to an upgrade~~3.00%, or 3.16% as of ~~our debt rating.~~June 30, 2020. In 2018, we entered into interest rate cap agreements to hedge our exposure to interest rate movements and manage our interest rate expense related to the Term Facility.

Senior Secured Credit Agreements

Our senior secured credit agreement (the “Export Credit Agreement”) ~~makes~~made available a loan in an aggregate principal amount not to exceed $107.7 million for the purpose of providing financing for up to 80% of the purchase price of our new polar ice class vessel, the National Geographic Endurance~~, targeted to be completed in January 2020. If drawn upon, the loan will be made at the time of delivery~~. During March 2020, we took possession of the ~~vessel.~~National Geographic Endurance and borrowed the $107.7 million under the Export Credit Agreement for the final payment. The Export Credit Agreement ~~at our election, will bear~~bears interest ~~either~~ at ~~a fixed interest rate effectively equal to 5.78% or~~ a floating interest rate equal to three-month LIBOR plus a margin of 3.00% per ~~annum.~~ annum, or 3.31% for the period covered as of June 30, 2020.

~~On April 8, 2019, we entered into a~~Our senior secured credit agreement (the “Second Export Credit Agreement”) with Citibank, N.A., London Branch (“Citi”) and Eksportkreditt Norge AS (“EK” and together with Citi, the “Lenders”). Pursuant to the Second Export Credit Agreement, the Lenders have agreed to makemakes available to us ~~at our option and subject to certain conditions,~~ a loan in an aggregate principal amount not to exceed $122.8 million for the purpose of providing pre- and post- delivery financing for up to 80% of the purchase price of ~~our~~Company’s new expedition ice-class ~~cruise~~ vessel, ~~targeted~~the National Geographic Resolution, scheduled to be ~~completed~~delivered in ~~September~~the fourth quarter of 2021. The Second Export Credit Agreement bears a variable interest rate equal to three-month LIBOR plus a margin of 3.00% per annum, or 3.31% for the period covered as of June 30, 2020. After completion of the vessel, the Second Export Credit Agreement, at our option, will bear an interest rate ~~at our option,~~ of either a fixed rate of 6.36% or a variable rate equal to three-month LIBOR plus a margin of 3.00% per annum. In September 2019 and April 2020, we drew approximately $30.5 million and $30.6 million, respectively, under the Second Export Credit Agreement for the second and third contracted payments, respectively, on the National Geographic Resolution.
The Company has also amended both its export credit agreements and term loan and revolving credit facilities. During June 2020, the Company amended its export credit agreements to defer approximately $9.0 million in aggregate scheduled amortization payments from June 2020 through March 2021 and to suspend the total net leverage ratio covenant from June 2020 through June 2021. On August 7, 2020, the Company amended its term loan and revolving credit facilities to waive the application of the total net leverage ratio covenant through June 2021. In connection with the amendment, the interest rate of the term loan has been increased by 125bps, to be paid-in-kind at maturity, a LIBOR floor of 75bps has been added to each facility and certain covenants have been amended to be more restrictive.

The Amended Credit Agreement, the Export Credit Agreement and the Second Export Credit Agreement contain financial and restrictive covenants. As of June 30, ~~2019,~~2020, we were in compliance with our covenants.
Funding Needs

We generally rely on a combination of cash flows provided by operations and the incurrence of additional debt to fund obligations. A vast majority of guest ticket receipts are collected in advance of the applicable expedition date. These advance passenger receipts remain a current liability until the expedition date and the cash generated from these advance receipts is used interchangeably with cash on hand from other cash from operations. The cash received as advanced receipts can be used to fund operating expenses for the applicable future expeditions or otherwise, pay down credit facilities, make long-term investments or any other use of cash. As of June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, we had a working capital deficit of ~~$29.1~~$36.7 million and ~~$9.3~~$36.3 million, respectively. As of June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, we had ~~$78.7~~$80.9 million and ~~$113.4~~$101.6 million, respectively, in cash and cash equivalents, excluding restricted cash.

Our Board of Directors approved a stock and warrant repurchase plan (“Repurchase Plan”) in November 2015 and increased the repurchase plan to $35.0 million in November 2016. The Repurchase Plan authorizes us to purchase from time to time our outstanding common stock and warrants. Any shares and warrants purchased will be retired. The Repurchase Plan has no time deadline and will continue until otherwise modified or terminated at the sole discretion of our Board of Directors. These repurchases exclude shares repurchased to settle statutory employee tax withholding related to the exercise of stock options and vesting of stock awards. All repurchases were made using cash resources. During the ~~six~~three months ended June 30, ~~2019,~~2020, we repurchased ~~1,895~~8,517 shares of common stock for approximately ~~$23,000.~~$127,000. We have cumulatively repurchased ~~866,701~~875,218 shares of common stock for ~~$8.2~~$8.3 million and 6,011,926 warrants for $14.7 million, since plan inception. The balance for the Repurchase Plan was ~~$12.1~~$12.0 million as of June 30, ~~2019.~~2020. During March 2020, the Repurchase Plan was suspended due to the uncertain impact of the COVID-19 virus.

~~In 2017, we executed a contract with Ulstein Verft to build a polar ice class vessel, the~~ ~~National Geographic Endurance,~~ ~~targeted to be competed in January 2020, with a total purchase price~~
32
Table of 1,066.0 million Norwegian Kroner. Subsequently, we exercised our right to make payments in United States Dollars, which resulted in a purchase price of $134.6 million, including hedging costs. The first twenty percent of the purchase price was paid shortly after execution of the contract with the remaining eighty percent due upon delivery and acceptance of the vessel. The remaining purchase price of the ship will be funded through a combination of cash available on our balance sheet, our Export Credit Agreement, our revolving credit facility and excess cash flows generated by our existing operations.
Contents

In February 2019, we entered into an agreement with Ulstein Verft to construct a ~~second~~ polar ice-class vessel, ~~a sister ship of~~ the National Geographic ~~Endurance~~Resolution, with a total purchase price of 1,291.0 million Norwegian Kroner (NOK). ~~During~~In March 2019, we entered into foreign exchange forward contract hedges to lock in a purchase price of $153.5 million, including hedging costs. The purchase price is subject to potential adjustments from contract specifications for variations in speed, deadweight, fuel consumption and delivery date. The purchase price is due in installments, with ~~the first~~ 20% paid shortly after execution of the agreement, ~~50% to be paid over the duration of the build~~20% in September 2019, 20% in April 2020, 10% due in April 2021 and the final 30% due upon delivery and acceptance of the vessel. The vessel is ~~targeted~~scheduled to be delivered in the fourth quarter of 2021. In September ~~2021. On~~2019 and April ~~8, 2019,~~2020, we ~~entered into~~drew approximately $30.5 million and $30.6 million, respectively, under the Second Export Credit Agreement for the contracted installment payments. The remaining purchase price of the vessel is expected to be funded through a combination of cash available on our balance sheet, our Second Export Credit Agreement and excess cash flows generated by our existing operations.
During March 2020, we borrowed the $107.7 million under the Export Credit Agreement for the final contracted payment of the National Geographic Endurance and drew $45.0 million on our Revolver Facility. During April 2020, we drew $30.6 million under the Second Export Credit Agreement for a contracted installment payment on the National Geographic Resolution. During May 2020, we amended the maturity dates of the note payable and during June 2020, we amended the senior secured credit ~~agreement (the “Second Export Credit Agreement”) to make available to us, at our option~~agreements. The additional borrowings and subject to certain conditions, a loan in an aggregate principal amount not to exceed $122.8 million for the purpose of providing pre- and post- delivery financing for up to 80% of the purchase price of our second new polar ice-class vessel.
~~The 2019 agreement to construct the polar ice class vessel~~amendments created a material ~~change~~changes in our future obligations from those reported in our ~~2018~~2019 Annual Report. The additional or amended related obligations as of June 30, ~~2019~~2020 are as follows:

(In thousands)

Total

Current

1-2 years

New polar ice class vessel
$ 123,303 $ 61,097 $ 62,206
As of June 30, 2019, we had approximately $200.5 million in long-term debt obligations, including the current portion of long-term debt. We believe that our cash on hand, our revolving credit facility, our senior secured credit agreements and expected future operating cash inflows will be sufficient to fund operations, debt service requirements, capital expenditures for our newbuilds and other assets, acquisitions, and our Repurchase Plan. However, there can be no assurance that cash flows from operations will be available in the future to fund future obligations.
(In thousands)

Total

Current

1-2 years

3-4 years

Thereafter

Export Credit Agreement

$
107,695

$
2,805

$
22,436

$
41,620

$
40,834

Second Export Credit Agreement

30,644

-

-
-
30,644

Revolver

45,000

-

45,000

-

-

Note Payable

2,525

842

1,683

-

-

Off-Balance Sheet Arrangements

WeIn 2019, we entered into ~~an Export Credit Agreement and~~ a Second Export Credit Agreement as described above.

Critical Accounting Policies

For a detailed discussion of the Critical Accounting Policies, please see our ~~2018~~2019 Annual Report.

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Table of Contents

Item 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our exposure to market risks from the information set forth in the “Quantitative and Qualitative Disclosures About Market Risk” sections contained in our ~~2018~~2019 Annual Report, with the exception of foreign currency denominated agreement for the construction of our polar ice class vessel and the foreign exchange forward contracts that we entered into and designated as a cash flow hedge for the purchase of the contracted polar ice class vessel targeted to be delivered in September 2021.Report.

We are exposed to a market risk for interest rates related to our variable rate debt. We assess our market risks based on changes in interest rates utilizing a sensitivity analysis that measures the potential impact on earnings and cash flows based on a hypothetical 1.0% change ~~(increase and decrease)~~ in interest rates. For additional information regarding our long-term borrowings see Note 5 to our Condensed Consolidated Financial Statements. As of June 30, ~~2019,~~2020, we had interest rate cap agreements to hedge a portion of our exposure to interest rate movements of our variable rate debt and to manage our interest expense. The notional amount of outstanding debt associated with interest rate cap agreements as of June 30, ~~2019~~2020 was $100.0 million. Based on our June 30, ~~2019~~2020 outstanding variable rate debt balance, a hypothetical 1.0% change in the six-month LIBOR interest rates would impact our annual interest expense by approximately $1.0 million.

As of June 30, 2020, we had foreign currency forward contracts to hedge our exposure to foreign currency exchange rate risk related to our ship construction contracts denominated in NOK. For the six months ended June 30, 2020, we recorded a loss of approximately $3.9 million in other comprehensive income related to these foreign exchange derivatives. The strengthening of the NOK at June 30, 2020 by a hypothetical 10%, would result in an approximately $6.0 million gain being recorded in other comprehensive income. The weakening of the NOK at June 30, 2020 by a hypothetical 10%, would result in an approximately $4.9 million loss being recorded in other comprehensive income.
Item 4.
Controls and Procedures
~~Controls and Procedures~~

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the quarter ended June 30, ~~2019,~~2020, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that ~~as of June 30, 2019,~~during the period covered by this report, our disclosure controls and procedures were effective.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarter covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


Part 2.II.
OTHER INFORMATION
~~OTHER INFORMATION~~

Item 1.
LEGAL PROCEEDINGS
~~LEGAL PROCEEDINGS~~

The Company is involved in various claims, legal actions and regulatory proceedings arising from time to time in the ordinary course of business. We have protection and indemnity insurance that would be expected to cover any damages.

ITEM 1A.
RISK FACTORS
~~RISK FACTORS~~

We operate in a rapidly changing environment that involves a number of risks that could materially affect our business, financial condition or future results, some of which are beyond our control. The risks and uncertainties that we believe are most important for you to consider are discussed under the heading “Risk Factors” in ~~the 2018~~our 2019 Annual Report filed on February ~~28, 2019.~~26, 2020, and those discussed in Item 1A. Risk Factors in our Quarterly Report on Form 10-Q for the period ended March 31, 2020, as filed on May 6, 2020.

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Item 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sales by the Company of Unregistered Securities

There were no unregistered sales of equity securities during the quarter ended June 30, ~~2019.~~2020.

Repurchases of Securities

The Company’s Board of Directors approved a stock and warrant repurchase plan (“Repurchase Plan”) in November 2015 and increased the repurchase plan to $35.0 million in November 2016. The Repurchase Plan authorizes the Company to purchase from time to time the Company’s outstanding common stock and warrants. Any shares and warrants purchased will be retired. The Repurchase Plan has no time deadline and will continue until otherwise modified or terminated at the sole discretion of the Company’s Board of Directors. During the ~~six~~three months ended ~~June 30, 2019, no shares were repurchased. We have cumulatively~~March 31, 2020, we repurchased ~~866,701~~8,517 shares of common stock for ~~$8.2~~approximately $127,000. We have cumulatively repurchased 875,218 shares of common stock for $8.3 million and 6,011,926 warrants for $14.7 million, since plan inception. The remaining balance for the Repurchase Plan was ~~$12.1~~$12.0 million as of June 30, ~~2019.~~2020. In March 2020, the Repurchase Plan was suspended due to the uncertain impact of the COVID-19 virus.

No shares were repurchased under the Repurchase Plan during the three months ended June 30, 2020. The following table represents information with respect to shares of common stock repurchased under the Repurchase Plan as well as shares withheld from vesting of stock-based compensation awards for employee income taxes, for the periods indicated:

Period

Total number of shares purchased

Average price paid per share

Dollar value of shares purchased as part of publicly announced plans or programs

Maximum dollar value of warrants and shares that may be purchased under approved plans or programs

April 1 through April 30, 2019 ^(a)
18,348 $ 15.58 $ - $ 12,102,046
May 1 through May 31, 2019 ^(a)
11,975 16.51 - 12,102,046
June 1 through June 30, 2019 ^(b)
15,079 16.84 - 12,102,046
Total
45,402 $ -
~~__________~~
Period

Total number of shares purchased

Average price paid per share

Dollar value of shares purchased as part of publicly announced plans or programs

Maximum dollar value of warrants and shares that may be purchased under approved plans or programs

April 1 through April 30, 2020 ^(a)
39,269 $ 3.80 $ - $ 11,974,787
May 1 through May 31, 2020 ^(a)
8,600 7.75 - 11,974,787
June 1 through June 30, 2020 ^(a)
93 10.23 - 11,974,787
Total
47,962 $ -

^(a)
~~Amount relates to shares withheld from vesting’s of stock-based compensation awards for employee income tax withholding.~~
^(b)
Amount relates to shares withheld from vesting's of stock-based compensation awards for employee income tax ~~withholding and exercise of options.~~withholding.

Item 3.
DEFAULTS UPON SENIOR SECURITIES

Not applicable.

Item 4.
MINE SAFETY DISCLOSURES
~~MINE SAFETY DISCLOSURES~~

Not applicable.

Item 5.
Other information
~~Other information~~

~~Not applicable~~
On August 7, 2020, the Company amended its term loan and revolving credit facilities to waive the application of the total net leverage ratio covenant through June 2021. In connection with the amendment, the interest rate of the term loan has been increased by 125bps, to be paid-in-kind at maturity, a LIBOR floor of 75bps has been added to each facility and certain covenants have been amended to be more restrictive.

35
Table of Contents

Item 6.
exhibits
~~exhibits~~
Number

Description

Included

Form

Filing Date
~~4.4~~10.1 Amendment No 2 to ~~Warrant~~the Senior Secured Credit Agreement dated January 8, 2018 among the Company and LEX Endurance Ltd. with Citibank, N.A. and Eksportkreditt Norge AS.. ~~By Reference~~Incorporated by reference 8-K ~~July 17,~~June 15, 2020
10.2 Amendment No 1 to the Senior Secured Credit Agreement dated April 8, 2019 among the Company and Bluewater II Limited with Citibank, N.A. and Eksportkreditt Norge AS. Incorporated by reference 8-K June 15, 2020
10.3 ~~Dealer Manager~~Amendment No. 1 to the Third Amended and ~~Solicitation Agent~~Restated Credit Agreement ~~between Citigroup Global Markets, Inc.~~dated March 27, 2018, among Lindblad Expeditions, LLC and Lindblad ~~Expeditions Holdings, Inc~~Maritime Enterprises, Ltd. as borrowers, the Company, the lenders party thereto, and Credit Suisse AG, as Administrative Agent and Collateral Agent, and Credit Suisse Securities (USA) LLC, JPMorgan Chase Bank, N.A. and Citibank, N.A. as Joint Bookrunners, Joint Lead Arrangers and Syndication Agents.. ~~By Reference~~Herewith ~~S-4~~ ~~June 14, 2019~~
31.1

Certification of Chief Executive Officer of Lindblad Expeditions Holdings, Inc. pursuant to Rule 13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

Herewith

31.2

Certification of Chief Financial Officer of Lindblad Expeditions Holdings, Inc. pursuant to Rule 13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

Herewith

32.1

Certification of Chief Executive Officer of Lindblad Expeditions Holdings, Inc. pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Herewith

32.2

Certification of Chief Financial Officer of Lindblad Expeditions Holdings, Inc. pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Herewith

101.INS
Inline XBRL Instance Document
(the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
Herewith
101.SCH
Inline XBRL Taxonomy extension schema document
Herewith
101.CAL

Inline XBRL Taxonomy extension calculation link base document

Herewith

101.DEF
Inline XBRL Taxonomy Extension Definition Link base
Herewith
101.LAB

Inline XBRL Taxonomy extension label link base document

Herewith

101.PRE

Inline XBRL Taxonomy extension presentation link base document

Herewith

~~101.DEF~~
104
Cover Page Interactive Data File (formatted as Inline XBRL ~~Taxonomy Extension Definition Link base~~
and contained in Exhibit 101)
~~Herewith~~

Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on August ~~1, 2019.~~10, 2020.

	LINDBLAD EXPEDITIONS HOLDINGS, INC.
	(Registrant)

	By	/s/ Sven-Olof Lindblad
		Sven-Olof Lindblad
		~~Sven-Olof Lindblad~~Chief Executive Officer and President
		~~Chief Executive Officer and President~~

Title of each class	Trading ~~symbol(s)~~Symbol(s)	Name of each exchange on which registered

Common Stock, par value $0.0001 per share	LIND	The NASDAQ Stock ~~Exchange~~Market LLC

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

		Page(s)

PART I. FINANCIAL INFORMATION

ITEM 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of June 30, 2020 (Unaudited) and December 31, 2019	1
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2020 and 2019 (Unaudited)	2
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2020 and 2019 (Unaudited)	3
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2020 and 2019 (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2019 (Unaudited)	5
	Notes to the Condensed Consolidated Financial Statements (Unaudited)	7

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	34
ITEM 4.	Controls and Procedures	34

PART II. OTHER INFORMATION

ITEM 1.	~~Financial Statements (Unaudited)~~Legal Proceedings	1
	~~Condensed Consolidated Balance Sheets as of June 30, 2019 (Unaudited) and December 31, 2018~~	1
	~~Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2019 and 2018 (Unaudited)~~	2
	~~Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2019 and 2018 (Unaudited)~~	3
	~~Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2019 and 2018 (Unaudited)~~	4
	~~Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2019 and 2018 (Unaudited)~~	5
	~~Notes to the Condensed Consolidated Financial Statements (Unaudited)~~	6

~~ITEM 2.~~	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	17
~~ITEM 3.~~	~~Quantitative and Qualitative Disclosures about Market Risk~~	27
~~ITEM 4.~~	~~Controls and Procedures~~	27

~~PART II. OTHER INFORMATION~~

~~ITEM 1.~~	~~Legal Proceedings~~	2734
ITEM 1A.	Risk Factors	2734
ITEM 2.	Unregistered Sale of Equity Securities and Use of Proceeds	2835
ITEM 3.	Defaults Upon Senior Securities	2835
ITEM 4.	Mine Safety Disclosures	2835
ITEM 5.	Other Information	2835
ITEM 6.	Exhibits	2936

SIGNATURES		2937

PART 1.I.	FINANCIAL INFORMATION
Item 1.	FINANCIAL STATEMENTS	~~FINANCIAL STATEMENTS~~

	As of June 30, 2019			As of December 31, 2018			*As of June 30, 2020*			*As of December 31, 2019*
ASSETS	(unaudited)						(unaudited)
Current Assets:
Cash and cash equivalents	$	78,746		$	113,396		$	80,897		$	101,579
Restricted cash		33,305			8,755			21,333			7,679
Marine operating supplies		5,086			5,165			6,759			6,299
Inventories		1,715			1,604			1,824			2,027
Prepaid expenses and other current assets		31,297			21,263			23,753			29,055
Total current assets		150,149			150,183			134,566			146,639

Property and equipment, net		316,709			285,979			495,370			357,790
Goodwill		22,105			22,105			22,105			22,105
Intangibles, net		7,185			7,975			5,607			6,396
Deferred tax asset		1,319			-			639			218
Right-to-use lease assets		5,808			-			5,601			6,105
Other long-term assets		5,219			7,167			8,401			9,405
Total assets	$	508,494		$	473,409		$	672,289		$	548,658

LIABILITIES
Current Liabilities:
Unearned passenger revenues	$	145,089		$	123,489		$	120,788		$	138,825
Accounts payable and accrued expenses		31,200			33,944			43,443			38,231
Lease liabilities - current		947			-			1,394			1,335
Long-term debt - current		2,000			2,000			5,646			4,525
Total current liabilities		179,236			159,433			171,271			182,916

Long-term debt, less current portion		185,660			188,089			395,637			213,543
Deferred tax liabilities		-			2,787			136			4,491
Lease liabilities		5,046			-			4,567			5,029
Other long-term liabilities		1,259			554			6,730			3,317
Total liabilities		371,201			350,863			578,341			409,296

COMMITMENTS AND CONTINGENCIES

REDEEMABLE NONCONTROLLING INTEREST		6,771			6,502			9,970			16,112

STOCKHOLDERS’ EQUITY
Preferred stock, $0.0001 par value, 1,000,000 shares authorized; no shares issued and outstanding		-			-			-			-
Common stock, $0.0001 par value, 200,000,000 shares authorized; 45,801,025 and 45,814,925 issued, 45,662,953 and 45,442,728 outstanding as of June 30, 2019 and December 31, 2018, respectively		5			5
Common stock, $0.0001 par value, 200,000,000 shares authorized; 49,822,955 and 49,717,522 issued, 49,754,431 and 49,626,498 outstanding as of June 30, 2020 and December 31, 2019, respectively								5			5
Additional paid-in capital		41,617			41,539			47,394			46,271
Retained earnings		90,832			75,171			45,403			81,655
Accumulated other comprehensive income		(1,932	)		(671	)
Accumulated other comprehensive loss								(8,824	)		(4,681	)
Total stockholders' equity		130,522			116,044			83,978			123,250
Total liabilities, stockholders' equity and redeemable noncontrolling interest	$	508,494		$	473,409		$	672,289		$	548,658

	*For the three months ended June 30,*						*For the six months ended June 30,*
	*2020*			*2019*			*2020*			*2019*

Tour revenues	$	(268	)	$	76,658		$	80,971		$	166,311

Operating expenses:
Cost of tours		12,721			37,520			54,913			76,537
General and administrative		9,798			16,268			27,025			32,350
Selling and marketing		3,406			12,567			16,285			26,569
Depreciation and amortization		8,553			6,182			15,243			12,370
Total operating expenses		34,478			72,537			113,466			147,826

Operating (loss) income		(34,746	)		4,121			(32,495	)		18,485

Other (expense) income:
Interest expense, net		(4,179	)		(3,188	)		(7,234	)		(6,176	)
(Loss) gain on foreign currency		(3,879	)		501			(7,322	)		1,157
Other expense		(62	)		(30	)		(113	)		(49	)
Total other expense		(8,120	)		(2,717	)		(14,669	)		(5,068	)

(Loss) income before income taxes		(42,866	)		1,404			(47,164	)		13,417
Income tax (benefit) expense		(2,943	)		553			(4,770	)		(2,513	)

Net (loss) income		(39,923	)		851			(42,394	)		15,930
Net (loss) income attributable to noncontrolling interest		(265	)		(137	)		(801	)		269
Net (loss) income available to common stockholders	$	(39,658	)	$	988		$	(41,593	)	$	15,661

Weighted average shares outstanding
Basic		49,741,635			46,155,981			49,683,381			45,607,307
Diluted		49,741,635			49,485,004			49,683,381			48,281,002

Net (loss) income per share available to common stockholders
Basic	$	(0.80	)	$	0.02		$	(0.84	)	$	0.34
Diluted	$	(0.80	)	$	0.02		$	(0.84	)	$	0.32

	For the three months ended June 30,						For the six months ended June 30,
	2019			2018			2019			2018

Tour revenues	$	76,658		$	69,473		$	166,311		$	151,883

Operating expenses:
Cost of tours		37,520			33,810			76,537			69,681
General and administrative		16,268			15,879			32,350			30,929
Selling and marketing		12,567			10,583			26,569			22,656
Depreciation and amortization		6,182			4,994			12,370			10,038
Total operating expenses		72,537			65,266			147,826			133,304

Operating income		4,121			4,207			18,485			18,579

Other expense:
Interest expense, net		(3,188	)		(2,870	)		(6,176	)		(5,604	)
Gain (loss) on foreign currency		501			(1,141	)		1,157			(1,592	)
Other expense		(30	)		(128	)		(49	)		(120	)
Total other expense		(2,717	)		(4,139	)		(5,068	)		(7,316	)

Income before income taxes		1,404			68			13,417			11,263
Income tax expense (benefit)		553			227			(2,513	)		503

Net income (loss)		851			(159	)		15,930			10,760
Net (loss) income attributable to noncontrolling interest		(137	)		(293	)		269			(172	)

Net income available to common stockholders	$	988		$	134		$	15,661		$	10,932

Weighted average shares outstanding
Basic		46,155,981			45,894,155			45,607,307			45,322,541
Diluted		49,485,004			46,442,611			48,281,002			45,594,980

Net income per share available to common stockholders
Basic	$	0.02		$	-		$	0.34		$	0.24
Diluted	$	0.02		$	-		$	0.32		$	0.24

	Common Stock					Additional Paid-In			Retained		Accumulated Other Comprehensive			Total Stockholders'			*Common Stock*					*Additional Paid-In*			*Retained*			*Accumulated Other Comprehensive*			*Total Stockholders'*
	Shares			Amount		Capital			Earnings		Loss			Equity			*Shares*			*Amount*		*Capital*			*Earnings*			*Loss*			*Equity*
Balance as of January 1, 2019		45,814,925		$	5	$	41,539		$	75,171	$	(671	)	$	116,044
Balance as of March 31, 2020																		49,758,787		$	5	$	46,908		$	78,820		$	(18,080	)	$	107,653
Stock-based compensation																		-			-		703			-			-			703
Issuance of stock for equity compensation plans, net																		64,168			-		(217	)		-			-			(217	)
Repurchase of shares and warrants																		-			-		-			-			-			-
Other comprehensive income, net																		-			-		-			-			9,256			9,256
Redeemable noncontrolling interest																		-			-		-			6,241			-			6,241
Net loss available to common stockholders																		-			-		-			(39,658	)		-			(39,658	)
Balance as of June 30, 2020																		49,822,955		$	5	$	47,394		$	45,403		$	(8,824	)	$	83,978

																	*Common Stock*					*Additional Paid-In*			*Retained*			*Accumulated Other Comprehensive*			*Total Stockholders'*
																	*Shares*			*Amount*		*Capital*			*Earnings*			*Loss*			*Equity*
Balance as of January 1, 2020																		49,717,522		$	5	$	46,271		$	81,655		$	(4,681	)	$	123,250
Stock-based compensation		-			-		753			-		-			753			-			-		1,601			-			-			1,601
Issuance of stock for equity compensation plans, net		(44,315	)		-		(1,167	)		-		-			(1,167	)		113,950			-		(351	)		-			-			(351	)
Repurchase of shares and warrants		(1,895	)		-		(23	)		-		-			(23	)		(8,517	)		-		(127	)		-			-			(127	)
Other comprehensive loss, net		-			-		-			-		(1,638	)		(1,638	)		-			-		-			-			(4,143	)		(4,143	)
Net income available to common stockholders		-			-		-			14,673		-			14,673
Balance as of March 31, 2019		45,768,715		$	5	$	41,102		$	89,844	$	(2,309	)	$	128,642
Stock-based compensation		-			-		1,001			-		-			1,001
Issuance of stock for equity compensation plans, net		32,310			-		(486	)		-		-			(486	)
Other comprehensive income, net		-			-		-			-		377			377
Net income available to common stockholders		-			-		-			988		-			988
Balance as of June 30, 2019		45,801,025		$	5	$	41,617		$	90,832	$	(1,932	)	$	130,522
Redeemable noncontrolling interest																		-			-		-			5,341			-			5,341
Net loss available to common stockholders																		-			-		-			(41,593	)		-			(41,593	)
Balance as of June 30, 2020																		49,822,955		$	5	$	47,394		$	45,403		$	(8,824	)	$	83,978

	●	Significantly reduced ship and land-based expedition costs including crew payroll, land costs, fuel and food. All ships have been safely laid up.

	●	Lowered expected annual maintenance capital expenditures by over $10 million, savings of more than 50% from originally planned levels.

	●	Meaningfully reduced general and administrative expenses through staff furloughs, payroll reductions and the elimination of all non-essential travel, office expenses and discretionary spending.

	●	Suspended the majority of planned advertising and marketing spend.

	●	Deferred payment of the majority of bonuses earned for 2019 performance, as well as cash compensation for the Board of Directors.

	●	Suspended all repurchases of common stock under the stock repurchase plan.

(In thousands)	Operating Lease Payments
	(unaudited)
2019 (six months)	$	581
2020		1,190
2021		1,222
2022		1,283
2023		1,165
Thereafter		1,603
Present value discount (6% weighted average)		(1,051	)
Total lease liability	$	5,993

	Contract Liabilities
(In thousands)	(unaudited)
Balance as of January 1, 2019	$	70,903
Recognized in tour revenues during the period		(70,903	)
Additional contract liabilities in period		82,416
Balance as of June 30, 2019	$	82,416

	*Contract Liabilities*
(In thousands)	(unaudited)
Balance as of January 1, 2020	$	72,051
Recognized in tour revenues during the period		(68,182	)
Additional contract liabilities in period		66,706
Balance as of June 30, 2020	$	70,575

	As of June 30, 2019				As of December 31, 2018
	(unaudited)
(in thousands)	Fair Value, Asset Derivatives		Fair Value, Liability Derivatives		Fair Value, Asset Derivatives		Fair Value, Asset Derivatives
Derivatives designated as hedging instruments
Foreign exchange forward ^(a)	$	-	$	1,536	$	-	$	-
Interest rate cap ^(b)		420		-		710		-
Total	$	420	$	1,536	$	710	$	-
Derivatives not designated as hedging instruments
Foreign exchange forward ^(c)	$	-	$	171	$	-	$	1,328
Total	$	-	$	171	$	-	$	1,328